China’s rural economy is still inflicted by many deep-rooted systematic problems that have to be solved through deep reform, said one head of the State Development and Reform Commission at the recent national work conference of the commission in Nanchang, capital city of Jiangxi Province. The commission also outlined four priorities for the systematic reform of the country’s rural economy.

Deepen the structural reform of food circulation. According to the guideline of “opening-up the purchasing market, giving subsidies directly to grain producers, restructuring enterprise mechanism and enforcing macro control,” local development and reform departments should complete their reform plans and supplemental measures to be taken. They should sum up past experiences and explore the most efficient way to offer direct subsidies to grain producers, so as to make sure that the farmers can have their share of the nation’s achievements gained from the reform scheme.

Deepen the reform of rural tax- and fee-collection system. The central government decides to eliminate special agricultural product tax beginning from 2004 and to call off agricultural tax nationwide in five years step by step. Recently, the central government took a bold step to exempt agricultural tax in Heilongjiang and Jilin provinces, two of China’s major grain producing bases. The other 11 food-producing provinces will enjoy a taxation reduction of 3 percent this year. To reinforce the progress of rural tax- and fee-collection reform, county- and township-level governments must be streamlined so as to reduce the number of civil servants supported by local finance. Meanwhile, the mechanism of rural compulsory education must be reinforced and improved on the basis of county-level administration. 

Deepen the reform of land requisition mechanism. A strict line must be drawn between lands for public benefit and that for commercial operation purposes while defining the governments’ authority to land requisition and locations allowed for requisition. For land used for public benefit, standard procedures for land expropriation must be applied and compensation standard should be reasonably raised. While requisitioning lands for commercial operation, market mechanism must be applied and the farmers affected must be resettled properly and provided with social securities.

Reform and renovate rural financial system. It is stressed that nationwide reform of rural credit cooperatives should be carried out on the basis of pilot projects while post office’s savings system being improved so as to adjust the functions of agricultural banking and foster an agricultural insurance system with policy-orientated support.

(China.org.cn by Xu Zhiquan, April 25, 2004)