December 27, 2011

China increases agriculture spending

In order to reduce the difference in wealth distribution and urban-rural development, China's central government is stepping up fiscal spending on the development of agriculture and rural regions and on the improvement of farmers' livelihoods.

Xie Xuren, Minister of Finance, said on Dec 25 that fiscal spending from the central government for agriculture-related projects and farmers are likely to top RMB1.04 trillion (US$164 billion) this year, which is a 21.3% increase compared to the figure in 2010.

To boost agricultural development, the fiscal expenditures have served the construction of more water-related facilities at farmlands and consolidation of small reservoirs.

The central government has also urged financial institutions to increase lending to agriculture-related businesses through incentive policies, Mr Xie said at a national finance work conference held on Dec 25 in Beijing.

Local governments' finance departments have implemented subsidy programs for farmers who raise live pigs and sought measures to raise farmers' income such as hiking minimum purchase prices for wheat and rice.

Meanwhile, around RMB227 billion (US$36 billion) of funds have been used to help impoverished farmers in the rural regions.

In a major move to speed up poverty-relief efforts, the country announced in November a new standard for defining poverty by raising the poverty threshold to RMB2,300 (US$364) in terms of the annual net income of farmers, up over 80% from the RMB1,274 (US$202) standard in 2010.

The sharp increase brings China's poverty line closer to the international standard of US$1.25 a day, the standard that was established by the World Bank in 2008.