Resolving the issues relating to agriculture, rural areas and farmers remains the top priority

 

    Change one: the central authorities first sounded a warning bell about signs of laxity in the work on “agriculture, rural areas and farmers” that had appeared in some places, and sternly emphasized the strategic importance of this work. The Central Economic Work Conference listed the work on “agriculture, rural areas and farmers” as the second of the eight major tasks of economic work in 2007, and put forward the “three no's” guiding principle: the strategic thinking of persisting in resolving the issues relating to agriculture, rural areas and farmers as the top priority of the whole Party's work must not be shaken in the slightest; the various tasks of promoting the steady development of agriculture and the sustained increase of farmers' incomes must not be relaxed in the slightest; and the intensity of work in solidly advancing the building of a new socialist countryside must not be weakened in the slightest. The Central Rural Work Conference expanded the “three no's” principle into “four no's,” with the additional “no” specifically added being: the intensity of policies supporting agriculture and benefiting farmers must not be weakened in the slightest.

 

    Change two: the central authorities explicitly proposed that developing modern agriculture is the primary task of building a new socialist countryside. The Central Economic Work Conference proposed that developing modern agriculture should be taken as the focal point for advancing the building of a new socialist countryside. The Central Rural Work Conference, held slightly later, elevated this “focal point” to the height of “primary task,” clearly showing the central authorities' growing “favor” toward modern agriculture.

 

    Change three: the central authorities explicitly proposed that policies supporting agriculture and benefiting farmers should not only be consolidated and improved, but also further strengthened. At present, agriculture and rural areas have seen a good situation long hoped for and rarely achieved, but they also face many prominent contradictions and problems, and agricultural and rural development is still at a difficult stage of climbing uphill. The better the situation, the more necessary it is to keep a clear head and the more necessary it is to strengthen one's awareness of potential dangers and sense of crisis. Therefore, only by continuing to adhere to the principle of industry nurturing agriculture, cities supporting rural areas, and taking more and giving less while loosening restrictions, consolidating, improving and strengthening policies supporting agriculture and benefiting farmers, effectively increasing investment in agriculture, actively advancing the building of modern agriculture, strengthening rural public services, and deepening comprehensive rural reform, can the rural economy be developed in a sound and rapid way and the building of a new socialist countryside be guided forward healthily.

 

    The spirit of the central authorities regarding effectively increasing investment in agriculture was quickly reflected in fiscal policy: in 2007, most of China's newly added government investment would be used for building a new socialist countryside, ensuring that both the total scale and proportion of investment used for building a new socialist countryside exceed those of 2006. According to the National Fiscal Work Conference, in 2007 the policy of mainly using additional expenditures on education, health and culture for rural areas would continue to be earnestly implemented; revenue from land transfers must ensure full payment of compensation for land requisition and relocation; and the proportion used for agricultural land development and rural infrastructure construction must be gradually increased. Finance Minister Jin Renqing said that in 2007 the sunshine of public finance would further shine on the vast rural areas. Uyunqimg, Vice Chairwoman of the Standing Committee of the National People's Congress, also recently suggested that it is necessary to “study and establish a scientific, standardized, reasonably structured and clearly targeted agricultural investment mechanism to ensure the steady growth of fiscal funds supporting agriculture.” If fiscal spending is one leg of agricultural investment, then finance is the other leg. How should the financial sector adapt to the central authorities' new spirit and new changes regarding agricultural and rural work?

 

    First, rural finance must unswervingly adhere to the principle of serving “agriculture, rural areas and farmers,” and continue to increase credit support for agriculture under the premise of commercial sustainability. With the steady development of agriculture and rural areas, and with the gradual expansion of state fiscal investment in rural areas, rural productivity and consumption capacity will inevitably grow stronger day by day, and therefore rural demand for financial services and rural financial consumption capacity will inevitably rise day by day; rural finance will welcome an ever broader space, and finance in rural areas will not be without achievements, but will have great achievements. Second, the principle of appropriate competition must be adhered to, and financial institutions with diversified forms of ownership must be introduced into the field of rural financial services. With the China Banking Regulatory Commission's “Several Opinions on Adjusting and Relaxing Access Policies for Banking Financial Institutions in Rural Areas to Better Support the Building of a New Socialist Countryside” issued just before the end of the year, the coverage rate of rural financial services can be expected to rise effectively. Third, the principle of overall layout must be adhered to; this year, when considering the reform of rural credit cooperatives, the reform of postal savings, and the reform positioning of the Agricultural Bank of China and the Agricultural Development Bank of China, all should be considered comprehensively in accordance with the purpose of serving agriculture and rural areas. Fourth, gradually establishing an agricultural policy-based insurance system is an important measure for resolving the issues relating to agriculture, rural areas and farmers; agricultural policy-based insurance should be taken as a major new policy supporting agriculture this year, and insurance premium subsidies should be included in the central and local fiscal budgets. Fifth, it is necessary to study how to support the development of modern agriculture. According to the spirit of the Central Rural Work Conference, the six overall approaches to developing modern agriculture are “equipping agriculture with modern material conditions, transforming agriculture with modern science and technology, upgrading agriculture with a modern industrial system, advancing agriculture with modern forms of operation, guiding agriculture with modern development concepts, and developing agriculture by cultivating new-type farmers.” These six aspects should be the “main direction” of financial services this year.