Zhou Yanmei, a farmer of Yanpeng Village, Xinfang Township of Jiangxi Province, is gathering in her late rice on September 26, 2004. (File photo)

"China's grain production takes an important turn for the better, with a fairly big increase in production, we can guarantee China's grain security," said Chinese President Hu Jintao about China's grain production at the 12th APEC Leaders' Conference held not long ago.

Hu's confidence comes from the land of China and from Chinese farmers. That's because when Hu was delivering the speech, farmers in far-off China were counting their banknotes, looking very happy. The latest statistics from the National Development and Reform Commission show that farmers' income from sales of grain in 2004 increased by more than 60 billion yuan.

Joy over increased income at year-end

In 2004, increase in grain production has become the brightest color in China's economic chart.: The sown area of grain has surpassed 1.5 billion mu (15 mu equals one hectare), putting an end to many years of declining situation; the output of summer grain increased 4.8 percent over last year, the yield of early rice rose 8.8 percent, increased production of autumn grain looked promising. Grain output for the whole year will exceed the pre-set target of 455 billion kg., the increase rate will be the largest in the last 10 years.

Simultaneously with increased grain production in 2004, the incomes of farmers, particularly grain growers, have increased dramatically, farmers' smiling faces have become the most moving expressions: In the first three quarters, per-capita income of farmers surged 11.4 percent, the fastest rate of increase since 1997; the growth rate of per-capita income of farmers was 4.4 percentage points higher than that of urbanites, the first such achievement since 1997.

Experts summed this up as the "three lowest"points: In 2003, the sown area of grain dropped to less than 1.5 billion mu, the lowest since the founding of New China in 1949; gross annual output of grain fell to 430.7 billion kg., the lowest in the past decade; per-capita share of grain came down to 334 kg., the lowest in the past 20 years.

Grain production started from the "three lowest"points in 2004, the starting-point the top level of central leaderships, the experts on the agricultural issue and hundreds of millions of Chinese farmers were faced with.

The price of grain contributed to increased income

The continually downward grain yield and growing grain demands helped boost a new round of dramatic grain price hike that began in October 2003. The over 30 percent rate of grain price hike is a lucrative factor for stimulating farmers' enthusiasm in grain growing, which would mean an opportunity for grain production in 2004.

As a result of the measures adopted by Chinese decision-makers to strictly "control" some industries with excessive investment as well as fixed asset investment that grew too fast, agriculture and grain production had gained unprecedented "strengthening", increase in grain production and farmers' income became the most important aspect in China's macro-control in 2004.

In the face of a new round of grain price hike, government macro-control departments did not sell reserved grain in big quantities to keep down prices as they did in the past, instead, on the premise of respecting the price law and giving due consideration to the bearing capacity of low-income city residents, the Chinese government left a definite up-going room for grain price, the uplifted grain price became an important factor for farmers to keep their minds on growing grain.

Policy adopted to ensure increased income

Jacked-up grain price enables farmers to see hope of increased income, while the policy measures adopted in succession by the government make hope turn into reality step by step.

Early in the year, the unprecedented "Central Document No.1" with promoting farmers' increased income as the theme was published. This was followed by the release of a series of more direct, more forceful and more determined measures for agriculture, of which subsidies directly to grain, to improved variety of crops and to farm machinery and the reduction and finally complete exemption (within five years) of agricultural tax are most welcomed by farmers, at the same time, agricultural special product tax, with the exception of tobacco, is abolished.

The release of thee measures make Wen Tiejun, president of the Agriculture and Rural Development School under the Renmin University of China, very excited, he exclaimed, "It's very timely, very timely, the agricultural policy much talked about previously by the people is released this year, it is very timely."

This year agricultural input is 150 billion yuan as set in the central finance budget, an increase of 30 billion yuan over last year. Government subsidy issued to grain exceeded 10 billion yuan, which directly benefits nearly 600 million farmers. According to Han Jun, head of the Rural Economic Institute of the Development Research Center under the State Council, such an aid-agriculture effort by the central finance department was unprecedented for many years in the past. The forceful measures, such as the policy on the lowest rice purchase price and the effective control on the prices of chemical fertilizers and other agricultural materials have further guaranteed that farmers are really benefited from the raised grain price.

What the farmers are concerned with is precisely what the Zhongnanhai (the Party and government headquarters) is most concerned about. Chinese state leaders personally go to the fields to supervise and urge implementation of these policies. When they went on an inspection tour to the countryside, President Hu Jintao and Premier Wen Jiabao asked farmers: Do you know the state policies, have you got subsidies?

In 2004, signs indicate that farmers have become the biggest beneficiaries of the macro-control policy.

Thinking of increased income after increased income

Gratifying achievements gained for China's grain production in 2004 in the race starting from the "three lowest" points. At an executive meeting of the State Council held in late November, Premier Wen Jiabao once again reminded the attendants that the situation of China's weak agricultural foundation has not changed, strengthening agriculture remains the primary task of the entire economic work next year.

Like the Premier, experts did not have a light heart when they talked about next year. Chen Xiwen, deputy director of the Office of the Central Finance and Economic Leading Group, who has long been engaged in grain production research and policy consulting work, pointed out that increased grain production this year is only a restorative growth, and the sown area picked up only tens of millions of mu. Viewed from the development of grain demands, a restorative growth alone cannot solve long-term problems.

After the rise of grain price this time, how long can the price remain at a high place? Will it remain at the high place for only two to three years? Wen Tiejun says, "implementation of the measures of 'three subsidies and one reduction' is only a beginning."

Subsidy, tax reduction or exemption and grain price - these key words will still be the topics of most concern to Chinese farmers in 2005. The Central Economic Conference closed on December 5 stressed that the efforts of various aid-agriculture measures next year can only be increased, not weakened; policies that have been put into practice cannot be changed, benefits that have been given to farmers cannot be reduced, efforts in support of agriculture still need to be gradually increased along with enhancement of the country's financial and material resources.

Increased incomes for Chinese farmers in 2004 are only a beginning.

The above article was carried on the front page of People's Daily (Overseas Edition) December 13, 2004 and translated by People's Daily Online