Farmer-friendly policies enable China to feed itself [Xinhua]

“…China started a process of rural tax reduction in 2001 and completely abolished all rural taxes in 2006, ending its 2,600-year history of taxation on farmers…”

NANCHANG, Aug. 29 (Xinhua) — Wang Shixue still remembers the days when the taxes he paid on his half acre of land amounted to more than his earnings from it.

"In 1999, I got 1,250 yuan (197 U.S. dollars) from farming but had to pay 1,500 yuan in 13 kinds of tax to the government, including agriculture tax, animal slaughter tax and education tax," says Wang, 40, a farmer in Yuandu Town, Fengcheng City of east China’s Jiangxi Province.

Unable to bear the taxes, many farmers gave up the trade and let their land become barren, which led Chinese grain output to drop from 500 billion kg in 1998 to 430.7 billion kg in 2003.

"Who Will Feed China?," a book published by American environmental analyst Lester Brown in 1995, continues to focus the world’s attention on Chinese food safety and the impact of low agricultural production not only on China’s own population but on the world’s.  The situation in the years immediately following its publication went some way to justifying Brown’s fears.

Today, however, China has emphatically calmed the panic through a series of corrective government policies.  Wang’s annual earnings from his 2011 harvest stood at 200,000 yuan, as the government’s purchasing price for grain grew from 70 yuan per 50 kg in 2004 to 120 yuan per 50 kg in 2012.

This summer, China has seen a bumper harvest in wheat and rice, marking year-on-year increases of 8.4 million tonnes and 9 million tonnes, respectively, in the country’s summer grain purchasing, according to Nie Zhenbang, former head of China’s State Administration of Grain.

It has been a long road to this point for Wang and the people of Yuandu. To voice their anger at tax burdens, a group of villagers attacked the Yuandu Town government compound in August 1999, a key moment in giving a warning to the policy makers.

"This event directly prompted the tax reform in Chinese rural areas," according to Chen Yongqiang, a researcher with the Jiangxi Provincial Rural Reform Leading Group Office…

…China started a process of rural tax reduction in 2001 and completely abolished all rural taxes in 2006, ending its 2,600-year history of taxation on farmers.

After leaving the land to his elderly parents, Wang Shixue worked as a carpenter in the city to support his three children.

As taxes eased, he senses the business oppotunities [sic] beneath the land. In 2003, dozens of villagers, still resigned to their agricultural land not being profitable, signed agreements with Wang allowing him to grow crops on 23 acres of fields for free.

One had to pay 90 yuan for one mu (0.16 acres) of land as tax at that point.  However, Wang, despite paying a total of 13,000 yuan in tax in 2003, made 8,000 yuan as profit, the first gain from farming in his lifetime.

His profits have grown steadily as China’s government began to give subsidies on farming in 2004 and set up a minimum purchasing price for grain.

Wang received about 3,000 yuan as subsidies in 2004. The sum grew to 30,000 yuan in 2011. Not only does he benefit from subsidies on seeds and other conventional farming fundamentals, but also subsidies when buying motorcycles.

"In 1999, a million farmers in Fengcheng City paid 240 million yuan in taxes," points out Wang Shangping, head of the city government’s financial bureau. "In 2011, they received subsidies of 175 million yuan."

China invested 4 trillion yuan in rural sectors from 2006 and 2011. Subsidies on grain production, seeds, agricultural machinery purchases and agricultural materials grew from 30.95 billion yuan in 2006 to 140.6 billion yuan in 2011.

To expand his business, Wang rented another 40 mu (6.6 acres) of land in 2011 at an annual price of 230 yuan per mu. He reaped 75,000 kg of rice in the first half this year and sold it for 210,000 yuan.

Looking to the future, he has invested more than 50,000 yuan this year to build water channels. The succesful farmer still wants to add to his rented land but it is getting increasingly difficult as more people are joining him in considering farming a viable business now.

As Chinese have become keener to farm, China embraced an eighth consecutive year of grain production growth last year, with an output of 571.2 billion kg.

The annual per capita income of Chinese farmers has also increased from 2,662 yuan to 6,977 yuan in 2011.

Experts say China has been maintaining a self-sufficient grain strategy and over 95 percent of rice and wheat has been produced domestically during recent years, which has helped the country resist the influence of global fluctuations.

"The consecutive grain output increases brought by the preferential policies and successfully coping with the 2007-2008 global food crisis have proved that the Chinese people are able to feed themselves," says Li Guoxiang, a researcher with the Rural Development Institute of the Chinese Social Science Academy.

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