The country has given much attention to issues concerning agriculture, rural areas and farmers since the 16th National Congress of the Communist Party of China (CPC) held five years ago. And the four No 1 documents issued by the CPC Central Committee consecutively offered strategies to solve related problems. A new situation in rural work and agriculture has been created.

The reform on rural tax and administrative fees was carried out to reduce the burden on farmers. When the agricultural tax was abolished last year, a total of 125 billion yuan (US$16.6 billion) was cut annually, with more 140 yuan per capita.

The reform of the grain circulation system has promoted stable development in production and protected the interests of farmers. In April, 2004, the State Council decided to fully open the grain purchasing market and adopted a direct subsidy policy. From 2004 to 2006 the total direct subsidy to farmers was 39 billion yuan. All these moves have protected the interests of farmers and enhanced production capabilities. The country's grain production has increased for three consecutive years since 2004.

Positive changes have taken place in the policies on the transfer of rural labor. The inappropriate restrictions on rural laborers working in cities were abolished. An equal employment system was established. This has vigorously promoted the transfer and flow of rural labor among different regions. As of last year, there were about 120 million farmer-turned migrant workers in the country.

The increasing financial support toward agriculture has brought vital advancement in rural infrastructure and social causes. During the 10th Five-Year Plan period (2001-05), the financial support to rural areas increased by 15 percent annually. The central government has made it clear that the country's input to infrastructure construction will focus in rural areas. Free compulsory education was provided in rural areas in western regions last year and will be implemented in all rural areas around the country this year. A new rural cooperative medical system is being promoted, covering 80 percent of the country's rural areas so far. It will cover all rural areas next year.

But it should be seen clearly that the agricultural foundation is still weak and the increase of farmers' incomes is still unstable. The income gap between rural and urban residents is widening. Various policies favoring agriculture and farmers are not institutionalized yet. A long-term mechanism for the industry to nurture agriculture has still not been introduced. New challenges have emerged.

First, agricultural development has now entered the stage of a tight balance between supply and demand. We have to rely on the international market to meet demand for some important farm produce.

Second, the development of agriculture and rural areas is still facing restrictions caused by deep-seated institutional problems. Farmers' land property rights are not well protected. There are abuses of the land requisition rights. The compensation is too low, which harms the interests of farmers. The reform of the rural financial system cannot meet the rising demand for financial services in rural areas.

Third, the urban-rural income gap is widening. There is a huge disparity in the public services enjoyed by urban residents and their rural counterparts.

Fourth, the resource restrictions on agricultural development are getting tight. The shortage of land and water resources is serious. Drought and the lack of water are hindering agricultural development in many regions. The construction of irrigation facilities is lagging behind. The quantity and quality of arable land are both decreasing. Support for the development of agricultural technologies is not sufficient.

To promote the construction of a new socialist countryside, the guiding principle of industry nurturing agriculture and cities supporting the countryside should be insisted upon. We should "take less" and "give more" to gradually build a unified urban-rural social economic development system and mechanism.

First, efforts should be made to realize the balance between grain supply and demand and reduce dependence on the international market.

Minimum purchasing prices and various subsidy policies should be introduced. The macro-control on grain export and import should be enhanced. Domestic bio-fuel production should be controlled. In the long run, it is the fundamental way to improve comprehensive productivity. Government input should be increased in the cultivation and popularization of improved varieties, construction of irrigation systems, spreading of agricultural technologies and promotion of agricultural mechanization. Policy support to the production of animal products should be reinforced.

Second, efforts should be made to promote common prosperity of cities and the countryside.

China is still in the stage of rapid development which is producing a great demand for rural labor. From a long-term point of view, to reduce the number of farmers and the employment rate in agriculture as well as improve agricultural productivity is vital to narrow the urban-rural income gap. The rights and interests of farmer-turned migrant workers should be better protected to encourage the rational flow of rural laborers to cities. Township enterprises should be developed to expand non-agricultural employment for surplus rural laborers.

Third, efforts should be made to respect farmers' democratic rights.

Farmers' economic interests and democratic rights should both be guaranteed to promote the construction of a socialist new countryside. Political construction in the rural areas should be improved to let farmers be the masters to build and manage the rural areas. The farmers' democratic rights to vote, to know, to participate and to supervise should be further guaranteed. The township governments' social management and public service functions should be enhanced.

Fourth, efforts should be made to arouse farmers' initiatives in building the new countryside.

The author is director of the Research Department of Rural Economy of the State Council Development Research Center

(China Daily October 19, 2007)