Liu Shinan

Helping farmers raise income level

By Liu Shinan (China Daily)
Updated: 2006-01-04 06:11

New Year's Day this year witnessed two significant events in China: From that day on, the World Food Programme no longer provides food aid to China, marking the end of 26 years of China receiving aid from the United Nations food organization. Also on that day, China abolished the 2,600-year-old agricultural tax.

The first event suggests that China is now able to produce enough food to feed all its citizens without external help. Given the fact that China uses 10 per cent of the global cultivated land to provide for 20 per cent of the world's population, this is a great achievement.

The second event means that China no longer relies on farming for its government revenue. The income from farming now all goes to farmers.

Both events indicate the enhancement of China's national strength. No matter how many complaints we may have about the present problems with our country, we should be satisfied with this achievement.

Traditionally China has been a nation of agriculture. In its history of thousands of years, nearly every step China made in its progress was related with the change of fate of farmers. In modern history, the revolution that led to the founding of the People's Republic of China started in rural areas in the first half of the 20th century; the reform that resulted in the prosperity of China's economy in the past 26 years also started in the rural areas.

Chinese farmers have contributed greatly to the nation's modernization drive not only in the production of food but also in the nation's urbanization and industrialization in the past few decades. Some analysts estimated that the government has levied a total of 600-800 billion yuan (US$75-100 billion) from farmers to help build up the country's urban industry. However, farmers have not been adequately remunerated for such a contribution. In fact, the State is in debt to them.

Now the government has made a number of major decisions to increase investment in agriculture, raise farmers' income and improve infrastructure in rural areas. The annulment of agricultural tax was the latest move in this direction. It will reduce a total of 100 billion yuan (US$12.5 billion) in financial burden for China's 768 million rural residents.

However, this is far from enough to help farmers increase their income, for agriculture tax only accounts for a small part of what they have to pay for maintaining a moderately well-to-do lifestyle.

A relative of mine is a farmer in a rural county in Central China. He said to me: "Frankly speaking, agricultural tax is not too heavy a burden for us, compared with the main costs."

Among the "main costs," he cited the prices of seeds, pesticides, fertilizer and other means of production, which, he said, had soared 10-plus times or even dozens of times those in the early 1980s when China launched the reform in rural areas.

Other costs he listed included education of children and fees for medical treatment. "They are much, much higher than the time when you were here," he said. I worked and lived there as a country teacher for 10 years during the 1970s.

The prices of farm products in China's cities are also a great deal higher than at that time. Farmers, however, have not benefited much from the rising profits from their products intermediate merchants garner the largest share of the profits.

Straightening out the circulation of means of production and farm products to reduce the intermediate links will probably prove to be more effective than abolishing agricultural tax in reducing farmers' burden and increasing their income.

The government is yet to do more in this regard.

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(China Daily 01/04/2006 page4)