“Study on the Methods of Strengthening Agricultural Support in Institutional Innovation and Policy Adjustment” won the “Ten Major Think Tank Achievements Award of Hubei Higher Education Institutions”

2017-03-09Translators:Wang LifangEditor:Zhu Yong

(Reporter Liu Jinming) Recently, the Hubei Provincial Department of Education issued a notice (Hubei Education Letter [2016] No. 34), announcing the winner of “Excellent Research Achievements for Policy Advisory Services Made by the Think Tank of the Higher Education Institutions of Hubei Province”. The research achievement for policy advisory services “Study on the Methods of System Innovation and Policy Adjustment of Strengthening the Support for Agriculture”, made by the team from the School of Business Administration of ZUEL led by Prof. Chen Chibo, was selected as one of the Top Ten Excellent Research Achievements for Policy Advisory Services Made by the Think Tank of the Higher Education Institutions of Hubei Province

Second-grade professor and doctoral supervisor Chen Chibo is the director of Hubei Masters’ Studio, the expert with outstanding contributions in Hubei Province, the head of Young and Middle-aged Team of Science and Technology Innovation in Colleges and Universities of Hubei Province and the chief expert of National Social Science Fund Program who enjoys government’s special allowances. Since 1980s, he has devoted himself to the study of Issues of Agriculture, Farmer and Rural Areas. Over the years, he published more than 160 papers on many journals such as Economic Research, Chinese Soft Science and Agricultural Economic Issues. He also published 18 monographs and teaching materials, such as Theory of Development of  Market Economy in Rural Areas in China and Agricultural Economics. Professor Chen has been in charge of more than 30 national and provincial research projects such as Key Programs of National Social Science Fund, National Natural Science Fund Program, National Soft Science Research Program, Humanities and Social Sciences Planning Program of the Ministry of Education, China Postdoctoral Science Foundation Program and Hubei Province Social Science Fund Program. Moreover, he has won 15 provincial and ministerial prizes, including the “Excellent Achievement Award on Social Science of Hubei Province”, “Hubei Science and Technology Progress Award”, “Award of the Development Research of Hubei Province”, “Teaching Achievements Award of the Higher Education Institutions in Hubei Province”, and “Outstanding Achievements Award of National Development and Reform Commission”.

Attributed to the team led by Prof. Chen Chibo, the awarded achievement was made from the major project “Study on the System Innovation and Policy Adjustment of Strengthening the Agricultural Support”, which was sponsored by National Social Science Fund 08&ZD022. The program was established in March 2009 and ended in September 2013. According to the research plan, the research group organized 5 large-scale surveys in field, completed more than 10 research reports, published 25 papers and 2 monographs on periodicals like Economic Research, Chinese Soft Science and Public Finance Research. supported by the achievements of this program, the team led by Prof Chen Chibo was awarded as the “Excellent Team of Scientific and Technical Innovation of Middle and Young-aged Members of the Higher Education Institutions in Hubei” for their research of “Construction of the System and Evaluation of Efficiency of Modern Agricultural Support.”

The research, oriented with targeted support subject, builds a framework of agricultural support system and policy analysis in the logic order of the review of the status quo, the reflection of the issues, the reconstruction of the system, the coordination of the policies and the design of the mechanism. The main contents include: a. Systematic analysis of China agricultural support situation, measurement of modern agricultural support demands and clarification of the goals of modern agriculture support; b. Study on the impacts of the scale, the structure, the orientation, the mode of agricultural support on the development of modern agriculture; c. Institutional innovation and policy design on agricultural input support system, agricultural subsidy system, support system of the prices of agricultural products and agro-ecological subsidy support system based on the goals of agricultural support; d. Construction of the incentive mechanism, policy coordination mechanism, performance evaluation mechanism and implementation supervision mechanism of agricultural support. This research is of theoretical and practical value for enriching agricultural support and agricultural development theory, innovating agricultural support system and improving agricultural support efficiency.

The achievement was submitted to the State Council, the Office of Countryside Comprehensive Reform of the State Council, the Ministry of Finance, the People's Government of Hubei Province, the Hubei Provincial Finance Office (Agriculture Office), etc. Subsequently, it was highly valued by the state leaders and the local party and government officials. It received comments and instructions from Comrade Hui Liangyu, the then Vice-premiers of the State Council, Du Ying and Mu Hong, the deputy directors of the National Development and Reform Commission, Li Chunming, Party Secretary of Hubei Provincial People's Congress, Zhang Changer, the then Deputy Secretary of Hubei provincial Party committee, and Zhao Bin, the then Vice Governor of Hubei province. The achievement was adopted partially by Comprehensive Rural Reform Office of the State Council and Agriculture Department of the Ministry of Finance, Hubei Provincial Finance Office (Agriculture Office). The program, serving as a think tank, played an important role in the government decision-making and local economic development.

1. Five Research Focuses

a. Construction of the system of agricultural support goals. The research established the analysis framework of agricultural support system and policies by the trace of the evolution of theory and practice of Chinese agriculture support and comparsion of the world agricultural support modes. According to the induced innovation theory, the research re-identified the agricultural support goals by analyzing many factors such as agricultural resources, agricultural technology and agricultural cultural characteristics to build the modern system of agricultural support goals.

b. Innovation of the agricultural support system. The research designed the system and policies of agricultural input system, agricultural subsidy system, food-prices support system and agro-ecological subsidy system based on the goals of agricultural support. The scale, structure, direction and focus of agricultural support can be dynamically optimized because of the changes happened in agricultural support such as the demands of its scale, structure and areas.

c. Evaluation of the agricultural support polices. The research conducted evaluation on agricultural support policies from investing orientation, innovation contribution and development contribution. In addition, it discussed the impacts of the transformation from “industry nurturing agriculture” to “Industry re-feeding agriculture and utilized CGE model to analyze the effects of modern agricultural production support policies.

d. Design of the operating security mechanism of agricultural support system. The research designed the overall operating security mechanism of agricultural support system concerning many factors such as policy coordination mechanism, implementation and supervision mechanism, performance evaluation mechanism and the targets incentive mechanism of the agricultural support.

e. Strategies of improving the agricultural support efficiency. Based on the survey data from 2000 farmers and 104 villages in seven provinces and autonomous regions, the research carried out in-depth analysis on the implementation situation and problems of rural infrastructure construction support, awards and subsidies in village public welfare, agricultural subsidies, policy-supported agricultural insurance and financial policies for agriculture support. After that, the research put forward policies and suggestions to improve the agricultural support system and the efficiency of agricultural support.

2. Five Core Ideas

a. Agricultural support aims at increasing agricultural products’ competitiveness and farmers' income, as well as achieving steady agricultural production and agricultural sustainable development. With the development of national economy, agricultural productivity has been improved and the agricultural resources and agricultural products supply-demand relation have been changed, too. At the same time, the government goals of agricultural support have been adjusted and optimized, representing a diversified trend. The research proposed that the Chinese goal system of agricultural system should contain the above goals based on the Chinese characteristics of agricultural resources, technology and culture during the transition period and the evolution of the goals of agricultural support after the foundation of new China.

b. Framework of agricultural support system consists of financial input system, agricultural subsidy support system, food-price support system and agro-ecological subsidy support system. By learning from the experience of the developed countries’ agriculture support policies, the research reckoned that we should build a framework including the above aspects. The research showed that limited resources and capital, as well as opportunity cost became the constraints of resource, budget and participation for agricultural producers. Decisions made by agricultural producers under this situation should be intervened reasonably by the government in accordance with its goals and the decisions made by the agricultural producers. Moreover, the decisive factor of agricultural producers' behavior is the comparative advantage of agriculture. Therefore, the government should establish or adjust the agricultural support system according to the influence on comparative advantage of agriculture.

c. The realistic problems of agricultural input lie in misconceptions, policy omissions, execution deviation and supervision failure. Although the country has increased agricultural input, the reality of government input in agriculture is still not optimistic. It is mainly because of the misconceptions, policy omissions, execution deviation and supervision failure of government's agricultural input. This shows that only increasing input is not enough. Definitely, increasing input is the premise which demonstrates the decision maker's resolution. But it cannot guarantee the capital input does strengthen agriculture, benefit farmers and enrich peasants.

d. Challenges faced by the agricultural subsidy policies are high implementation cost, diminishing policy effect and alienation of policy intention. First, planting area is difficult to examine. At the same time, fraudulent acts and irregularities of getting subsidies happened repeatedly. Second, due to overlapping management and lack of coordination mechanism, subsidy system has been faced with implementation difficulties including high implementation cost and low implementation efficiency. Third, government subsidy standard is relatively low and compensation for farmers' production costs is limited. Therefore, the low subsidy standard and limited compensation for farmers caused inefficient incentive allowance, decreasing policy effect. Finally, the relevant agencies sent subsidies without tracking the use of the money. Thus, some farmers use the subsidies for other purposes. The original intention of subsidy policy is alienated in the process.

e. The construction of agro-ecological subsidy mechanism consists of the subject, the object, the mode and the standard of the ecological subsidy. As an important part of agricultural support system, the agricultural ecological subsidy mechanism must have clear subject and object and scientifically determine the mode and standard of ecological subsidy. At present, we have established an agro-ecological subsidy mechanism with superior governments or the national government as subject, and regional and grass-roots governments as object. By issuing agricultural subsidies, taking rural policies and training modern farmers, we strive to ensure national agricultural products’ safety, resource safety, ecological safety and harmonious development of rural economy and society.

3. Five Policy Suggestions

a. To strengthen agriculture input. We must give full play to the financial funds and gradually form a steady growth mechanism of agricultural input and an agricultural input system. We should regulate governments’ function and ensure the direction and focus of financial input in agriculture. We should establish a coordination mechanism of agricultural input and improve the utilization efficiency of financial funds.

b. To improve agricultural subsidy policies. We must clarified that the policy goal of agricultural subsidies is developing agricultural production rather than increasing farmers' income. We should optimize the structure of agricultural subsidies and give priority to allocate the special subsidies for production. More over, we should expand the scope of agricultural subsidies, focus on food safety and ecological safety and adjust the targets of agricultural subsidies. New subsidies should be given to big specialized households, family farms, farmers' cooperatives and other new production and operation subjects.

c. To optimize policies for food-rice support. We should reinforce domestic foundation to ensure steady grain production, adjust the structure of grain import and export to actively participate in international trade, keep reasonable price of grain protection to improve the protection system and strengthen the dynamic regulation of grain supply and demand to improve the intervention policies.

d. To build a legal system of agro-ecological subsidy. For central authorities, they should perfect the legislation in terms of the development and management of agro-ecological resources, protection of agro-ecology, improvement of agro-ecological system’s service function, the input of subsidy funds and subsidy policies. For local governments, they should make local policies combining the national policies and the local situation so as to enact local agricultural and ecological compensation and specify the subject, object and mode of agro-ecological subsidy as soon as possible.

e. To perfect the operating security mechanism of agricultural support system. In order to solve the interest conflicts brought by fragmentation between administrative system and financial system and overlapping responsibility of governments at all levels, we need to perfect the political coordination mechanism so as to achieve integrated and coordinated support policies. To avoid the governments at different levels forming a multilevel principal-agent relationship and policy executors violating policies and ethics in the implementation process of agricultural support policies, we should improve the implementation supervision mechanism to ensure efficient operation of agricultural support policies. We should improve the performance evaluation mechanism so as to find loopholes of the support policies, thus adjusting the support policies dynamically and improving the enforcement efficiency of agricultural support polices. We should perfect the subject incentive mechanism, which means that we should adopt financial incentives and administrative incentives according to the evaluation results so as to encourage the relevant subjects to increase agricultural support.