2. We will consolidate and strengthen all fiscal and taxation policies designed to support and help agriculture, rural areas and farmers.

We are continuing to make support for agriculture, rural areas and farmers the focus of our budgetary arrangements and fiscal work. Particular attention will be given to strengthening agriculture as the foundation of the economy, promoting its development, increasing rural incomes and making real progress in developing a new socialist countryside. Expenditures in the central budget for agriculture, rural areas and farmers total 562.5 billion yuan, an increase of 130.7 billion yuan or 30.3 percent.

We will increase subsidies for farmers. Expenditures in the central budget for subsidies to farmers total 133.59 billion yuan, an increase of 25.3 billion yuan or 23.4 percent. Included in this figure is 15.1 billion yuan in direct subsidies to grain producers, 48.2 billion yuan in general direct subsidies for agricultural supplies, 4 billion yuan in subsidies for the purchase of agricultural equipment and machinery, 7.07 billion yuan in subsidies for superior seed varieties, and 1.6 billion yuan in subsidies for training farmers.

We will strongly support the development of agricultural production. Expenditures in the central budget for the support of agricultural production total 304.45 billion yuan (including most of the expenditures for agriculture, forestry and water conservancy, expenditures for farmland reforestation projects that are listed in the environmental protection section of the budget, and subsidies for reform of rural taxes and fees that are listed in the section of the budget dealing with fiscal transfer payments from the central to local governments), an increase of 44.19 billion yuan or 17 percent. This figure includes: 102.28 billion yuan to develop rural infrastructure; 8.4 billion yuan to finance the building of small farm water conservancy facilities and repair small reservoirs in poor condition; 12.72 billion yuan to finance overall agricultural development, which will focus on supporting efforts to improve low- and medium-yield farmland in major grain-producing regions and reduce water use in medium-sized irrigated areas in order to enhance overall agricultural production capacity; 16.5 billion yuan to stabilize and improve the reward policies for major grain-producing counties; 13.5 billion yuan to improve the follow-up policies on farmland reforestation, continue paying subsidies to farmers displaced by farmland reforestation and strengthen the development of basic subsistence farmland for them; 6.05 billion yuan to improve the system of subsidies for agricultural insurance premiums; and 16.73 billion yuan to increase funding to alleviate poverty through development and make innovations in poverty relief mechanisms. We will increase support for wider application of advanced and appropriate agricultural technologies. In addition, we will improve fiscal and taxation policies and measures to stimulate greater production of pork, dairy products and oilseeds. We will set a floor price for the purchase of grain and appropriately increase the floor price for the purchase of grain and wheat when needed.

We will accelerate development of rural social programs. The central government has allocated 124.52 billion yuan for this purpose, an increase of 61.14 billion yuan or 96.5 percent. This sum is made up of: 107.32 billion yuan to support rural education, culture and public health; 9 billion yuan to fully set up and optimize a system of cost of living allowances for rural residents; and 6.2 billion yuan to help people affected by natural disasters to restore their lives.

We will increase investment in agriculture, rural areas and farmers through a variety of channels. Compensation paid to the central and local governments for the conversion of farmland to development purposes will continue to be used for developing and protecting basic farmland, improving land and developing arable land in accordance with regulations. Local government budgets will also increase allocations to aid agriculture, rural areas and farmers. In particular, income from land transfers will be used primarily for building a new countryside, ensuring that farmers are fully compensated for expropriated land and the costs of their relocation, and subsidizing social safety net payments to farmers whose land has been expropriated. The proportion of income from land transfers that gets spent on farmland development and rural infrastructure projects will be gradually increased. We will vigorously support the establishment of a sound system of rural financial services. We will substitute rewards for subsidies and introduce other measures to encourage not only farmers but all sectors of society to increase investment.