Government, Market, and Increasing Farmers' Income

Author: Yu Weiping
Publisher:
Publish Date: 2006-08-01
Features: This book begins with an introduction to the background of the research topic in the preface, followed by a literature review on domestic and international research trends related to the topic. It then further explains the theoretical significance of the topic in neoclassical economics, welfare economics, development economics, new institutional economics, and modern fiscal theory, as well as its practical guiding significance in addressing the "three rural issues" and coordinating urban-rural development. Finally, it briefly outlines the theoretical foundation, research methods, and basic approach of the paper.
Chapter 1, "The Theoretical Orientation for Increasing Farmers' Income," first argues for the quasi-public nature of agriculture by demonstrating that agricultural products have some characteristics of public goods and that agricultural production has significant positive externalities. It also introduces the specific application of public choice theory in agricultural production and farmers' income issues. Then, it explains the relationship between agricultural development and national economic development by highlighting the contributions of agriculture in terms of accumulation, growth, foreign exchange, and markets. Building on a detailed discussion of the current state and causes of China's urban-rural dual economic structure, it introduces Lewis's theory of urban-rural dual economic structure. Finally, it explains the crucial role of institutions in economic development by analyzing how institutions, as endogenous variables of economic development, promote economic growth. Based on the positive correlation between institutional performance and institutional ethics, it proposes that granting farmers national treatment is an inevitable choice for increasing farmers' income and solving the "three rural issues" in the spirit of institutional ethics.
Chapter 2, "An Empirical Analysis of Farmers' Income Status," first describes the overall situation of farmers' income, including the overall trend of income growth, structural characteristics of income, and cross-sectional comparisons of income levels. It points out the economic, social, and political effects of low farmers' income, such as impacting national economic operations, affecting farmers' consumption, constraining agricultural production, hindering the development of rural markets, undermining rural social stability, impeding the achievement of rural well-off goals, and weakening the Party's ruling position. It then further analyzes the policy and institutional reasons constraining the growth of farmers' income, primarily including irrational agricultural product price systems, flaws in rural fiscal policies, insufficient rural financial support, urban-rural divided systems, and unclear property rights in rural land systems. As for the economic and technological reasons, the author believes they mainly include unbalanced national economic operations, irrational rural industrial structures, low levels of agricultural technology, underdeveloped rural market systems, and the impact of joining the WTO on agriculture.
Chapter 3, "International Experiences of Government Policies to Increase Farmers' Income," introduces the policies implemented by developed countries such as the United States, the European Union, and Japan to raise farmers' income, as well as those by developing countries like South Korea and India. Based on this, it summarizes the main experiences of other countries in increasing farmers' income and provides policy insights for China.
Chapter 4, "Policy Recommendations for Increasing Farmers' Income (Part 1) – About the Government and Its Fiscal Policies," first elaborates on tax policies for increasing farmers' income, including abolishing agricultural taxes and reforming the current tax system, and proposes a general approach, tax category selection, and specific recommendations for establishing a unified urban-rural tax system. As for government factors and fiscal expenditure policies to increase farmers' income, it suggests measures such as strengthening rural infrastructure construction, establishing direct subsidy systems for farmers' income, improving rural social security systems, enhancing agricultural insurance systems, increasing support for rural science and technology, ensuring funding for rural compulsory education, and strengthening the construction of farmers' skill training systems. At the end of this chapter, it proposes recommendations for improving rural administrative and fiscal management systems: de-emphasizing township-level governments, abolishing township-level fiscal systems, establishing a county-township integrated fiscal expenditure framework, constructing a public finance model to prevent government overreach or neglect, and promoting comprehensive fiscal budget reforms to implement unified budgets. It also advocates for strengthening village self-governance and establishing a "democratic finance" framework.
Chapter 5, "Policy Recommendations for Increasing Farmers' Income (Part 2) – About Market-Oriented Institutional Arrangements," first explains the interactive relationship between the transfer of rural surplus labor and the increase in farmers' income. It argues that to promote the transfer of rural labor to the secondary and tertiary industries, the following measures should be adopted: vigorously developing small and medium-sized enterprises to absorb surplus rural labor, establishing unified urban-rural labor markets, and reforming urban-rural divided household registration management systems. It proposes that improving rural land transfer systems, realizing agricultural industrialization and marketization, and accelerating rural urbanization and urban-rural integration are important ways to increase farmers' income.