Pilot Program Supporting Village-Level Collective Economic Development to Expand to 13 Provinces
The Ministry of Finance issued the "Guiding Opinions on Supporting the Pilot Program for Village-Level Collective Economic Development" (hereinafter referred to as the "Guiding Opinions"), confirming that in 2016 the central government finance will select 13 provinces to carry out the pilot program for supporting village-level collective economic development, and clarifying pilot content including exploring realization forms centered on the effective use of resources and exploring realization forms centered on the provision of services.
It is reported that the 13 pilot provinces are, on the basis of the original two pilot provinces of Zhejiang and Ningxia, newly adding 11 provinces: Hebei, Liaoning, Jiangsu, Anhui, Jiangxi, Shandong, Henan, Guangdong, Guangxi, Guizhou and Yunnan.
"The 'Guiding Opinions' have expanded the scope of the pilot program for supporting village-level collective economic development and put forward a series of reform measures, which will help strengthen the strength of village-level collective economies, activate production factors and promote the growth of farmers' incomes," said Bai Jingming, deputy director of the Research Institute for Fiscal Science of the Ministry of Finance.
The "Guiding Opinions" clarified the main content of the pilot program for supporting village-level collective economic development. In terms of exploring realization forms centered on the effective use of resources, the "Guiding Opinions" proposed supporting village collectives in establishing land share cooperatives, and, in accordance with the principles of voluntary participation, freedom to withdraw, shared benefits and shared risks, encouraging and guiding members of village collectives to join the cooperatives with their land contractual management rights converted into shares.
Land share cooperatives are a new type of cooperative operation model, in which farmers join the cooperative with their rural land contractual management rights as shares, turning land contractual management rights into equity; the land contributed to the cooperative is cultivated uniformly by the cooperative, and besides labor income, farmers can also enjoy dividends. "Developing land share cooperatives is conducive to appropriately scaled agricultural operations, raising labor productivity and land output rates, and promoting agricultural efficiency and farmers' income growth," said Bai Jingming.
In terms of exploring realization forms centered on the provision of services, the "Guiding Opinions" proposed supporting village collectives in establishing service entities such as agricultural production and operation cooperatives and labor service cooperatives, to provide paid services including processing, circulation, warehousing and labor services to various market entities, especially grain production and operation entities, promoting the extension of agriculture from the production stage to the pre-production and post-production stages, and achieving integrated development of the primary, secondary and tertiary industries at a higher level and over a larger scope.
"Supporting village collectives in establishing service entities enables village collectives to have the capacity for public services, and can promote the formation of a new type of agricultural social service system while developing and strengthening village-level collective economies," said Bai Jingming.
In terms of exploring realization forms centered on property management, the "Guiding Opinions" proposed encouraging village collectives, in accordance with the requirements of overall land use planning and urban-rural construction planning, to develop and utilize land such as collective operational construction land, build property projects within their means, and develop the property economy.
Bai Jingming believes that with the development of the rural collective economy and the improvement of the degree of rural industrialization, village collectives possess a certain amount of real estate and public facilities such as office buildings, schools, warehouses and auditoriums, and carrying out leasing operations or even building new properties is conducive to promoting the development of village-level collective economies.
In terms of exploring realization forms centered on mixed operations, the "Guiding Opinions" proposed encouraging village collectives to take equity stakes with collective assets and resources in farmers' professional cooperatives and prudently operated industrial and commercial enterprises. Villages with the conditions may explore the establishment of funds to support village-level collective economic development, so as to preserve and increase the value of collective assets.
It is worth noting that the "Guiding Opinions" clarified that the central government finance will support local pilot work through reward-in-place-of-subsidy methods, that provincial-level finance departments should increase support, and that cities and counties should also provide necessary support. Pilot funds are mainly used to subsidize the encouragement of land circulation, consolidation of scattered land, development of agricultural services and property operations, and must not be used for project matching funds, repayment of rural debts, construction of office buildings and reception facilities, purchase of transportation and communication tools, or issuance of personal subsidies.