Rural economy needs new impetus
Low returns from agriculture slowed growth of land transfers, report says
The country needs to deepen reforms in rural areas to bring fresh impetus to the rural economy, which has seen growth rates slow, experts said after the Chinese Academy of Social Sciences published a report on Friday on China’s rural development.
There has been a slowdown in farmers’ income growth with the increase of agricultural costs, the decrease of job opportunities for migrant workers and the slowdown in the growth rate of land rights transfers, which hinders economies of scale, according to the report.
Per capita disposable income for rural residents increased by 6.2 percent in 2016. The growth rate was down by three percentage points from 2014. Over the same period, the growth rate of per capita disposable income for urban residents decreased by only 1.2 percentage points, said the report.
It also said wages, farmland operations and property income cover 40.6 percent, 38.4 percent and 2.2 percent of rural residents’ per capita disposable income respectively.
In recent years, the rapid growth in agricultural costs has severely affected the competitiveness of China’s grain in the international market and the industry’s efficiency, said Professor Wei Houkai, lead author of the annual report.
In 2015, the average national cost of a hectare of rice, wheat or corn was 16,350 yuan ($2,410), more than double that in 2007, and the profit from some agricultural products, including corn, soybean and cotton, were negative, he said.
The low returns from agriculture has slowed the growth of land transfers since 2013. According to the report, rights for 31.4 million hectares of farmland were transferred from the owners to other operators in 2016, an increase of 1.8 percent year-on-year, far lower than the 4 percent growth experienced from 2012 to 2014.
The slowing growth of work opportunities for farmers in urban areas due to the sluggish economy and the reduced need for labor after industrial upgrading also affects farmers’ wages, he said.
Many previous reforms are short-term ones meant to handle immediate problems and lack forward-looking and overall strategic consideration and system planning, said the report.
Ye Xingqing, head of the Agricultural Economy Department of the Development Research Center of the State Council, said new impetus for rural development depends on government policy.
Scaling up agricultural operations has been made possible by the departure of many farmers to urban areas, however, many of those remaining are either too old or not knowledgeable enough, said Ye, adding that the government needs to draft preferential policies to keep well-educated young farmers in agriculture.