Farmer Zheng Chanzi in North China's Hebei Province has many reasons to be pleased this summer. When he was busy cutting wheat, which grew better than previous years, news came that the government had further cut down the agriculture tax and raised the grain price by 60 percent, to 1.5 yuan (about 8.10 yuan against the US dollar) per kilogram.

"That means we earned several hundred yuan more from the summer harvest alone," says Zheng, who farms on a plot of 6.5 mu (15 mu equals a hectare). For farmers whose per capita annual net income averages at 2,900 yuan, this increase in income is by no means small.

Zheng lives in a village called Xijing on the North China Plain, one of China's "bread baskets." There are two harvests every year, customarily wheat for summer and corn for autumn.

Like Zheng, farmers in China benefit from the latest tax exemption offered by the government, which are meant, above all, to ensure food security for this most populous country in the world and make life better for rural population.

While the country is endeavoring to promote industrialization and urbanization, agriculture is continuously regarded as "fundamental," since China has 70 percent of its 1.3 billion population in rural areas, the largest of rural population in the world. Many of them are still stricken by poverty.

"China will give priority to achieving sustainable agriculture and rural development, as it is the basic guarantee for sustainable social and economic development," says Wen Jiabao, Chinese Premier.

Agricultural reform heralded China's economic reform in the late 1970s. The contracted responsibility system, which links income to household output, greatly boosts farmers' enthusiasm and galvanizes the rural economy.

Thanks to policies of the reforms and opening up over the past 25 years, farmers have become more enthusiastic to grow crops, and China had a summer grain harvest of 106.27 million tons this year, an increase of 5.12 million tons, or 5.1 percent, from a year earlier, according to the National Bureau of Statistics. This year's early rice production also increased.

This follows a bumper harvest in 2004, when 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. (

To further remove financial burdens on Chinese farmers, the government makes efficient rural taxation reform.

China began levying agriculture tax in 1958 and has since remained one of a few nations that impose such tax in the world. Such tax used to stand at some 50 billion yuan, or 3 percent of China's total annual tax revenues, before the rural taxation reform started.

In 2000, China first launched its experimental reform on rural tax and fee systems in East China's Anhui Province, in an effort to standardize the tax burdens on farmers and eliminate the growing administrative and arbitrary fees.

This year, as nearly 90 percent of China's provinces and autonomous regions have abolished agriculture tax, the tax revenue will reduce to 1.5 billion yuan or so, down 93 percent from last year. Next year, all the 900 million rural residents in China will be exempted from agriculture tax, three years ahead of the government's timetable.

Experts say that exemption of agriculture taxes will not affect China's fiscal stability but will greatly help agricultural development.

To boost farmers' initiative and ensure food security, the Chinese government also increases direct subsidies, up 10 percent this year, to grain growers in some 800 major grain-producing counties across the country this year.

According to Zhu Zhigang, Vice-Minister of Finance, 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.

In 2004, China granted 11.6 billion yuan of direct subsidy to farmers nationwide, a move that "made at least 98 percent of the farmers happy," says Zhu, citing a survey conducted by his ministry.

BETTER PROTECTION OF FARMLAND

While farmers show increasingly greater interests in cultivation, some of them have to leave their land as the process of industrialization and urbanization accelerates in China.

Statistics show that more than 20 million farmers are "laid off" from their land in the past 13 years due to land requisition for construction. From 1996 to 2004, China's arable land shrank from 130 million hectares to 122 million hectares. At the same time, China's population has been growing by 10 million annually on average. China has to feed 22 percent of the world population on only 7 percent of the total arable land.

"Land is the lifeblood of farmers. It is the only way for them to subsist on," says Minister of Agriculture Du Qinglin.

The serious land situation forces the Chinese government to be tough with land policies. In April 2004, the State Council halted the ratification of farmland for other uses for six months and started to rectify the national land market. Special teams organized by seven departments under the State Council were sent to various localities to investigate results of the rectification. Any practices of land abuse will face severe punishment.

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

The measures taken so far have been quite effective in protecting farmland, but China still has a fairly long way to go to keep enough land for sufficient food supply.

Despite overall improvement of farmers' lives in the past decades, the widening income gap between farmers and urban residents in recent year constitutes a grave challenge to China's economic and social development and one of the root causes of social disharmony.

Statistics show that the average annual disposable income of urban residents was 3.11 times the average annual income of farmers last year. Annual incomes for city dwellers average more than 1,000 US dollars, against 355 US dollars for farmers.

Besides, China still has 90 million people, about 10 percent of the rural population, whose annual per capita net income stands at or below 105 US dollars, the poverty line.

Farmers' weak purchasing power has become a drag on China's economy, which is yet to fully recover from lingering deflation.

"The coordinated and balanced development of urban and rural areas is of vital importance to achieving the country's goal of building an all-round prosperous society," says Professor Gong Weibin, an agricultural expert with China's National School of Administration.

The central government has responded, first, by elevating the education and training levels of farmers. Lack of education and training has been regarded as the sources of poverty in China's rural and mountainous areas.

Several years ago, China's poverty reduction drive simply provided money and supplies to farmers.

"Practice has shown that just providing funds is not effective in helping farmers completely shake off poverty," says Gong Weibin. "Needy farmers can really find a way for self-development after they possess the ability to make a living on their own."

China will provide strong technological and personnel support to agricultural development by relying on science and education, says Chinese Vice-Premier Hui Liangyu.

With regard to surplus rural laborers by millions, farmers are encouraged to work in cities and towns, which not only increase farmers' income but implant some new ideas in their mind that are conducive to local economic development.

Meanwhile, the government is determined to turn farmers' reliance from the farmland to the formal social security system in both legislation and policy-making.

Currently, 52 million of the Chinese farmers have joined in the rural old-age insurance system and 2.2 million have received pensions. More than 80 million farmers had participated in the rural cooperative medical service system by the end of 2004, and 12.57 million rural needy people had drawn allowances guaranteeing the minimum living standard by the end of last year.

Experts consider that the Chinese government, aiming to build a harmonious society, must take its 900 million farmers into the social security system, which is a premise for social stability and can help promote China's advance from an agriculture country to an industrialized country.

Source: Xinhua