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Smoother fund distribution
2004-05-20
China Daily
More investment, a reduction of intermediate links, as well as fiscal allocation reform, are vital to the future of agriculture and farmers in rural China, according to an article in the Beijing-based Outlook Weekly magazine. An excerpt follows:
The State has attached great importance to problems in rural areas, agriculture and farmers. But it seems government initiatives are struggling to get through to the nation's vast rural areas so they can actually assist farmers.
There are a couple of reasons for the low efficiency of investment in agriculture.
First, the total input is still far from enough. Take 2001 for example, when the government only spent 165 billion yuan (US$19.88 billion), accounting for 8.7 per cent of that year's total fiscal expenditure.
It was way under the mark for infrastructure construction in the vast rural area, which has a population of 768 million.
Also, the investment is spread too thin. At the central level alone, there are nine ministries directly involved in distributing the funds.
Such management overcrowding lessens the effects of the spending and creates difficulties when it comes to accountability.
What's more, it takes longer for the resources to get where they are needed.
There are five levels of government in China. And within the same tier, there is another link for fiscal departments when allocating money to agricultural departments.
Also, some of the aid goes to agricultural-related enterprises and not the farmers directly.
Another problem is created by the number of Chinese institutions and people living off government revenue.
The nation's administrative cost is one of the highest in the world, with 45 million people to support. Spending on administrative management accounted for 18.6 per cent of the government's expenditure in 2001.
The local governments that struck financial difficulty after the tax distribution reforms of 1994 tend to hang on to a percentage of the agricultural funds that are meant for distribution.
The situation needs to change for the sake of the nation's agriculture sector and its rural farmers.
The central government will boost agricultural spending by 30 billion yuan (US$3.6 billion) this year. But more financial channels need to be tapped.
The investment situation needs to change so that agricultural backers do not lose so much money. Agricultural spending needs to be better managed with more direct routes to farmers and less intermediate costs.
Achievements and efficiency, instead of staff size, should be noted during government budget allocation.
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