July 27, 2012

Chinese farmer income from subsidies sits at 4%

Farm subsidies account for below 4% of the revenue of farmers in China, whereas in the US they are at 40% of American farmer revenue, declared an expert on agricultural development.

Zhu Xinkai, professor at Renmin University of China, said at a seminar that the US has heavily funded its farmers with subsidies to support grain production, while China only supported its farmers with upwards of RMB100 billion (US$15.6 billion), averaging a little over RMB200 each, accounting for less than 4% of their revenue, according to the official website of The National People's Congress, China's legislature.

Zhu said China should provide farmers with more direct subsidies and policy support, otherwise grain production could see growth figures in the negatives.

Zhu said China also needs to offer farmers high quality and inexpensive social services, saying that current methods have focused on lowering cost of living for farmers, not so much increase their revenue.

"Grain farmers currently enjoy tax-breaks, free compulsory school tuition, and inexpensive medical treatment. Could they spend any less money growing grains? Should we expect them to somehow do it without money?" Zhu said. "Of course, the subsidy policy must still conform to relevant WTO regulations."