Zhao Yang

Research Report No 58, 2001

In the latter half of the 1990s, the income growth of farmers faced an unprecedented difficult situation. The growth rate of farmers’ net income has, from 9% in 1996, dropped to 2.1% last year after four years’ decline. In the central and western regions and major gain producing areas, the farmers’ absolute income has declined. What is even worse, the farmers’ burden is still serious, especially in the central and western regions. "Increasing income and reducing burden" has become a hard addition and subtraction problem to solve in the rural work in recent years.

I. Farmers’ Burden is More and More Heavy.

In recent years, the central government has paid much attention to reducing farmers’ burden. Although the drastic rise of burden has been effectively curbed, the problem in general is very serious. Amid the call for reducing the burden, severe conflicts between local cadres and villagers have been reported in some places.2 What has led to the increasing burden to farmers and made it hard to reduce it for such a long time? We reviewed the research of domestic and foreign scholars and summarized their views into the following three aspects:

One of their views is that the increasingly heavy burden is a result of local cadres’ wicked practices. Compared with the eastern region where rural enterprises are developed, the villages in the central and western regions do not have other sources for income while having to fulfill the tasks from the state and support themselves. Local cadres then invented all sorts of names to grab the wealth. 1 This view echoed Du Zanqi’s2 research on the finance and taxation in northern China before liberation. They both regarded the rural cadres between the state and farmers as the key to the problem. The second view is relating to "the theory of income sources" mainly based on a regional comparison of incomes in the country. The central and western regions do not have developed rural enterprises as a major source of income like the eastern region. As the collective economy is declining, local cadres have to shift the expenses on to villagers.3 According to this view, on the one hand, the task assigned from the superior government is heavy. On the other hand, the grass-roots organizations find it hard to fulfill the task due to limited financial resources. Therefore, it is no use blaming local cadres, because in these cases,the increase of farmers’ burden is actually caused by the system.4 The third view is the most popular one in explaining the increasing burden of farmers. It believes that the main reason is that there are too many redundant officials at the county, township and village levels with low efficiency. The financial income can barely keep these officials fed, giving rise to the so-called "payroll budget." Difficulties on the part of the local governments. Therefore, the most important measure to reduce the burden is to trim the administrations and staff.

These views have pointed out part of the causes of the farmers’ burden, but not hit the vital part. First, much of the farmers’ burden is used in public affairs of the villages such as education and building road. Farmers’ burden cannot be simply understood as rampant collection by local cadres. It is estimated that farmers’ burden is about 140 billion yuan a year, including 114.3 billion yuan of taxes and fees, 8 billion yuan of cash payment in place of labor contribution and about 20 billion yuan of "indiscriminate charges, fines and levies". The view from the theory of "income sources" holds water from the regional comparison. The farmers in the areas where rural township enterprises and collective economy are developed have a lighter burden. But in the central and western regions, the farmers will shoulder much heavier burdens. This indicates that the increase of farmers’ income, especially the development of collective economy, is an important way to solve this problem. But in the 1990s, the township enterprises, even in the eastern region, are declining and being restructured. In a near and mid-term future, therefore, it is obviously impractical to reduce the farmers’ burden by rapidly increasing income from collective businesses. The view from "overstaff administration" has at least two problems. First, if we carefully analyze the burden structure, we will find that much of the township finance has been used in building roads, construction of farmland and school buildings, not in paying the salaries of officials. Second, some people simply believe that the government payroll budget is for the salaries of township cadres. But actually half or even higher proportion of the township expendituresare used to pay middle and primary schoolteachers. It is more so in the less-developed areas. When the rural education is still backward, this item of expensesare hard to be cut through "trimming administrative staff" if the problem with current education system and irrational allocation education resources is not solved.

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