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Steps to Reduce Rural Poverty

Poverty in China's rural areas is a problem that was years in the making, and today it has become one of the nation's top concerns.

The generally low income of Chinese farmers has been abetted by some old systems that are no longer applicable. Therefore, reforms are needed for the residence registration system, the land system and the public administrative system.

Discriminating between rural and urban domicile registration has not only blocked farmers from migrating to cities, but also shattered their dream of getting a better-paid job in the city.

China is one of the very few countries with such a backward domicile registration system still in place. Therefore, we should call for immediate adjustment of this system and promote rights of all farmers to bring them increased income.

The rise and fall of rural residents' income is largely decided by two factors: market and resources. However, these two factors have become increasingly unfavorable for China's rural residents. With regard to market environment, Chinese farmers have to face the reality of competition after China's entry into WTO. The average low price of global grain production determines our low grain prices, while low productivity results in the high cost of our grain production. Therefore, Chinese farmers suffer from a decreased marginal revenue, and even the government subsidies don't help much.

With regard to the limited land resource, 490 million Chinese farmers live on a relatively small patch of farmland of about 1.9 billion mu (127 million hectares). If a per capita farmland of 10 mu (0.66 hectare) is fair, some 170 million rural laborers are in surplus.

In addition, the mechanization of agriculture drives more farmers out of work. The harsh market environment coupled with the lack of resources dooms Chinese farmers to poverty.

Certain authorities point out the shifting of rural labor into cities provides a way out for the surplus rural labor force, and also boosts urban development. It is a key channel for increasing farmers' incomes, and for maintaining the competitive edge of China's low-cost manufacturing and service industries.

However, the smooth shift of the rural labor force into cities requires flexible management of the domicile registration -- a management which no longer classifies citizens into agricultural and non-agricultural groups.

The second factor that seriously restricts the growth of farmers' income is the current land system. It should also be put high on the government's agenda for rural reform.

Two inherent defects are responsible for the malfunction of the current land system.

First, farmers are not clearly entitled to their land. They have rights of land use over the land they contracted to work on. However, the land use rights are sometimes violated due to malpractice by local authorities.

Second, the low mobility in land transferring makes it impossible to develop scale economy in rural areas. Most of the functioning laws and regulations encourage land transferring and concentration, yet in reality they still cannot guarantee the smooth transferring and concentration of land resources. Being unable to develop scale economy, farmers' expectation of improving productivity becomes more and more obscure.

To vest farmers with better clarified land property, the government should make certain changes in the existing land system. Government could keep the present land system, while adopting feasible measures to ensure farmers their ownership of land. Once having every right in dealing with land, farmers would be greatly encouraged to invest more on their "own" land.

The last factor haunting Chinese farmers is the exceedingly complex public administration system. The low efficiency of the system hampers farmers' ability to improve their income. To smooth the functioning of the public administration system, the following three steps should be taken.

First, the local government needs to downsize itself to increase its efficiency. Statistics show the average number of staff within a small town government ranges from 60 to 100, some even to hundreds. The redundant personnel greatly burdens the small town government, dragging it almost to bankruptcy. The town government keeps excessive personnel, and the village government will surely follow suit.

Usually, there are 30 to 40 people within a village government, almost the size of a town government. These redundant staffs have "eaten up" the money assigned to some infrastructure construction projects, and to make a better living, they usually collect sundry fees under various "noble" titles. Farmers' hard-won revenues are sucked up by those redundant personnel. Of course, their initiatives are discouraged.

Simply for the sake of reducing administrative costs, the governments at all levels must downsize or eliminate administration at county and village levels.

Second, the public education system needs to be reformed. Primary and middle school education belongs to public goods, which are provided by government. Tuition fees should therefore be covered by public funds.

However, in some Chinese rural areas, farmers take up the burden of paying tuition fees for their kids. Analysts say that if farmers were freed from such heavy burdens, their annual income could increase by 30 percent.

Third, the public health system in rural areas should be improved to meet the national standard. In some poor areas in China, farmers have to pay medical bills themselves.

These poor farmers cannot afford to pay for a medical check-up, so they often do not bother. Farmers become poorer, and their health suffers -- a vicious circle forms.

To stop the situation from degenerating further, the government should develop a public healthcare system in the rural areas. Farmers will feel their life guaranteed and social status improved under such circumstances, and most importantly, their incomes increased.

(China Daily April 26, 2004)

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