China has vowed to increase the output of high-quality products by deepening supply-side structural reforms in agriculture, a move that is expected to help farmers explore opportunities created by the emerging middle class.
At a press conference held in Beijing on Monday, Tang Renjian, deputy director of the central rural work leading group, said that there are pressures on the supply side and called for a more competitive and efficient agricultural development based on innovative and green production.
Targeted measures will be adopted, including vigorously controlling water usage, limiting the usage of pesticides and fertilizers and establishing innovation centers for better farm produce, according to a policy document released late on Sunday by the Central Committee of the Communist Party of China (CPC) and the State Council.
This is the Chinese authorities’ first policy document of 2017, marking the 14th consecutive year that the “No.1 central document” has focused on rural and agricultural reforms.
During the 13th Five-Year Plan (2016-20), rural and agricultural investment is estimated to reach 3.4 trillion yuan ($496 billion), more than three times the amount from the previous five-year plan period, according to Tang, who also called for private capital to enter the field.
According to the document, national grain security must be guaranteed during supply-side structural reforms in the agricultural industry.
Following several fatal incidents in the domestic food sector, Chinese consumers have developed a craze for overseas products, Niu Li, director of the Macroeconomic Research Office at the State Information Center, told the Global Times Monday.
For instance, in 2016 imports of soybeans and rice reached new record highs, growing 2.72 percent and 5.49 percent from a year earlier, respectively, to 83.9 million tons and 3.5 million tons, customs data showed.
Tang acknowledged the competition from low-priced overseas agricultural products in an interview with the People’s Daily. “While the output of grain keeps rising, imports and inventories are also growing,” said Tang, noting that grain imports last year reached 125 million tons.
In 2016, China’s grain output stood at about 616 million tons, down 0.8 percent year-on-year, ending a 12-year rising streak, official data showed. The slight drop is partly due to structural adjustments started a few years ago, the Xinhua News Agency reported on Monday.
The latest proposed supply-side structural reforms are different from previous reforms as they focus on the increase of high-quality grain production.
The supply-side structural reforms can facilitate modernized and large-scale farming, making it possible for the Chinese agricultural industry to meet increasing domestic demands for high-quality goods at low costs and “reducing reliance on overseas goods,” said Niu.
Grain glut can put a financial burden on the government, which usually stockpiles crops to support farmers’ incomes at artificially high prices, Ma Wenfeng, a senior analyst with Beijing-based market consultancy BOABC, told the Global Times Monday.
Raising farmers’ incomes is considered another priority. Tang said that the success of supply-side reforms depend on whether farmers can finally get rich.
Data from the National Bureau of Statistics showed that the per capita income of urban households was 2.72 times that of rural households in 2016, dropping from 2.73 times in 2015, as the central government promoted the integrated development of urban and rural areas.
The CPC Central Committee and the State Council issued 33 policy measures to support the reforms, including enhancing production efficiency by improving land circulation and contributing to the development of modern agriculture.
China has loosened rules to allow farmers to transfer their land to promote more efficient and large-scale farming.
According to the policy document, land is also being encouraged to be used for the development of rural tourism. This is a new policy that has not been mentioned in previous government documents, which will be an effective way for increasing farmers’ incomes, said Ma.
Ma also suggested that the government does not pay enough attention to the pension system for rural residents.
“Now farmers get much less pension in comparison with urban residents, so few can support their daily living if they become landless,” said Ma, calling for at least 500 billion to 600 billion yuan from the central government to fill the gap.
If the pension issue is not addressed quickly and soundly, farmers would not support the land circulation policy, which will not ensure the smooth implementation of supply-side reforms in the sector, he noted.