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The curtain has gone down on the annual session of the National People's Congress, but people remain excited about the hot topics on the meeting's agenda. These include scrapping agricultural taxes and waiving tuition fees for rural children in their nine-year compulsory education.

Things do not stop here.

The NPC deputies and the general public are hugely concerned with issues involving agriculture, farmers and the countryside.

It has become a general practice for the Central Committee of the Communist Party of China to issue a No 1 Circular at the beginning of each year, with each document addressing the questions of farmers, agriculture and the countryside.

The drive to build a new countryside is expected to reach a climax after the NPC session. The farmers are getting closer to the prospect of their agricultural tax burden being totally removed from their shoulders, their children enjoying tuition waivers and affordable medical services being made available to them.

But this is no time for complacency.

Painstaking efforts, close co-operation between different sectors and rigorous implementation of correct policies are called for to get over a number of hurdles and barriers standing between us and our ultimate goal of bringing about a new countryside. Below is an outline of the issues we are facing.

1) Source of funds.

Central authorities have requested an increase in funds for rural areas, which in turn will increase by a larger amount each year. However, the policy may meet resistance.

Sectors and entities supposed to contribute money will certainly feel squeezed financially, even though central authorities have worked out the policy on the basis that the State coffers will be the chief source of funds.

2) Vested interests.

Increasing the State's financial support for agriculture calls for realignment of the established distribution model, as well as the reorganization of social resources as a whole.

This is very likely to encroach upon the interests of certain sectors and entities.

The situation could be compounded by the titling of taxation preference towards disadvantaged groups.

We should therefore brace ourselves for loud resentment. It is likely that some interest groups may set up barriers by formulating various kinds of rules and regulations in their favour.

3) Urbanization.

Currently, urbanization is proceeding in China at a rate of 1.4 per cent, which means that about 20 million farmers are disengaged from farming each year.

Urbanization is a double-edged sword.

When it proceeds too slowly, surplus rural labour cannot be channelled into other sectors and, as a result, the polarization between urban and rural areas remains a long-term problem.

When urbanization goes ahead too fast, cities and towns are unable to assimilate all the farmers pouring in. Shanty towns and slums can mushroom as employment is hard to find. Latin American countries offer us a lesson in this regard.

4) Fund channels

The term "fund channel" has two connotations. First, funds from authorities above are often misdirected on their way down to the grass-roots level. Second, it is hard for farmers to get large loans from banks with their land as mortgage. In fact, Chinese farmers have few fixed assets, as the land belongs to the State.

As a result, they can only get small loans from banks, which are not very helpful for upgrading farmers' production means and enlarging the size of his farming operations.

The only way out is to set up farming co-operatives. But whether the co-operatives comply with the inherent economic laws or not is a matter to be carefully studied.

5) Worsening ecological system

The average Chinese enjoys a very small share of natural resources. To make matters worse, the problems of dwindling arable land, shortage of fresh water supply and population growth are not likely to be redressed in the foreseeable future. As a result, agricultural production is increasingly subject to the restrictions imposed by the worsening environment. It is therefore very hard to both guarantee stable agricultural output and protect the environment from further deteriorating.

6) Property rights.

China is opposed to private ownership of land and implements a land-use transfer system, which takes various forms. Efficient and forceful institutional mechanisms and legal guarantees are needed to make this unique land-use system work. Otherwise, random requisitions of land will go unchecked.

7) Poor public services

Many rural clinics and seed supply outlets are being abolished due to the ongoing realignment of administrative functions in rural areas, This further weakens rural infrastructure.

If no way out is found, farmers' livelihoods and rural production will make little progress.

8) Lack of skills.

Large numbers of skilled professionals are badly needed: People who know the ins and outs of agriculture, farmers and the countryside, are equipped with knowledge of modern science and technology, possess managerial and organizational capabilities and are devoted to improving the lives of others. The problem is, these kinds of people are in extremely short supply.

In addition, information related to farm production, the market and technology is hard to acquire, which leads to decision-making errors and miscalculations in terms of agricultural production.

In sum, lifting farmers out of poverty is at the core of the construction of a new countryside, and is the fundamental task for the nation's sustainable development. Surmounting all the barriers mentioned above is obviously beyond the capabilities of just a few government departments. Instead, it calls for the involvement and co-operation of all sectors, organizations and people.

(China Daily March 16, 2006)

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