Government Fee Spike Strikes Farmers

Published: 2008-07-16

Cover story, issue no.376, July 14, 2008
Translated by Ren Yujie
Original article:

A recent study found that in 2007, Chinese farmers shouldered higher administrative fees for the first time since the agricultural tax was abolished some five years ago, prompting worries that rising costs would further discouraged farming activities.

Officials from the Ministry of Agriculture (MOA) claimed reasons for the increased expenditures were resulted from various additional fees imposed by local governments, especially for housing and education in rural areas.

The National Development and Reform Commission (NDRC) and the Ministry of Finance (MOF) had recently demanded local authorities to
carry out a thorough review of fees affecting farmers and hand in the reports by September this year.

First-Time Rebound
A working group under the State Council performs routine investigation into "farmers' burdens" annually. The term refers to government administered costs, including taxes, administrative fees and penalties, community collections, and service charges.

The latest inspection was carried out in November last year, preforming random spotchecks in four provinces - Jiangsu, Anhui, Guangxi, and Sichuan - and 140 villages, involving 500 farming families and 20 schools in 27 counties.

The findings revealed that the national average Chinese farmers' per capital burden was about 300 yuan, which accounted for 20 percent of their income. The farmers' burden had been on the decline since 2003 after the abolishement of the agricultural tax, yet, but those costs rebounded last year.

Some officials, however, claimed that despite the rebound, the costs were still much lower than before the agriculture tax was canceled. In addition, they said, as the development of tertiary industry in rural areas picked up, farmers too spent more. For instance, more farmers bought motorcycles and cars, took part in transportation and service industry, and thus related administrative fees had increased accordingly.

Inspection teams found that local authorties continued to impose unreasonable charges despite the government's recent effort in eradicating such practices through various regulations.

For instance, three counties in Guangxi extended home construction fees from cities to rural areas. Besides this, some local authorities charg
ed additional fees for approving house construction plans, supplementary fees for education, termite prevention fees and so on that totaled 8,500 yuan. The department of land resources in Anhui province demanded 3,000 yuan for each house constructed in newly planned villages, and s
ome villages in Jiangsu province imposed 5,000 yuan as family planning fees.

Additional education fees in rural areas were also adding to the farmers' burden. Under Chinese regulations, schools could only charge fees on excercise books and accommodation during the nine-year compulsory education phase. However, rural middle schools in Jiangsu province demanded examination paper fees, drinking water fees, water and electricity fees, insurance premiums and so on.

The Forces Pushing Up Costs
In fact, in order to lighten farmers' burden, various local governments had in recently years extended and increased subsidies to farmers. School fees and book fees in rural areas were waived, coverage of the new rural cooperative medical treatment system was expanded, and the minimum living standard guarantee system was activated.

Grassroots officers started to assume that farmers were under "zero burden". One member in the inspection teams suggested that such a mentality prompted some local authorties to impose various charges for their services.

Some parents of school-age children complained that additional charges imposed by business-minded schools were in fact more than the fees waived under the compulsory education system. For example, Si Lian Middle School in Qincheng County, Guangxi province, privatised its canteen operation at a yearly contract fee of 136,000, with the money supplementing school equipment purchases and teachers' welfare. However, the canteen operator charged higher prices to recover investment, which added to parents' burden.

A source from the agricultural department of Guangxi province said the rational farmers' burden in the province should be 17.25 yuan per capital each year, which accounted for one percent in farmers' per capital income.

However, the source stressed that the rational benchmark excluded social burdens, or those that resulted from tertiary industry development and administrative penalty. Thus, after taking into consideration the other costs, the source added, a farmer in Guangxi would bear a burden equivalent to 10 percent of his income at some 100 yuan, which was 160 yuan less than national average.

Some local officials said farmers in some areas earned no more than 100 yuan from each mu (1/15 hectare) of cropland, thus the increase in farmers' burden would hurt their motivations for farming.

A source at the MOA said the State Council paid high attention to the findings, and urged related regulators and local authorities to curb the upwards curve of farmers' burden.

The NDRC and the MOF released a notice demandig local authorities to review administrative charges and set a stardard for charges of water and electricty, education, and housing in rural areas. In addition, 10 agricultural-related fees were cancelled.

The notice also emphasized the voluntary principle of providing commercial services to the public, and forbade local authorities from charging farmers unreasonable fees in the name of constructing and developing new rural areas.