Research On The Reform Of Agricultural Subsidy System

Agriculture is an important guarantee for promoting economic development and maintaining social stability. So although farmers engaged in agricultural production can increase their income, farmer’s individual income is much less than social benefits, individual cost is greater than social costs, such positive externality generates the demand of incentive. As a form of incentive function of economic law, agricultural subsidies give farmers direct financial support or other benefits through financial transfer payment, improve farmers’ enthusiasm for growing grain, guarantee food security and balance urban and rural development. From 2004 to 2016, the annual Document NO.1 of the central government draft a series of agricultural subsidy arrangements. There are some differences among the regional agricultural subsidies and annual agricultural subsidies. So agricultural subsidies are regional, short-term policies, they are also policies made by the Central Committee of the CPC, the State Council and local people’s government at different levels. Policies are soft law, the theory of “soft law is also law” has reached a consensus in the academic community, which provides the necessity and feasibility for us to study agricultural subsidy from a legal point of view.In addition to the introduction and conclusion, this article concludes four parts which are the origin, present situation, problems and solutions of agricultural subsidy.The first part describes the internal demand and history of agricultural subsidy. To solve the problem of externality of agricultural production, agricultural subsidy can incentivize farmers who are “economic man” engaged in agricultural production actively, guarantee national food security, increase farmers’ income and balance urban and rural development. Before 2004, we use the way of indirect subsidy, government provides more subsidies in purchase and marketing price differentials of grain enterprises, farmers benefit indirectly in circulation. The indirect subsidies have many disadvantages. First, grain enterprises will produce dependence and be lack of momentum. Second, the conduction chain is too long, which will bring government pay much but farmers benefit little. Last, true market supply and demand can not be responded, which will distort agricultural trade and agricultural production. As a result, we choose the way of direct subsidy.The second part induces the type and standard, bases and issuance program of existing subsidies. There are seven types of subsidy which related to grain production directly. The standard of subsidy which means how much subsidy per acre can obtain, is decided by the provincial government. The constitutor of subsidy bases is Central Committee of the CPC and local people’s government at different levels. The Ministry of Finance and Agriculture draws up annual program for some subsidies. On the basis of this program, the provincial government draws up annual program for some subsidies. So these programs are typical regional and short-term policies. To receive agricultural subsidies, farmers need to declare their grain area and the amount of subsidy to village committee. After auditing and publicizing, village committee reports to the township, county and provincial government to auditing. Then provincial government declare subsidies to the State Council. At last, subsidies issue to farmers.The third part describes the current situation based on analysis of existing problems. Because there is no guidance of general planning, regional programs and annual programs of agricultural subsidy are lack of coordination, a effective system has not been set up. Under the way of receiving subsidies according to the actual acreage, governments need to verify grain area. These costs are too high, a large number of subsidies are washed away in administrative costs. The GSP subsidies give all farmers same subsidies, which is unable to guide farmers to pay attention to ecological benefits and improving the quality of agricultural products. The Information Network of agricultural subsidy has not been established, in addition, the implementation of subsidy is lack of effective supervision, these factors result in intercepting, embezzling and defrauding subsidies can not be restrained effectively. Managements of agricultural subsidy divide the work confusedly, some of the functions overlap, also, funds of subsidy adopt the way of block management. This mode needs good coordination among the various departments, but in practice, each department is fragmented. As a result, different departments constitute different policies, which affect the efficiency of subsidies seriously.The fourth part suggest how to reform based on the problems of agricultural subsidies. The Ministry of Agriculture should be a leading department of agricultural subsidy, the department of development and planning under The Ministry of Agriculture should constitute subsidy program every five years, coordinating with national five-year development plan. In addition, we can introduce the EU Agricultural Policy Evaluation Mechanism, multi-subjects participate in hearing and assessing. Through these ways, we can constitute scientific subsidy program in line with national conditions. Then we should constitute annual subsidy programs each year, which can ensure not only long-term planning, but also short-term arrangements. Also, we should adjust the structure of subsidy and develop eco-friendly agriculture. Drawing on American experience in organic agriculture, increase support in agricultural high technology. Learning from the EU “cross-compliance” standard, reform the way of receiving subsidies. Achieving agricultural product quality and environmental standards is a prerequisite for receiving subsidies, farmers who don’t achieve the quality will not receive subsidy. Guiding farmers to pay attention to ecological benefits and striving to improve the quality of agricultural products by this way. On this basis, increase subsidies to farmers who reach a certain scale of large grain, which can encourage the development of scale operation. In general, the current agricultural subsidy is a GSP subsidy. This transfusional subsidy can not really allow farmers to get rich. Only by transforming to hemopoiesic subsidy, guiding farmers to pay attention to ecological protection and using high technology to improve the competitiveness of agricultural products, the growth of farmers’ income and the development of rural economic and modern agriculture will be achieved.