China aims for more rural reforms, farm subsidies
By Sara Wyant
© Copyright Agri-Pulse Communications, Inc.
BEIJING, Jan. 19, 2014 - For the eleventh consecutive year, the Chinese government's major policy document focuses on how to improve the rural economy and food security for the nation's 1.35 billion citizens, in an attempt to continue rural reforms and develop more modern agricultural practices.
To incentivize production, the central government is signaling a move away from stockpiling some commodities and adoption of a target price system - similar to one likely to be adopted in the U.S. farm bill - to support farmers.
The “No. 1 central document,” unveiled Sunday, comes from the Central Committee of the Communist Party of China and the State Council, the Cabinet, according to reports by the Xinhua news agency. The document aims to continue reforms outlined in last year's document, which focused on "speeding up the modernization of agriculture and further strengthening the vitality of rural growth."
"Rural reform and development are confronted with a more complicated environment and an increasing number of difficulties and challenges, as the country is going through a period of transformation," according to the document.
The document listed eight aspects and 33 points for detailed government work on reforms related to the "three rural issues"-- agriculture, rural areas and farmers, according to Xinhua.
China will improve the tools needed for safeguarding food security, seek sustainable agricultural growth while balancing rural and urban development, deepening rural land reforms and promoting financial support for rural areas, the document said. It also says China should preserve its 120 million hectares of farmland, known as the “red line.”
"Taking good control of its own bowl is a fundamental principle the government must stick to over a long period of time," according to the document.
The country will intensify policy supports and protection of agriculture by promoting steady increases in agricultural expenditures, improving subsidizing policies for agriculture and setting up an interest compensation mechanism, Xinhua reported.
It will also promote technological innovation in the agricultural sector, develop a modern seed industry and promote the mechanization of agriculture, the document said.
In addition, the document underscores the importance of environmental protection and resolving environmental constraints such as water shortages while noting plans to provide more financial services and improve rural governance, according to Xinhua.
Since the 1970s, China has increased the role of market forces in its economy and lowered import barriers, but still intervenes in agriculture to meet policy objectives, according to USDA's Economic Research Service.
The document said China would continue to pursue "basic grain self-sufficiency" while increasing the use of overseas markets and allowing an "appropriate" amount of imports, but it stressed it "would not relax domestic food production at any time".
China has to work to improve conditions in the countryside in order to stop an exodus of rural workers into the cities, Agriculture Minister Han Changfu told Xinhua last year. China's urban population crossed over the 50 percent mark in 2011 for the first time in history and now stands at 53 percent.
"Chinese farmers want to move to the cities, but it is not possible for them all to do so, and it is even less possible for them all to move into the big cities, so we must plan urbanization and rural construction accordingly and build homes that allow rural people to live a happy life," Changfu told Xinhua.
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