Transforming the nation's vast rural area into a "new
countryside" requires all-out efforts from the Chinese government.
Of these new efforts, a huge increase in fiscal support is not only
what farmers most need, but also what policy-makers are best placed
to deliver.
The newly published No 1 Document of 2006 on rural revival, the
third of its kind since 2004, has made clear the central
government's resolution to increase spending on the rural
sector.
Details will not be available until the unveiling of the
country's economic plan at next month's National People's Congress.
But the government is already committed to spending more on rural
development than the previous year.
Such an endeavor has distinguished this national campaign from
the one during the 1980s when the central government devoted five
"No 1 Documents" to facilitating agricultural development.
Rural productivity was considerably raised to narrow the
emerging urban-rural development gap during the early years of
China's economic take-off.
Yet, after more than two decades of industrialization-driven
economic expansion, the urban-rural divide is widening again to
such an extent that it has threatened the country's pursuit of
balanced and sustainable development.
Nowadays the country's farmers earn on average only one third of
what their urban peers make, not to mention the far better
education, health care and social security city dwellers enjoy.
The gaping urban-rural divide cannot be fully bridged in a
single stroke. It will take many years to establish the
infrastructure high-efficiency modern agriculture needs. We need to
first plug the gap from further growth, before working to narrow
it.
To this end, generous fiscal support is a quick solution, and
possibly an effective one.
In terms of reducing farmers' financial burden, the Chinese
government has already achieved some results by gradually
abolishing agricultural tax since 2004. A total scrapping of this
tax will be carried out across the country this year.
Such a tax cut alone is not enough, as only a fraction of income
has been saved for the average farmer by this decision. But it
signals a significant change in the focus of the country's tax and
fiscal policies. The country has decisively shifted from the
decades-old practice of accelerating urban growth at the cost of
rural development.
It is time to let industry feed agriculture, and let urban areas
support rural ones. A drastic adjustment in the focus of fiscal
input should herald other changes.
Only when government-funded infrastructure is put into place
will investors follow to seek business opportunities in rural
areas. Only when rural health and education are upgraded with ample
public spending can farmers get ready to raise their
productivity.
The double-digit growth of the country's tax revenues, which
topped 3 trillion yuan (US$370 billion) last year, has made
fiscally possible a substantial increase of government expenditure
on the rural sector.
Moreover, the nationwide consensus on the urgency of building a
better-off rural sector also helps tilt the fiscal policy in favor
of farmers.
When lawmakers gather in Beijing to review and approve the
central government's new budget in a few days, a larger share of
public spending for the rural sector will be a sure bet. That
should be welcomed.
However, one thing lawmakers need to carefully examine is
whether a long-term mechanism to ensure strong fiscal support for
sustainable rural development has been brought into form.
The other thing they should pay no less attention to is whether
adequate measures have been taken to address low-efficiency in use
of public funds by local governments.
(China Daily February 24, 2006)