Third Session
10th National People's Congress and
Chinese People's Political Consultative Conference

China Vows More Spending on Rural Projects

China reaffirmed its commitment Thursday to boost rural economic growth and improve living standards of its 900 million farmers with more spending on rural projects and better protection of basic farmland.

Jiang Weixin, vice minister of State Development and Reform Commission, said the central coffer will increase input -- in the forms of treasury bond proceeds and additional allocation from the central budgets -- by at least 2.4 percent annually to foster rural infrastructure development this year, despite a significant drop in its treasury bonds sales in 2005.

China will issue 80 billion yuan (9.6 billion US dollars) of long-term treasury bonds in 2005, 30 billion yuan (3.6 billion US dollars) less than last year, according to a report on government budget submitted to the ongoing annual parliament session.

Last year the central government allocated 37.6 billion yuan (4.5 billion US dollars) of treasury bond proceeds to boost agriculture.

At Thursday's press conference on rural affairs, agriculture and farmers, Vice Minister of Finance Zhu Zhigang predicted a 10-percent increase in direct subsidies to grain growers, "a move to boost farmers' initiative and ensure food security."

In 2004, China granted 11.6 billion yuan (1.4 billion US dollars) of direct subsidy to 600 million farmers in 29 Chinese provinces, autonomous regions and municipalities, a move that "made at least 98 percent of the farmers content and happy," said Zhu, citing a survey conducted by his ministry.

To spur grain production, China plans to offer 5.5 billion yuan (662 million US dollars) in cash rewards to some 800 major grain-producing counties across the country this year, Zhu said.

"The total grain output of these counties makes up 60 percent of China's total and at least 80 percent of all the commodity grain on the Chinese market," Zhu said at a press conference on the sidelines of the ongoing third annual session of the 10th National People's Congress.

But many of these counties are in financial difficulty, as a result of single product mix and relatively low economic returns.

Zhu said the reward will be granted in proportion to the counties' grain acreage and output and can be spent on agricultural development, technological innovation, education, culture, public health and any other fields to boost rural economy and raise the quality of the farmers' life.

"But in no circumstances should the money be spent on vanity projects, such as office buildings for the local governments," said Zhu. "Any county that misuses the fund will be erased from the list of awardees."

In the past, grain-producing counties found themselves in a dilemma despite their contribution to the country's food supplies.

China moved to step up grain production last year when grain output had kept falling for five consecutive years from 1999 to 2003, which aroused concern over food security and drastic hikes in grain prices.

In 2004, China's grain production hit 469.5 million tons, 38.8 million tons or 9 percent more than the previous year, the biggest ever annual growth rate. "This is a result of our agriculture-friendly policies, efforts from the farmers themselves and the good weather condition last year," said Du Qinglin, minister of agriculture.

But Du warned it remains a "pressing" and "arduous" task to address all its rural issues properly, increase agricultural production capacity, and foster social and economic development in the vast countryside.

Complaints that local officials seize farmland for real estate development and other uses with little compensation to farmers, for example, have drawn the attention of the central government, Du said in response to a question raised by a journalist.

"Land is the lifeblood of farmers. It is the only way for them to subsist on," he added, noting his ministry also received some petitioners with complains about land disputes. "The central government is fully aware of the importance of the problem."

He said the State Council, China's Cabinet, has issued three circulars urging still better protection of cropland. "We'll deal with the disputes in an appropriate way and we promise not to reduce acreage of basic farmland, change its purpose or downgrade its quality," Du said.


(Xinhua News Agency March 11, 2005)


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