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Analysis of Rural Economic Situation and Outlook
2004-06-01
Xiao Junyan
Rural economic situation in 2003 presented the following outstanding characteristics: First of all, SARS epidemic seriously affected farmers’ income, farmers’ work in urban areas between April and June and the sales of farm products. The increase of farmers’ income went down in the first half of 2003 and up in the rest of the year. Farmers’ net income in the whole year was slightly up over 2002. Secondly, agricultural structure was adjusted continuously. Areas for grain crops shrank and grain output continued to decline. Grain safety again became a hotspot of the society. Areas for cotton and other cash crops expanded. Thirdly, the situation of farm products market turned better with the pickup of prices for farm products on the whole and sound export of farm products and grain. Fourthly, more favorable policies were implemented for agriculture. The central government promoted rural development by way of planning urban and rural development as a whole, continuously carrying out the reform of rural taxation and fees and grain distribution system, carrying out a number of key policies such as giving more investment for education, health care and infrastructure. It began to try out direct subsidy to farmers and the reform of rural credit cooperatives.
I. Basic Conditions of Rural Economy in 2003
1. Farm production
The added value of agriculture in 2003 was 1,724.7 billion yuan, up 2.5 percent over 2002 and accounting for 14.8 percent of the gross domestic product (GDP). The outstanding characteristics lied in the continuous adjustment of the farming structure. In comparison with 2002, the grain output totaled 430.67 million tons, down 5.8 percent. The grain areas in the whole year reduced 4.3 percent, out of which wheat areas down by 7.5 percent，maize areas down by 2.7 percent and paddy fields down by four percent as a result of low prices. Cotton areas went up 22 percent because the cotton consumption was up 20 percent over 2002. The cotton purchase prices had soared 30 percent since August 2002. However, the gross cotton output reached 4.87 million tons, down 0.9 percent, as a result of natural disasters. The areas for oil crops cut 3.2 percent because of the reduction of rapeseed in 2002. The shortage of raw materials for edible oil caused the prices of major varieties to rise over 20 percent by the end of 2003. The output of meat was 69.2 million tons, up five percent over 2002; that of eggs came to 25.35 million tons, up 3 percent；and that of dairy output reached 16.25 million tons, up 25 percent. The areas under sugar crops reduced 5.2 percent，and the output totaled 96.7 million tons, down six percent. This was because that the record expansion of sugar crop areas in 2002 had caused the output to surpass demand resulting in the drop of sugar prices by 40 percent. The output of aquatic products amounted to 47 million tons, up 2.8 percent. The areas for vegetable approached 270 million mu (one hectare equals 15 mu) and the gross output reached 540 million tons, up two percent.
2. Farmers’ income
Farmers’ net income in 2003 averaged 2,622 yuan per capita, up 4.3 percent after allowing for price rises year-on-year. Its increased structure had following characters:
(1) Household operational income picked up. The net income from production for rural households averaged 1,541 yuan per capita in the whole of 2003, up 3.6 percent year-on-year with an increase of 1.8 percentage points.
(2) Wage income became a main source for farmers’ income. The net income from production for farmers averaged 919 yuan per capita in the whole of 2003, up 9.4 percent year-on-year, and accounting for 54 percent of the added income. Of the wage income, income from non-agro-sector work was 514 yuan per capita, up 17.4 percent.
Although SARS epidemic caused seven to eight million farmers working in urban areas to return home, the rapid growth of the national economy in 2003 still paved the way for farmers to work outside. Statistics show that the number of farmers working outside amounted to 99 million in 2003, an increase of five million over 2002.
(3) Property income registered a big increase. The net income of property income averaged 66 yuan per capita, up 29 percent over 2002.
3. Prices on farm products market
Prices for farm products went up tangibly in 2003 after a six-year low-level fluctuation. Prices for farm products rose 4.4 percent. Included were cereal crops up 2.3 percent, cotton up 35.3 percent, oil crops up 19.4 percent and animal products up 1.8 percent. Of residential consumer prices, food prices went up 3.4 percent.
4. Rural banking
Rural credit cooperatives were burgeoning. By the end of November 2003, savings deposits of rural credit cooperatives nationwide totaled 2,359.4 billion yuan, an increase of 371.9 billion yuan, or up 18.7 percent, over the beginning of the year, and up 153.6 billion yuan year-on-year. The loan balance stood at 1,745.1 billion yuan, an increase of 351.36 billion yuan, or up 25.2 percent, over the beginning of the year, and 138.1 billion yuan more than in 2002. Included was agricultural loan balance valued at 735.8 billion yuan, up 177.9 billion yuan over the beginning of the year with the proportion in the agricultural loans of banking institutions rising from 81 percent in the beginning of the year to 84.5 percent.
5. Township enterprises
Township enterprises generated an added value of 3,660 billion yuan in 2003, up 13 percent year-on-year. Included was the industrial added value of 2,596 billion yuan, up 14 percent; business income of 14,600 billion yuan, up 12.6 percent; goods delivered for export totaling 1,387 billion yuan, up 20 percent; profits amounting to 855 billion yuan, up 13 percent; taxes reaching 270 billion yuan, up 15 percent; payment for employees coming to 900 billion yuan, up 5.5 percent; and the number of employees by the end of the year amounting to 135 million, up 2.12 million.
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