Farmers across the nation will be freed from the burden of
agricultural tax within three years, two years ahead of the
schedule promised by Premier Wen Jiabao last month.
Speedier implementation is mainly thanks to the unanimous
support for the decision from both provincial and local
governments, say policy insiders.
Jiang Zhongyi, a senior researcher at the Ministry of
Agriculture said China's leaders are confident about the policy
adjustment, which is expected to substantially increase farmers'
incomes.
Jiang revealed that Chen Xiwen, deputy director of the Office of
Central Financial Work Leading Group told a recent closed-door
meeting of top officials that "farmers' agricultural tax is sure to
be cancelled within three years."
"This is good news for rural people, who currently earn an
average monthly income of about 200 yuan (US$24)," said Jiang.
Premier Wen's initial plan to axe the tax in five years,
announced at last month's second session of the 10th National
People's Congress, won wide public backing and has been the subject
of much media attention.
"The media has recently played a major role in changing the
attitudes of some provincial and local governments, who were
previously unwilling to scrap the tax," said Jiang, adding that
grass-roots governments could collect other fees using the excuse
of collecting the agricultural tax.
Statistics indicate that the agricultural tax raises just 30-40
billion yuan (US$3.6-4.8 billion) annually, around 5 per cent of
the government's financial income. But the local governments also
levy additional fees of around 100 billion yuan (US$12
billion).
Tan Qiucheng, a researcher at the Chinese Academy of Social
Sciences said scrapping the agricultural tax is a drastic measure
which will prevent the arbitrary collection of fees from rural
people.
"It is also a measure to put more money into farmers' pockets by
encouraging them to grow more grain and secure the country's grain
security," said Tan.
Increasing the income of China's 900 million farmers and grain
output is high on the government's agenda. This year, the central
government will earmark 10 billion yuan (US$1.21 billion) from its
grain risk fund to directly subsidize grain farmers, alleviating
falling output and slowing income growth.
But China's grain output dropped by 5.8 per cent from 2002,
reaching 430.65 million tons last year. The figure is expected to
rise to 455 million tons in 2004.
Despite the speedier removal of agricultural tax, Jiang Zhongyi
expressed concern that if the government structure is not
streamlined, the goal of easing rural people's burdens will not be
achieved.
Statistics show that in China, about 35 taxpayers support one
civil servant, and the ratio can be 20:1 in some western
provinces.
The bloated grass-roots bureaucracy, which requires further
spending, is always achieved using administrative means.
"This is the fundamental reason for the long-term difficulties
in terms of alleviating rural people's financial burdens," said
Jiang.
"Streamlining the administrative structure will become a bigger
challenge and even more urgent task."
(China Daily April 10, 2004)