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China's agricultural and rural policy is evolving rapidly. Strict
central planning and taxation of agriculture (1950s to 1970s) has
been replaced by reliance on markets and agricultural subsidies
in the 21st century. China has an ambitious and challenging set
of objectives. The government is using an array of subsidies, tax
cuts, and infrastructure spending policies to boost lagging rural
incomes, preserve social and political stability, encourage grain
production, improve food safety, prevent environmental degradation,
and increase agricultural productivity.
The following table provides
a brief overview of the main agricultural policy measures used by
the Chinese government. The measures are used by the national government
unless otherwise specified.
Summary of China's agricultural
policy measures |
Measure |
Description |
Direct subsidies |
Provide small payments to grain farmers based on
grain acreage; introduced in 2004. Subsidize purchase of
high-quality seeds and agricultural machinery. Payments to
compensate farmers for costs of fertilizer, fuel, and other
inputs. Subsidies for breeding sows and large-scale breeding
farms for hogs, dairy cattle, and poultry. |
Agricultural tax cuts |
Phased out taxes on farmers from 2004 to 2006. |
Procurement at "protection prices" |
Government procures set quantities of rice, wheat, corn,
soybeans, cotton, rapeseed, sugar, and rubber at a fixed
price to support market prices. |
Reserve management |
Central, provincial, and local governments maintain reserves
of grains, vegetable oils, cotton, and pork. Government intervenes
in markets by purchasing or selling reserves. |
Improved market infrastructure |
Establish and support wholesale markets, commodity exchanges,
and futures markets. Promote e-commerce and improve cold
storage and transportation facilities. |
Rural infrastructure investment |
Fund water-efficient irrigation, drinking water, electrification
projects, methane pits, a rural road network, antipoverty
efforts, and develop "production bases" for grain
or other commodities. |
Loans for farmers and agribusinesses |
Direct rural credit cooperatives and banks to extend more
loans to farm households. Give preferential bank loans to
selected agribusinesses that contract with farmers. |
Land protection |
Strictly enforce rules regarding conversion or sale of
cropland for nonagricultural use. |
Research |
Consolidate and increase funding for research institutes
developing crop and livestock varieties with improved quality
and yields. |
Food safety standards |
Establish and enforce standards for chemical residues and
other harmful substances in food. Establish animal disease
monitoring and control systems and safe livestock feed production.
Promote organic and "green" agriculture. |
More on China Agricultural Policy:
China's Market Stabilization
Measures
China's Policies Affecting Factors
of Production and Inputs
China's International Trade Policies
China's History of Agricultural
Policy
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