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Government Pledges Tax Reduction, More Funds for Farmers

China's top planner and financier Saturday both put forward concrete measures to help farmers earn more by reducing levies and increasing investment in the countryside.


The move followed Premier Wen Jiabao's call for dealing with the disparity between urban and rural development at the ongoing second session of the National People's Congress (NPC), China's parliament.


"This year we must take more direct and effective policies and measures to strengthen, support and protect agriculture and increase rural incomes in line with the need to balance urban and rural development," said the premier in his report on the work of the government to the NPC session Friday.


Delivering a report on economic and social development at the session Saturday morning, Minister in charge of the State Commission for Development and Reform Ma Kai reiterated the principle of "giving more, taking less and loosening control" for rural development.


The government will strive to increase rural incomes, aiming for an increase in the per capita net income of 5 percent and increase the yield per unit area and ensure that grain output totals 455 billion kilograms this year, Ma said.


Ma said that the government will continue to carry out strategic restructuring of agriculture and the rural economy, implement a plan to arrange where crops are grown so as to use cropland to the best geographical advantage, and strengthen research in agricultural science and technology, apply research results more widely, increase the degree of processing of farm and livestock products and improve the distribution of farm products.


China will develop farmers' cooperatives for specialized production and speed up industrialization of agricultural operations, strengthen the emergency animal epidemic prevention system, improve the system of quality standards and the system for inspecting and testing farm products, and implement the Action Plan for Pollution-Free Food, according to the top planner.


Vocational training will be offered to rural laborers, and better information will be provided to guide the movement of surplus rural labor in an orderly way, Ma said, adding that the problem of withholding or delaying payment of the wages of migrant rural workers in cities must be solved, and a mechanism to ensure the timely payment of such wages will be established and improved. Pay for farmers will be included in the budgets for government-financed rural construction projects to ensure they are properly paid, he said.


Minister of Finance Jin Renqing said told the parliament in his budget report that the government will deepen the reform of rural taxes and administrative charges, reduce the rates for agricultural taxes and eliminate taxes on all special agricultural products except tobacco to effectively lighten the burden on farmers.


Except for tobacco, the tax on special agricultural products will be rescinded in 2004 and the overall agricultural tax rate will be reduced by over one percentage point, with a greater reduction for major grain producing areas and grain producers. This may reduce the burden on farmers by as much as 11.8 billion yuan, Jin said, adding that the agricultural tax will be rescinded in five years.


In light of the specific difficulties in local budgets, the central government will provide appropriate transfer payments to offset revenue decreases in local budgets, especially in budgets of major grain producing areas and the central and western regions, brought about by eliminating the tax on agricultural specialty products and decreasing the agricultural tax rate, the finance minister said.


Funds totaling 39.6 billion yuan in the form of transfer payments from the 2004 central budget will be set aside for the reform of taxes and administrative charges in rural areas, a year-on-year increase of 9.1 billion yuan, according to Jin.


(Xinhua News Agency March 6, 2004)

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