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Li Jiange and Han Jun

Research Report No 179, 2003

II. Policy Suggestions in Solving the Problems Facing China’s Agriculture, Rural Areas and Farmers at the New Stage

The central government’s policy is more and more explicit in solving problems facing agriculture, rural areas and farmers. In 1998, the central government made a scientific judgment and pointed out that agriculture and rural development had entered a new stage. In 1999, the central government proposed that the main task of agriculture and rural development at the new stage was to push forward on the strategic adjustment of agricultural and rural economic structure. In 2000, the central government pointed out that the kernel objective of the agricultural structure adjustment was to increase farmers’ income. In 2002, the central government proposed that comprehensive measures should be taken to increase farmers’ income and the policy of "giving more, taking less and invigorating rural economy be adhered to." In 2003, the central government proposed to put the problems facing agriculture, rural areas and farmers on the "top of the agenda of the Party’s work". This was the solemn pledge from the new central leadership on the problems facing agriculture, rural areas and farmers. The work report of the 16th CPC National Congress clearly pointed out that "the urban and rural economy and social development should be under overall coordination", thus clarifying the guiding ideology on solving the problems facing agriculture, rural areas and farmers. The Third Plenary Session of the 16th CPC Central Committee further put forward the new development outlook as required by the new stage, i.e. giving overall consideration to urban and rural development, to regional development, to economic and social development, to harmonious development of man and nature, as well as to the domestic development and opening up to the outside world. It has pointed out the direction and path for solving the problems facing agriculture, rural areas and farmers at the new stage.

1. Ensuring the state’s grain security, pushing forward on the strategic adjustment of agricultural structure and raising the comprehensive agricultural efficiency and competitiveness

Since 2000, the production of grain has failed to meet the demand in four consecutive years. The total grain output this year might fall to 860 billion to 870 billion jin. Against this backdrop, the grain security has become an issue of concern. We should be aware that if the grain output continues to decrease and the gap between its output and demand continues to be widened, the grain would tend to be in shorter supply. In the medium and long run, the grain demand of the country would see a rigid growth, and the grain shortage would tend to be serious with the increase of population, decrease of farmland, quickening urbanization and improvement of people’s living standard. Grain is the commodity of vital importance to the country’s planning and people’s lives. It will be a long-term strategic task to guarantee the grain security. In general, China should be self-sufficient. But it is not advisable to rely totally on its own production or imports. Therefore, the grain policy in the next few years will be to boost the reasonable growth of grain output instead of controlling the grain output in the past few years in order to maintain the basic balance between supply and demand. Protecting and raising the grain production capacity should be regarded as the basis for ensuring the country’s grain security. The farmland, especially basic farmland being occupied by construction projects, must be strictly controlled. The advanced water-saving technology should be vigorously developed and promoted in the rural areas. At the same time, China’s water resource utilization efficiency should be improved. The scientific and technological support system for grain output growth should be bolstered. The state’s support to and protection of grain production should be mainly reflected in the support to and protection of the main grain production areas. The state’s investment in agriculture should favor these areas. Further study should be done to open more fund sources for them.

To push on the strategic adjustment of agricultural structure, we must make research on the question of how to expand the demand for agricultural products – which mainly lies in the following two aspects. First, quickening the development of agricultural product processing industry. Without the expansion of intermediate demand or the propelling of agricultural product processing industry, it will be very difficult to adjust the agricultural structure; Second, expanding exports of agricultural products, which is playing a more and more important role in carrying forward the adjustment of agricultural structure and improving farmers’ income. The biggest problem that China’s farming is facing is the technical barrier. We should hasten the pace to solve the problems existing with the exports of agricultural products – low quality, low degree of processing and lack of policy support and services. To boost the export competitiveness, we should actively deal with the complicated international agricultural product trade environment and strive to upgrade the exports to a higher level.

2. Hastening the transfer of surplus rural labor and the process of urbanization for rural population

The key to increasing farmers’ income lies in solving their employment problem. We should continue to develop the secondary and tertiary industries in the rural areas while highlighting the development of agricultural product processing, developing labor-intensive industries and service trade. Farmers in the past were like a chess piece on the chessboard and had no flexibility to flow. The reform is to enliven farmers and enable them to flow freely. The restrictive employment policies over rural workers should be abolished so that they would be treated equally. The governments at various levels should abolish the administrative examination and approval over the use of rural workers by enterprises, simplify the procedure for farmers to work outside, abolish the unreasonable certificates on rural workers and clear the unreasonable charges on them. A vocational education and training system should be stepped up to cover both urban and rural areas. Now China has a floating population of about 140 million. Some of them have lived in the cities for many years, but cannot be integrated with the urban lives. The management system over floating population should be improved, and bolder reform should be done over the household registration system. The urban development plan and public service plans should effectively serve the whole society. And, the management fund for floating population should be included in the financial budget. The conditions for farmers to settle down in large and medium-sized cities should further be relaxed. They should be allowed to have their household registered in terms of their profession or their residence. After the rural residents are employed and settled down in the cities and towns, they should enjoy the same treatment with urban residents in housing, army recruitment, children’s enrolment by kindergarten and school while fulfilling subsequent obligations. Before being included in the urban social security system, rural residents who are employed and settled down in the cities should continue to enjoy the right to farmland contracting and enjoy the distribution from the original collective assets while keeping the right to use the house sites. The goal of the household registration system is to allow farmers to take up residence in the cities of their own will so that the household registration would only bear the significance to indicate the place of residence, and that the urban and rural residents would enjoy equal rights under the condition that the household registration would lose its special welfare significance. This would be beneficial to solving the problems arising from urban and rural resident identification, employment and unequal treatment and to the coordinated development of urban and rural economy.

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