The Ministry of Agriculture is mulling the introduction of special measures
to help facilitate the implementation of a new law on rural cooperatives,
sources said yesterday.
The Ministry of Agriculture (MOA) is collaborating with other ministries to
arrange preferential financial and tax terms for the cooperatives, Zheng Wenkai,
a division director with the ministry said at a press conference yesterday.
"The ministry is also helping some leading cooperatives to get their products
onto the shelves of giant supermarket chains, so as to promote the brands,"
The Law on Farmer's Professional Cooperatives came into effect last Sunday.
It aims to unite China's millions of loosely scattered rural households and pave
the way for agricultural industrialization so they can compete under the WTO
The law is the latest "policy revolution" for China's vast rural area,
following the Household Contract Responsibility System initiated in 1978 and the
reduction of agriculture taxation last year, experts said.
"The cooperatives have become an important link between individual farmers
and the changing market which is vital if China is to modernize its agriculture
and build a new socialist countryside," Zheng said.
According to ministry figures, the 34.86 million members enrolled in the
country's more than 150,000 economic cooperatives now account for 13.8 percent
of all rural households. About 80 percent of the cooperatives will be eligible
to register with local business bureaux after the implementation of the new law
which set a low economic threshold on registration, Zhao Tieqiao, an official
with the MOA, said.
Prior to the introduction of the new law, farmers and cooperatives have been
hindered by a number of problems.
For example, most cooperatives founded by farmers previously didn't have
official legal status, so their rights on contracting, securing loans and
getting permission to expand operations were impaired.
Experts see the new law as a launch pad for China to gradually move toward
full competition on the world's agricultural market.
"It fits in with relevant WTO rules," Zheng said, adding that the
cooperatives will standardize agricultural production methods and expand
capacity to be able to accommodate market trends.
It will also help ensure product safety and lower production and sales costs,
"In the long term, cooperatives are the only effective way to build a modern
agriculture industry, develop international trade and break down trade
barriers," Zheng said.
But Liu Xiaoying, an expert in rural studies with the Development and
Research Center under the State Council, said the law had failed to make a
breakthrough in the reform of rural financing mechanisms, as it still rules out
the possibility of farmers establishing rural finance cooperatives.
Others have also said the law does not cover all the forms of farmers'
cooperative in existence, as it limits its categories to only professional
groups such as those specializing in buying, producing and selling.
Figures for 2005 showed economic cooperatives help boost members' annual
income by an average of 500 yuan ($65), 200 yuan more than the average income
rise for other farmers.
(China Daily 07/07/2007 page2)