On January 30th, the Chinese Communist Party released 2008's "Dossier No. 1", entitled, "Suggestions of the State Council for Reinforcing the Agricultural Base, Developing Agriculture, and Enhancing Farmers' Income. "

It is the fifth such priority dossier to deal exclusively with agricultural issues, and the tenth since the beginning of China's reform and opening up 30 began years ago.This year's contains eight sections and forty-three new policies, an unprecedented number of both. To break down more notable differences between this major policy statement and those of recent years, the EO interviewed Song Hongyuan, deputy director of the rural economy research center under the Ministry of Agriculture, who helped draft the document.

The dossiers are frequently refered to according to their chronological order. No. 1 dossiers usually attract the most public attention as it shows to a large extent the government's most pressing concern for that year.

One Continuous Line
The Economic Observer: Why choose the theme, "reinforcing agricultural infrastructure"?

Song Hongyuan: First, it's a response to the 17th National Congress of the Communist Party of China (CPC).

In December of 2007, the central agriculture working conference was held - the first such conference since the 17th Party Congress convened in October - and the document was the first of it's kind to pay attention to the "three agricultural problems" in 2008. With this backdrop, the document has to reflect the spirit of the Party.

Chairman Hu Jintao noted in his report to the Party Congress that agriculture should be reinforced, that China should continue along its unique road to modernizing agriculture, and that urban and rural development should be fully integrated. This new integrated pattern socio-economic development relies on industry-stimulated growth in agriculture and long-term mechanisms to allow the urban areas to develop rural ones along with them.

Second, the dossier is an important component of solving the challenges that today's agriculture and rural areas are confronted with. Since the 16th CPC National Congress, we have made some achievements in rural development, for example, both farmers' income and grain production rose for four consecutive years. But problems still remain, like the fluctuating supply and demand in agricultural products, rising prices, and the structural shortage of agro-products. These suggest agriculture is still weak, and remains the greatest danger to China's economic and social development, with infrastructure remaining the bottleneck of agriculture.

The EO: Is this dossier related to others of its kind in the past four years?

Song Hongyuan: It is. To some extent, this document is a continuation of earlier pushes in agriculture. The 2004 no. 1 dossier focused on increasing farmers' income, which is a core issue of "the three agricultural problems". The theme of the 2005 document was to boost agricultural production capability, because only with high production can farmers increase income.

In 2006, the theme shifted to developing a new countryside. This was because in the 11th five-year plan for national economic and social development, passed during the fifth session of the 16th CPC National Congress, the concept of developing a new countryside was mentioned. The following year's document focused on agricultural modernization. This year, attention has been shifted to infrastructure. In this way, the five documents are complementary to each other. They are based on the past, but also designed for the future. They came down in one continuous line.

Interpreting "Building Agriculture's Base"
The EO: The importance of agricultural infrastructure has been widely accepted. Is there any special purpose to mention it in the title of the document? How should we interpret the concept of "building the agricultural base"?

Song Hongyuan: It's essential to understand this concept if one hopes to thoroughly grasp the theme of the dossier. To my understanding, it can be viewed in three angles:

First, in order to strengthen the foundation of agriculture, we have to recognize its status; in order to deepen our recognition of agriculture's status, we must make guarantees over supply of agricultural products. Second, agricultural infrastructure, a basic support for agriculture, needs be enhanced. Third, this also includes an improved rural management system, a well-developed rural public service system, and better grassroots organizations.

The first interpretation stresses the relationship between agriculture and the national economy, while the second stresses what is between agriculture and infrastructure. The third emphasizes the all-round development of rural areas.

The EO: "Ensuring the basic supply of main agricultural products" is an independent chapter in the document, and also the second part of it. Such importance has never been attached to this issue before. Why this time?

Song Hongyuan: You can describe the recent supply of agricultural products in three ways: there's increasing pressure in maintaining sufficient agricultural products, balancing their different types, and improving their quality. Because of this, we bring out the issue as a significant part in the document.

In terms of demand, China's grain production per capita is decreasing. The urban population is rising, as is total consumption. As income increases and consumption is restructured, there's more demand for products transformed from grain. Also, with less agricultural products to import, the international market has become less reliable in adjusting to surpluses and shortages in the domestic market.

In terms of supply, there are also some influential factors. For example, the population is expanding, but farmland per capita is waning, with one third of the counties in China having less than 0.8 mu (1/15th of a hectare) farmland per capita, an alarming level United Nations standards. Meanwhile the productivity of farmland is also decreasing, two thirds of is at or below average. Another factor is water shortages. Nearly half of the country's farmland lacks effective irrigation.

Support for Agriculture: Measuring "More-ness"
The EO: Financial support for agriculture has always been a hotly anticipated part of every year's first dossier. What's worth noticing concerning financial support in this year's?

Song Hongyuan: According to this year's document, the government will "clearly provide funds to agriculture that exceed last years, clearly invest more money in rural fixed assets, clearly spend much more income from governmental land sales on rural construction than last year".

In comparing the past dossiers we can clearly see the increased emphasis in spending. The 2006 document uses the word "more", the 2007 document says "still more", and this year's says "clearly more". From their different wording, we can sense that the government is increasing its support for the "three agricultural problems".

On agriculture-supporting policies, the amount of subsidies has been increased and the beneficiaries have expanded. For example, agricultural machine-purchasing subsidies now cover all agricultural counties, and agricultural insurance is being piloted at more places. Grain producing counties will get more subsidies.

The EO: The document stresses the expense on rural infrastructure. What are the related policies?

Song Hongyuan: Small-sized farmland irrigation is the first priority of rural infrastructure development. Besides repeating earlier policies, the document suggests reform in the property rights systems of irrigation projects and that farmers share irrigation machines. There's also a new policy to give preferential treatment to irrigation power.

The document suggests repairing endangered reservoirs and finish repair work within three years. Another point is that income from land sales should be mainly spent on farmland clearing, re-cultivating disaster-hit land, and improving land quality.

It's clear that the countryside has become the focus of infrastructure construction and social development. For example, the tax on farming services has been abolished; farming tractors are free of road maintenance charges; and farming machines are free to operate in different districts. These are all notable preferential policies.

Improving Rural Livelihoods
The EO: Previous documents have all introduced measures improving people's livelihoods, in areas such as education and medical care. What do you think of this year's new measures regarding those two?

Song Hongyuan: Two things have been changed in rural compulsory education. First, all rural students now have free textbooks, while last year, only the poorest did. Second, boarding students whose families have economic difficulties now enjoy a subsidy of 200 yuan per month, twice last year's amount.

Seventy-five percent of the rural population had access to rural cooperative medical insurance last year. This year, everyone will have  benefits. Last year, government subsidies for this insurance was 40 yuan, and rural residents needed pay 10 yuan themselves, while this year, the two numbers grow to 80 yuan and 20 yuan respectively. Also, all poor rural households will enjoy "basic guarantees".

The EO: It's been a common hope for the government to intervene even more in rural public services. What can the government do? Does the document mention any policies?

Song Hongyuan: There is, such as one section about developing rural public transportation. Speaking of rural transportation, previous documents referred to merely roads. But this time, it's the entire public transport system, which means more than only roads, but also bus stops, and shuttles.

Besides road construction, both the central and local governments should increase investment in road management and maintenance. Also, a passenger transport network connecting rural and urban areas should be established.