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How Much Benefit Can 'No.1 Document' Bring to Chinese Farmers?

Included in No.1 Document of the Central Government in 2005 are 27 policy rules and regulations beneficial for the farmers. How much "gold content" is there actually in it?

Full "acceleration ahead" with the exemption of agro-tax

Backdrop: there are 25 provinces, autonomous regions and municipalities in the country, that have announced the full exemption of agro-tax and it is likely to realize the exemption of agro-tax within 3 years, 2 years ahead of the timetable.

New spotlight in No.1 Document: "To further expand the areas where agro-taxes are exempted and enforce the strength in the reduction of agro-tax levying." "To make experimental spots for exempting the levying of agro-tax in the areas where the state has made as stressed counties for aiding the poor and in the other areas the rate for agro-tax will be further reduced." "In the pastoral areas the work can be conducted as experimental spots for exempting animal-husbandry tax." "It is permissible for the areas where conditions are ripe to carry out on their own account as experimental spots for the exemption of the agro-tax."

Appraisal: No.1 Document of the Central Government in 2004 succeeded in reducing a burden of 30.2 billion yuan (US$3.65 billion) off the farmers and in 2005 the central government has enforced the strength with great store set by establishing a mechanism of a prolonged effect for reducing the burdens of the farmers.

Reinforce the subsidies for farmers engaged in grain cultivation

Backdrop: There were many factors that helped the income increase for farmers in 2004. But one main factor is the policy that has helped the farmers increase their income and reduce burdens. Last year, except the "two reductions" out from the five policies that were most appreciated by the farmers, the other "three subsidies" brought to them a total-sum of 45.1 billion yuan (US$5.45 billion) of practical benefits.

New spotlight in No.1 Document: "Continue to offer direct subsidies to farmers engaged in grain cultivation and enforce the strength in the reduction of the agro-tax levying." "Central finance will continue to increase subsidies to the improved varieties of grains and to the purchase of agricultural machineries." "The central finance will take effective measures to offer awards and subsidies by way of payment transfer to the major grain production counties and areas in accordance with the grain-sowing areas, output and commodity grain and some other factors."

Appraisal: This year will see the central government continue to stabilize, and improve its support for the relevant policies of grain production. The farmers are quite initiative in the production of grains. The sowing areas in last autumn and winter have witnessed an increase of over 200 million mu (13.33 million hectares) of land, an indication that it is likely to see a stable growth in grain production and the continuous income increase for farmers will go on.

Investment input for supporting agriculture will exceed that of last year

Backdrop: In 2004, the budget expenditure arranged by the central finance for the "three agro-issues" namely agriculture, rural areas and farmers witnessed an increase of 30 billion yuan (US$3.62 billion) over that of the year before. The strength of support from financial policy for agriculture, the quickness in the implementation of policies and the more benefits obtained by farmers has never been seen likewise as ever before.

New spotlight in No.1 Document: "It's necessary to do the legislation as quickly as possible to make the major policy for supporting the agriculture by the state systematized and standardized." "Determination has to be made for adjusting the structure of income allotment among the Chinese nationals. While on the basis of all existing investments to agriculture the newly-added financial expenditure and fixed asset investment must be carried out truly to incline on agriculture, rural areas and farmers so as to establish a mechanism for a steady increasing investment to agriculture." "To set up special funds for subsidizing the construction of facilities and equipment for agro-irrigation."

Appraisal: This year will see the central finance continue to reinforce the support for agriculture and the newly-added expenditure by the central finance for agriculture is expected to overstep that of last year.

Financial reform in rural areas is surging to a new height

Backdrop: In 2004, the added value of agriculture in China came to take up 15 percent of the GDP. However, the credit balance of the agriculture came only to less than six percent in the financial organizations as a whole.

New spotlight in No.1 Document: "To encourage an active investment by social capitals in the development of agriculture and the construction of basic facilities in rural areas." "To reduce gradually the pairing ratio in the investment for fixed-assets in agriculture in the middle and western region of China." "To make clear the utility of the newly added deposits in the financial organizations, network spots at the county and below the county level for the support of the local agriculture and for the development of the rural economy." "Wherever conditions are ripe is allowed to tap for setting up organizations for small amount credit by natural persons or enterprises that are more appropriate and suitable to the needs of farmers and the rural areas."

Appraisal: Starting from 2005, the central administration will grasp firmly the study for working out a general plan for financial reform in rural areas so as to push forward the financial reform and innovation in rural areas, to score a breakthrough the capital bottleneck for the development of agriculture and the rural areas and finally to establish a stable capital channel in support of the agriculture.

The state to "pay more bills" for developing social affairs in rural areas

Backdrop: In 2004, all sorts of special funds put into compulsory education in rural areas by the central finance were up to 10 billion yuan (US$1.21 billion), a growth of 72 percent as against that of the year before. Support was also given to developing the construction of the experimental spots for a new-type of medical cooperation and the establishment of a system for medical rescue in rural areas and so on.

New spotlight in No.1 Document: "To make definite the regulations for the newly added funds for education, healthcare, culture and family planning to be used mainly in rural areas and for the rural areas at and below the county level the ratio of it must not be lower than 70 percent." "By the time of 2007, efforts should be made to make the whole country possible for those students from poor families receiving compulsory education to get books and other miscellaneous expenses free of charge with boarding students to get their subsistence." "To push actively and steadily forward the experimentation for a new-type of medical cooperation and medical rescue work in rural areas." "Earnest efforts have to be made to raise the level of broadcasting and TV show in every village and do a good job in delivering books and film-show to the countryside and the work of information sharing in rural areas."

Appraisal: In 2005, the central administration has made the determination to "pay more bills" for the development of social affairs in rural areas. By way of strengthening the input in the compulsory education, family planning, cooperative medical treatment, cultural construction and social rescuing work it is to make an obvious stepping-up for a full construction of a well-off society in the Chinese rural areas.

(People's Daily February 2, 200)

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