The agricultural support policy system "two more, three less" urgently needs to be resolved

[ China Agricultural Machinery Industry News ] China's agricultural support policy system should focus on solving the problem of “two more, three less” with more inclusive subsidies, more price protection, less productive inputs, less infrastructure investment, and less ecological compensation. As China's economic development enters a new normal, the situation facing agriculture is more complicated. It is urgent to sort out the existing policies and gradually improve the agricultural support protection policy system.

The agricultural support policy system "two more, three less" urgently needs to be resolved

China's agricultural support protection policy system has undergone a long process, from the production input policy of the 1980s, the purchase and sale policy of agricultural products (000061, stocks) to the formation of capital investment, price support, production subsidies, and ecological compensation. It has been more than 30 years. In particular, between 2004 and 2014, a number of supporting agricultural policies were intensively introduced, and the gold content was high, which became the “golden policy period”.

These policies have played an important role in the “twelve consecutive increases in grain production” and the increase in farmers’ incomes by “twelve consecutive times” and accelerating the integration of urban and rural development. As China's economic development enters a new normal, the situation facing agriculture is more complicated. It is urgent to sort out the existing policies and gradually improve the agricultural support protection policy system.

For a long time, in order to support industrial development, agriculture has paid a huge price. In the late 1990s, the Party Central Committee proposed a strategy for coordinating urban and rural economic and social development, industrial support for agriculture, and urban support for rural areas. In accordance with the principle of giving more, less, and releasing, the policy of strengthening agriculture, benefiting farmers, and enriching farmers was strengthened. In particular, after 2004, the Party Central Committee and the State Council successively issued a number of agricultural documents, which promoted the development of agriculture, forestry, animal husbandry and fishery. The rapid growth of fiscal revenue also laid a solid foundation for increasing agricultural investment. Expanded to form a relatively complete policy system.

Definition of the Connotation of Agricultural Support System

The agricultural support protection policy used to be called the agricultural input policy. The Agricultural Law promulgated in 1993 lists the “National Agricultural Inputs” as a separate chapter. Articles 42 and 45 clearly stipulate that “the annual increase in total agricultural investment by the state finance should be higher than that of the national fiscal recurrent income. The growth rate and the national agricultural input are mainly used to control the backbone projects of large rivers and large lakes, large-scale water conservancy projects such as flood control, flood control, water diversion, irrigation, key infrastructure for agricultural production and agricultural product circulation, commodity grain and cotton production bases, timber forest production bases and Seven aspects of shelter forest engineering, agricultural education, agricultural research, technology promotion and meteorological infrastructure.

In addition, Article 36 clarifies that the state implements a protection price acquisition system for important agricultural products related to national economy and people's livelihood such as grain, and establishes a risk fund. This has become an important legal basis for the state to implement macroeconomic regulation and control of important agricultural products such as grain and to protect domestic agriculture in the future negotiations of the World Trade Organization.

In 1998, China is about to join the WTO. According to the WTO Agreement on Agriculture, members must report their domestic support level according to the stipulations, that is, the government's fiscal expenditure for agriculture. Thus, the term “agricultural support protection” has entered people's field of vision.

Since then, China has revised the "Agriculture Law" and expanded the concept of "national agricultural investment" to "agricultural input and support protection." And in Article 38, the funds allocated to agriculture arranged in the budgets of governments at all levels should be mainly used to: strengthen the construction of agricultural infrastructure; support the adjustment of agricultural structure, promote the industrialization of agriculture; and protect the comprehensive production capacity of grain, Safeguard national food security; improve animal and plant quarantine and epidemic prevention systems, strengthen animal disease and plant diseases, insects, weeds, and rodent pest control; establish and improve agricultural product quality standards, inspection and inspection supervision systems, agricultural product markets and information service systems; support agricultural research Education, agricultural technology promotion and farmer training; strengthening the construction of agricultural ecological environment; supporting the development of poverty-stricken areas; and ensuring the income level of farmers.

In addition to the level of domestic support, the “Agricultural Support Protection” referred to in the WTO Agreement on Agriculture also includes measures such as market access (import quota), export subsidies, animal and plant quarantine, etc., collectively referred to as the four pillars of the WTO Agricultural Agreement.

The Agricultural Law, which was revised and adopted in 2002, is in line with it. Article 37 stipulates that “the state establishes and improves the agricultural support protection policy system, adopts financial input, tax incentives, financial support and other measures, from capital investment, scientific research and technology promotion, Education and training, agricultural production materials supply, market information, quality standards, inspection and quarantine, social services and disaster relief support farmers and agricultural production and operation organizations to develop agricultural production and raise farmers' income levels. In Articles 33, 35, and 46, respectively, clear provisions are made on the pricing level of protection prices for some grain varieties, the use of food risk funds, and the establishment and improvement of agricultural insurance systems.

In the agricultural support protection policy system, the core is the input policy. Agricultural input in a broad sense refers to the total input of agriculture in the whole society, including the input of agriculture and government to the agricultural sector. Agricultural investment in the narrow sense refers only to the government's total investment in agriculture, that is, the agricultural expenditures of financial funds arranged by governments at all levels, excluding rural social undertakings.

Evolution of the agricultural support system

After 1998, agriculture entered a new stage of development. As the country's financial resources increase, the state has the ability to expand its support and protection of agriculture. From time to time, it can be roughly divided into three stages: investment support, establishment of productive subsidies, and price protection level and subsidy level.

(1) Investment-oriented support stage based on improving rural infrastructure (1998-2003)

In the context of the Asian financial crisis, the state implemented a proactive fiscal policy, issued large-scale treasury bonds, and spurred the construction of domestic infrastructure. In 1998, it issued 100 billion yuan of treasury bonds. Agricultural infrastructure has become the main investment of treasury bonds, accounting for about one-third of the funds, and has begun to extend to rural infrastructure.