China reaffirmed its commitment yesterday to boost rural economic growth and improve the living standards of its 900 million farmers. The central government will spend more on rural projects and better protect farmland.
Jiang weixin, vice minister of the State Development and Reform Commission, said the central coffer will increase funds at least 2.4 percent annually to foster rural infrastructure development this year, despite a significant drop in 2005 treasury bonds sales.
The central government will issue 80 billion yuan (US$9.6 billion) in long-term treasury bonds in 2005, 30 billion yuan less than last year, according to a budget report submitted to the ongoing annual legislative session.
Last year the central government allocated 37.6 billion yuan of treasury bond proceeds to boost agriculture.
At yesterday's press conference on rural affairs, Vice Minister of Finance Zhu Zhigang predicted a 10 percent increase in direct subsidies to grain growers, "a move to boost farmers' initiative and ensure food security."
In 2004, China granted 11.6 billion yuan in direct subsidies to 600 million farmers across 29 provinces, autonomous regions and municipalities, a move that "made at least 98 percent of the farmers content and happy," said Zhu, citing a survey conducted by his ministry.
To spur grain production, 5.5 billion yuan in cash rewards will be offered to some 800 major grain producing counties across the country this year, Zhu said.
"The total grain output of these counties makes up 60 percent of the national total and at least 80 percent of commodity grain on the market," Zhu said.
But many of these counties are in financial difficulty, as a result of single product mix and relatively low economic returns.
Zhu said rewards will be granted in proportion to counties' grain acreage and output. The money can be spent on agricultural development, technological innovation, education, culture, public health or other areas to boost the rural economy and raise the quality of life for farmers.
"But in no circumstances should the money be spent on vanity projects, such as office buildings for local governments," Zhu said. "Any county that misuses the cash will be erased from the list of awardees."
In the past, grain-producing counties found themselves in a dilemma despite contributing to the country's food supply.