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Basic Approach and Policy Options for Rural Reform and Development during 12th Five-Year Plan Period

Dec 15,2010

Han Jun, Xu Xiaoqing, Guo Jianjun, Yu Baoping, Qin Zhongchun, Zhang Yunhua & Fan Xuezhi

Research Report No 97, 2010

After 30 years of reform and opening-up, China's overall national strength is significantly improved, and China has entered the stage where industry promotes agriculture and urban areas elevate rural areas with significantly enhanced ability of getting industry supporting agriculture and urban areas supporting rural areas And rural development has also entered a new stage where the policies to aid agriculture and benefit farmers are basically formed and a system framework to promote urban-rural integral development is initially established. New changes of national economy and rural development provide important historical opportunity for accelerating agricultural and rural development. Without developed agriculture, there would be no survival guarantee to the whole society; without prosperous rural areas, there would be no stable foundation for the whole society; without rich farmers, there would be no a solid foundation for building a harmonious society. To achieve overall construction of a better-off society and accelerating the development of modernization, the hardest and harshest task lies in rural areas. During the period of "12th Five-Year Plan", we should take the reform and development of countryside into the consideration of the overall situation of the cause of socialism with Chinese characteristics, and we should make the arrangement under the circumstances of deepened development of industrialization, urbanization, marketization, informationization and internationalization. We should thoroughly implement the policies set at CPC's 17th National Congress, and the Third and Fourth Plenary Sessions of 17th CPC Central Committee. We should hold high the "great banner of socialism with Chinese characteristics", follow the guidance of Deng Xiaoping Theory and the thought of Three Represents, thoroughly apply "Scientific Outlook on Development", balance urban and rural development, and take issues facing agriculture, rural areas and farmers as the top priority of the Party's work. We should take the construction of modern agriculture and promotion of rural construction as China's social and economic strategic basis for further development, and take the progress of integrating economic and social development in urban and rural areas as major strategy of China's modernization drive. We should implement the policy of "giving more, taking less and loosening control", deepen rural reform and push forward the institutional innovation, take the road of agricultural modernization with Chinese characteristics, promote the stable development in agriculture, growth in farmers' incomes, strive to guarantee the basic supply of main farm products, solve problems about livelihood in rural areas, and make progress in integrating economic and social development in urban and rural areas. We should make countryside embark on a road of civilized development with developed production, affluent life and a sound ecological environment, and realize rural and urban benign interactivity, coordinated development and common prosperity.

I. Basic Approach for Rural Reform and Development during "12th Five-Year Plan" Period

1. Improve basic management system in rural areas, guarantee the predominant status of famers' household business and accelerate the "Two Transformations" in agricultural business operation.

The two-tier management system that integrates unified with separate management on the basis of household contract management is the basic management system in China's rural areas and the cornerstone for the Party's rural policies. The fundamental issue to improve rural areas' reform and innovation must lie in the fact that on the basis of guaranteeing farmers' family-oriented contract operation, we should combine these advantages of family's decentralized operation with those of unified management and services, accelerate the "Two Transformations" in the mode of agricultural operation, such as household operation transforming toward adopting advanced technology and means of production, unified management developing toward cooperation and co-management with farmers, so as to form a diversified, multi-level and multi-form operation and service system.

We should unswervingly stick to household operation mode and promote its intensification level. From the perspective of world's agricultural developments, the household management does not only apply to traditional agriculture which is based on manual labor, but is also in line with modern agriculture with advanced scientific technologies and production measures. As it is the most popular operation pattern in agricultural industry, we do not have to worry about the issue of changing household operation after enhancing the productivity level. From other countries' practices, the small-sized land management pattern does not repel the application of advanced agricultural technologies, such as high-quality seeds, fertilizers, pesticides, irrigation techniques and so on, and it is not strongly connected with farmers' land management; And for the use of agricultural machines, although those farmers with scaled farming may be limited to some extent, they can still realize higher mechanization and application efficiency by purchasing suitable agricultural machines or through buying socialized agricultural machinery services. The fact that China has a vast population with limited farmland determines that there is no possibility to take the road of developed European and American countries with large-sized farmland and agriculture modernization. The practical measure of reforming Chinese traditional agriculture is to improve intensification of household operation, but not to focusing on enlarging size of land operation. According to international experience, the efficient petty-farmer economic regime is the basic social mechanism for the countries with large population and limited farmland to guarantee farmer's livelihood. And the basic regime can provide social transformation with security mechanism. In view of China's specific national conditions with a huge population and limited farmland, the improvement of agricultural modernization will mainly focus on consistent family-oriented management and the principle of farmland only for agricultural use, encouraging concentration of land to professional farmers, guaranteeing farmer's operation and benefits, avoiding industrial and commercial enterprises from leasing farmers' contracted farmland for long time and in large size, and also preventing them from acquiring and merging large-sized farmland.

We should improve agriculture's unified management regime and improve the degree of farmers' organization. On the whole, it is still hard for Chinese agriculture's unified management and service regime to meet requirements of modern agriculture's developments. To improve the unified operation mechanism is not to abandon household contract management, but provide better services to household management. In practice, collective organizations at village level in some developed areas with adequate financial resources can provide unified service to farmers, but majority of collective organizations at village level with humble income may be low in capacity to offer farmers with production and management service. We should strengthen financial guarantee for normal operation at village level, give a further full play to collective organization's capability at countryside level in aspects of unified management and service, and reinforce the villages' capacity of public administration and services. At present, the new styled farmer cooperation organization has not given its full play. We should take regulation and development of the specialized farmers' cooperatives as the strategic measures for further carrying out management institutional reform at countryside. We should bring into full play farmers cooperatives' functions in organizing farmers, implementing policies and gearing up for market according to the principle of "serving farmers, giving farmers right to join and leave cooperatives on a voluntary basis,, giving farmers equal rights and enacting a democratic management". We should reinforce the support to specialized farmers cooperatives, fulfill Laws of the People's Republic of China on Specialized Farmers Cooperatives, support the development of specialized farmers cooperatives in the aspects of fiscal allocation, tax preference, financial support and so on, enhance its capability and level of serving agricultural industry, and make it to be the modern agricultural organization in guiding farmers to participate in both domestic and foreign market competition. Government's non-profit agricultural service organizations, various kinds of agricultural socialized service organizations, industrial management organizations, and leading enterprises with the participation of farmers for industrialized operations all play an important part in offering service and guiding farmers to enter market. We should strive to develop diversified agricultural service regime, promote reform and construction of agricultural technology popularization, strengthen nonprofit service, improve organization and service team, establish fund protection mechanism, and accelerate the application of science and technology by farmers. We should intensify mechanism innovation, give full play to two mechanisms' capabilities including governmental guidance and market drive, quicken cultivation of all kinds of agriculture's socialized service organizations, and promote comprehensive services in the fields of information, technology, purchase and selling, finance, agricultural machines and so on.

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