CHINA: India’s Farmer-Friendly Budget Inspirational

By IPS Correspondents Reprint | | Print |

Antoaneta Bezlova

BEIJING, Mar 3 2008 (IPS) - The unveiling of a populist budget by India on the weekend, which promises indebted farmers a big rise in social expenditure, has received accolades from a most unexpected audience – China’s land privatisation lobby.

Pledges in the budget to increase spending for health care and education and wipe out or reduce debts owed by some 40 million farmers have been hailed by China’s academics as an “inspirational example” for the world’s most populous country.

“The budget announcement of P.Chidambaram, the finance minister, shows determination on the Indian government’s part to allow peasants to share in the wealth created by the country’s rapid economic growth,” said an opinion piece published by Henan scholar Zhu Sipei in the Beijing News.

“The same is overdue for China’s peasantry, which has played the biggest role in China’s road to prosperity by sacrificing to feed and better the country’s modern cities.”

The booster comes as China’s advocates of private land ownership are preparing to present a motion to the annual session of the National People’s Congress (NPC) beginning Mar. 5 to reconsider its communist era dogma that the state should own the principal means of production.

A reform of land rights for the vast rural population is seen by them as a must for redressing the vast divide in living standards between China’s booming cities and its impoverished countryside.

“China’s current system of collective land ownership has such serious flaws that if left unsolved for much longer it could become a real threat for the country’s social stability,” reckons Yu Jianrong, rural expert with the Chinese Academy of Social Sciences.

“Under the system large numbers of poor peasants are with no jobs, no land and no social security. Sooner or later, these anomalies could lead to social upheaval.”

More than 50 years after a violent Maoist collectivisation persecuted big landowners and deprived peasants of their land rights, China’s 750 million rural residents still do not own the land they till.

Despite an on-and-off academic debate over the years of economic reform about who should own China’s most precious asset, land rights in the countryside remain in the hands of local officials who wield virtually unfettered power.

Farmers have land usage rights only over periods of time and have little or no recourse when local officials move to take it from them. Even for the limited time that peasants are allowed to use the land they are barred from borrowing against it to invest and expand agricultural production.

By decreeing that the land belongs to the ‘collective’ and not to individuals, policy planners have inadvertently permitted local officials who govern the land to benefit from it at the expense of ordinary farmers, says Chen Zhiwu, researcher on rural issues at Yale University.

“Public ownership of land in the countryside has become a breeding ground for corruption, waste and environmental degradation,” Chen told a panel on private land ownership organised by the liberal newspaper Southern Weekend.

As the income gap between peasants and urbanities has widened over the years of rapid market reforms, more than 200 million farmers have moved to the cities, seeking better livelihoods. For the rest though, life has become a battle to defend their land – often with violent means.

The Ministry of Labour and Social Security estimates some forty million farmers have lost their land in China over the last decade due to urbanisation. Across the country, farmland is often seized by corrupt local officials and developers without adequate compensation and then converted to either industrial or residential use at great profit.

Peasants have been driven to such desperation that in places they have challenged the authorities by retaking the land on their own.

Such is the case with 40,000 farmers in some 70 villages in the north-eastern province of Heilongjiang who last December declared they would reclaim land seized from them with no compensation by local officials for the development of South Korean investment project.

To quell the riot, the government had to dispatch several hundred heavily armed paramilitary police and anti-riot officers. The leader of the protest, Yu Changwu, was sent to a labour camp for two years on charges of “endangering state security”.

Media reports have claimed that in the first months of 2006, 17,000 cases of “massive rural incidents” (a state press jargon for protests involving violence) have taken place, involving 400,000 farmers, with land grievances as the top complaint.

In the eyes of policy makers, the issue of land ownership remains closely linked to the communist party’s long-term mandate to ensure food security for the country’s large population. China has long regarded self-sufficiency in grain as national security priority.

But academics that have called for land reforms repeatedly in the years past argue that the welfare of China’s 750 million peasants should not be made hostage to the country’s food security agenda.

“The psyche of the past decades when China had to store food in preparedness of wars and famines and had to be totally self-sufficient is still very strong,” says Chen Zhiwu. “But in the era of international trade this is nothing but obsolete thinking. It is unfair to make peasants bear the burden of China’s food security by tying them up to a land, which they can’t convert into capital”.

Beijing still vigilantly opposes large imports of grain. To promote self-sufficiency, the government has done away with a policy spanning two thousands years of collecting grain tax from the peasants and has pledged to provide farmers with more subsidised fertilisers and seeds.

But government efforts in improving the lot of China’s rural population are deemed insufficient. A 2000 World Health Organisation survey on government funding and fairness of distribution of health care ranked China at a low 191 among other countries. China invests only 10 per cent of its state funds on social welfare and this amount is almost entirely spent on the urban population.

“India’s decision to increase social spending is important for freeing up the potential of its rural people,” said the signed opinion piece in Beijing News. “This is another leaf China can take for its own rural management”.