No 1 Document for 2009

Several Opinions of the Central Committee of the Communist Party of China and the State Council on Promoting Stable Development of Agriculture and Sustained Income Growth of Farmers

 Issued on December 31, 2008

In consideration of the overall arrangement of the socialist undertaking with Chinese characteristics and the strategy of constructing better-off society all around, the 3^rd Plenary Session of the 17^th Congress of the Chinese Communist Party presented the blueprint for the construction of better rural China and formulated the action plan for promoting rural reform and development. Localities and departments are urged to seriously study and deeply comprehend the spirit of the Plenary Session, firmly carry forward the socialist new countryside, unswervingly follow agricultural modernization with Chinese features, steadfastly accelerate the formation of the new pattern of integrated urban and rural economic and social development and truly implement the fundamental policies tabled in the Decision of the Central Committee of the Chinese Communist Party and the State Council on Several Important Issues of Promoting Rural Reform and Development.

In 2008, localities and departments seriously implemented the decisions and plans of the Central Committee and won the fight against severe natural disasters and overcame multiple difficulties and risks, as a result, agriculture and rural areas continued to maintain a good development pattern. Bumper harvests were once again registered in agricultural production, total grain production reached a new high, farmers' income increased rapidly, rural public service sector development accelerated and the relations between the Party and the masses and between the cadres and the masses in rural areas continued to improve. The good situation in agriculture and rural areas laid a solid foundation for the Party and the State to successfully accomplish important events and appropriately cope with difficulties, and made great contribution to maintaining steady and fast economic development as well as social harmony and stability.

At present, the international financial crisis continues to spread and the growth of the world economy slowed down significantly, while its negative impact on Chinese economy is increasingly deepening and its effect on agricultural and rural development continues to emerge. The year of 2009 might be the most difficult year for the economic development of the country since the arrival of the new century; it is also a year during which it will be extremely arduous to consolidate and develop the good situation of agriculture and rural areas. On the high platform of 5 consecutive years of production increase, the task of maintaining steady grain production development is heavier; under the situation where prices of resource products at domestic and international markets are universally decreasing, the difficulties to maintain the prices of agricultural products at a reasonable level have become more difficult; in the atmosphere that the entire society attaches great attention to food quality and safety, the requirements of maintaining further improvement of agricultural product quality and avoiding risks in production and circulation are more imperative; under the severe situation of employment of migrant farmers, the limitation of maintaining rather fast growth of farmers’ income is more important. We must truly increase awareness about crises, full estimate difficulties and firmly seize opportunities, decisively adopt measures to resolutely prevent a decline of grain production, stagnation of farmers’ income and to ensure steady agricultural development and rural social stability.

It bears unique significance to do a good job in agriculture and rural work in 2009. Rural areas have the great potential in expanding domestic demand; agriculture is the fundamental pillar for the realization of steady and fast economic development; and farmers are the priority for improving people’s livelihood. The overall requirement for agriculture and rural areas in 2009 will focus on maintaining steady and fast development of agricultural and rural economy as the paramount task while implementing the spirit of the 17^th Party Congress, the 3^rd Plenary Session of the 17^th Party Congress and the Conference of Economic Works of the Central Committee, upholding the great banner of socialism with Chinese characteristics, with Deng Xiaoping’s thoughts and the important thoughts of the “three represents” as guidance, and taking a scientific and development outlook. With stabilizing grain production, increasing income, reinforcing the foundation and stressing people’s livelihood, we will further strengthen farmer-benefiting policies, enhance the support of science and technology, intensify inputs, optimize industrial structure and promote reform and innovation. All efforts will be made to ensure national food security and effective supply of major agricultural products, to promote steady growth of farmers’ income and to continue to provide forceful guarantee to the fast and smooth economic and social development.

I.    Strengthening protection of and support for agriculture

1.   Further increasing input in agriculture and rural areas

The expansion of domestic demand and implementation of an active financial policy will focus on agriculture, rural area and farmers (sannong) as the priority input. State input in rural infrastructure facility construction and social undertaking will be increased substantially, the proportion of budgeted investment in fixed assets in agriculture and rural areas will be increased and the use of the incremental state bonds will tilt to “sannong”. Out of the incremental proceeds of arable land occupation tax and government’s land lease, the proportion to be used in agriculture will be markedly increased. After the increase of the arable land occupation tax, all the incremental proceeds will be used in agriculture, and the proceeds land leases will be used to support agricultural land development and rural infrastructure facility construction as the priority. Input in rural public goods projects in central and western areas in China will be greatly increased.  Starting from 2009, the counterpart funding requirement at the county level and below for public goods construction projects arranged by the state in the central and western regions will be abolished, such as dam reinforcement, ecological construction, safe drinking water in rural areas and system component renovation of large and medium scale irrigation.  The incremental part of urban maintenance construction tax will be mostly used for township and village construction planning and construction and maintenance of rural infrastructure facilities. Localities with appropriate conditions can establish policy-oriented agricultural investment company and agricultural industrial development fund.

2.   Substantially increasing subsidies to agriculture

On the basis of substantively increased subsidies in the previous year, subsidy funds will be further increased in 2009. Direct subsidies to grain growers will be increased. We will increase subsidies to improved varieties to realize that the acreage of rice, wheat, corn and cotton is completely covered by improved varieties, and the subsidy scope for rapeseed and soybean will be expanded. Subsidies for the procurement of agricultural machinery will be increased, advanced and practical, safe and reliable, energy conservation and environment friendly agricultural machinery with mature technologies and good services will be incorporated in the catalogue of subsidies. The scope of subsidies will cover all agricultural and pastoral counties (farms), so as to lead popular application of agricultural machinery and the development of the agricultural machinery industry.  Comprehensive subsidies to agricultural production materials will be increased, the dynamic adjustment mechanism of subsidies will be improved, monitoring of the cost and benefit of agricultural production will be enhanced. In line with the price increase of agricultural production materials and the actual acreage of crops, subsidies will be increased in a timely manner. In accordance with the requirements of clear targeting, convenience, high efficiency, and being conducive to encourage grain production, agricultural subsidy methods will be improved. In association with actual situation of incremental agricultural subsidies, subsidies to grain production by large specialized households and family farms will be gradually increased.

3.   Maintaining reasonable price levels for agricultural products

We will closely watch the changes of domestic and international agricultural product markets, timely strengthen government regulation and flexibly measures to avoid the sliding of agricultural product prices and prevent low prices from hurting farmers, so as to guarantee the steady income growth of agricultural operations. In 2009, we will continue to increase the minimum purchase price of grains. National reserves of grain, cotton, edible vegetable oil and pork will be increased and local grain and edible oil reserves for 2009 must be completely implemented following the stipulated scale. Temporary purchases and reserves of major agricultural products can be initiated at appropriate times and enterprises are encouraged to increase commercial purchase and reserve. Coordination of north-south grain transportation and transportation of Xinjiang’s cotton should be strengthened, policies of subsidy and reduction and exemption of related transportation cost will continue to be implemented, enterprises from the marketing areas are supported to purchase in the producing areas. The opportunity and rhythm of major agricultural product import and export should be well mastered, support will be given to the export of advantageous agricultural products and measures should be taken to prevent excessive import of some products to impact the domestic market. 

4.   Enhancing rural financial service capacity

We will formulate implementation methods to encourage county level financial institutions of the banking industry to use the newly absorbed deposits for lending in local areas and independent examination mechanisms will be established. Under the conditions of strengthened supervision and risk prevention, we will speed up the development of multiple types of rural new financing organizations and regional medium and small banks that serve rural areas as the primary client. Financing institutions will be encouraged and supported to innovate rural new financing products and services, micro credit and micro financing services will be developed, rural micro financing organizations can through multiple methods get finance from financing institutions. The market consumption credit in rural areas should be actively expanded. Loans released against collateral as large agricultural production equipment with clearly defined property rights and controllable risk, forest rights and the use rights of four types of barren lands will be implemented in accordance with law, pledge loans against rights of receivables, warehouse receipts, transferable shares, patents and exclusive trademark rights should be carried out in accordance with laws. The concrete methods should be developed in a timely fashion for tax reduction and exemption and cost subsidy for agro-loans, medium and long term credit support of policy financing to agriculture and trials of credit cooperation to be carried out by farmer specialized cooperatives. The conditions for canceling bad debts of agriculture related loans of financing institutions will be relaxed. Efforts will be made to speed up the development of agriculture insurance policies, to expand the trial scope, to increase insurance products, to increase subsidy of the central government finance to the insurance premium of the central and western regions. The establishment of an agriculture reinsurance system and risk diffusion mechanism supported by finance for extreme disaster will be speeded up, while we encourage the development mutual cooperative insurance and commercial insurance in rural areas. The establishment of bank and insurance interactive mechanism of rural credit and agriculture insurance will be explored.