Why is the agricultural subsidy policy adjusted?

The Ministry of Finance and the Ministry of Agriculture announced on the 22nd that this year, pilot projects will be launched in five provinces, including Anhui, Shandong, Hunan, Sichuan and Zhejiang, to adjust and improve China's three subsidy policies, namely, subsidies for improved varieties of crops, direct subsidies for grain farmers and comprehensive subsidies for agricultural materials.

Relevant responsible persons of the Ministry of Finance and the Ministry of Agriculture told reporters on the 22nd that since its implementation in 2004, China's three agricultural subsidy policies have played a positive role in promoting grain production, increasing farmers' income, and promoting agricultural and rural development. however, with the profound changes in the situation of agricultural and rural development, the effect of the agricultural "three subsidies" policy is decreasing, which urgently needs to be adjusted and improved.

The third Plenary session of the 18th CPC Central Committee and the No. 1 document of the CPC Central Committee in recent years clearly put forward the need to improve the agricultural subsidy policy and reform the agricultural subsidy system. In view of the problems found in the implementation of the current agricultural subsidy policy, the two departments put forward suggestions to adjust and improve the agricultural subsidy policy, which was agreed by the State Council.

According to the heads of the two departments, the adjustment and improvement of the agricultural "three subsidies" policy is mainly divided into two aspects: the first is to adjust 20% of the comprehensive subsidy funds for agricultural materials nationwide, plus the pilot funds for subsidies for large grain growers and the incremental funds for the "three subsidies" in agriculture, which are used as a whole to support the appropriate scale operation of grain. The support targets are moderate-scale producers and operators of major food crops, with emphasis on new types of operators such as large grain growers, family farms, farmers' cooperatives, agricultural socialized service organizations, and so on. The second is to select some areas to carry out pilot reform of the "three subsidies" in agriculture.

According to reports, the two departments also require all localities to take positive and effective measures to further support the appropriate scale operation of grain in the process of adjusting and perfecting the agricultural "three subsidies" policy, including focusing on supporting the establishment and improvement of the agricultural credit guarantee system. Efforts should be made to solve the problems of "financing difficulties" and "high financing" of new operators in grain moderate scale operation. It is encouraged to support the appropriate scale operation of grain by means of loan discount, direct cash subsidy, major technology popularization and service subsidy, and the loan interest of the appropriate scale operator of grain can also be given an appropriate subsidy of no more than 50% of the loan interest.

The two departments said that adjusting and improving the agricultural "three subsidies" policy is an urgent need to change the mode of agricultural development and improve the effectiveness of the agricultural subsidy policy. In most places, the "three subsidies" for agriculture have evolved into income subsidies for farmers, and some farmers can get subsidies even if they do not grow grain or land. However, new types of operators, such as large grain growers, family farms and farmers' cooperatives, who are really engaged in grain production, are difficult to get subsidies in addition to their own contracted farmland. The role of the agricultural "three subsidies" policy in arousing the enthusiasm of growing grain and promoting grain production has been greatly reduced. Therefore, it is urgent to adjust and improve the agricultural "three subsidies" policy to enhance the directivity, accuracy and effectiveness of the agricultural "three subsidies", to strengthen the support for the appropriate scale operation of grain, and to improve the effectiveness of the agricultural "three subsidies" policy.

In addition, the two departments said that adjusting and improving the current agricultural "three subsidies" policy will help China to follow the rules of the World Trade Organization and further increase its support to agriculture and rural areas through the "green box policy" measures.