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(II) On Interpreting the Three Agricultures
Second, on why farmers are so poor.
Farmers are poor because, while they can feed themselves, they have no money to spend. They have no money because they have no work. They have no work because, while there is plenty of work to be done in rural areas, no one is doing it. That, on the other hand, is because no one dares to do the work. The few that dared to do work, say, for example, a few managers of town and county level companies, all suffered horrible endings. The bureaucratic system is sapping the strength out of our rural economy.
Everyone knows that finding a job is difficult these days. The cause of this, however, is that creating a company is even harder. Let us again work with an example. Suppose that you boil good eggs, and wish to market them. See how many officials you will have to "manage". I once had my people make up a list of all the official requirements you had to meet en route to legally selling your boiled eggs. First, the public health department has two sets of requirements: your appearance, including clothing, health, equipment, etc; and also the chemical and biological sanitation of your products. After these, the department of industry and commerce, which needs you to have three licenses: a license to manufacture, another to sell, and a third for taxation purposes. Each license, furthermore, has numerous mini-requirements of its own: personal identification, proof of employment, a list of equipment, to list a few. There is also an inspection team that checks the quality of your products, your identifications, and your certificates from time to time. Occasionally, even if you meet all requirements, they still manage to find fault: when my company was selling massage machines in Shi Jia Zhuang, the department of industry and commerce ruled that the Da Wu company was forging the Da Wu product name in illegally selling Da Wu products. They fined us fifty thousand.
The department of technological supervision is even more powerful. They demand that you have a tag, a factory name, a factory address, a production date, and a weight on every product. Moreover, they don't even allow "famous Hebei products" to be labeled "high quality". My company's fodder, which is a "famous Hebei product" was fined because we labeled it "high quality". When we print the "famous product label", we have to go to a designated factory to print them. It only costs us one cent to print a label, but we have to spend five cents in that factory, else the label is illegal. Moreover, they come down to check our products whenever they feel like it, often six times a year. Many might consider this reasonable, but when consumers are perfectly able to check the qualities for themselves every time they buy our products, who needs all this inspection? The customer is the best moderator and supervisor of markets. If I had to speak the truth, these ministries are the real culprits behind all the low-quality markets on the market. Every company that sends them gifts and bribes enjoys their protection. They inform their "protected" beforehand whenever there is an official inspection, even if those companies produce low-quality stuff. The good companies, however, don't need to send bribes. My own company, which has been running for 18 years, has not sold a single bad product, simply because I fire the factory head whenever a customer comes to complain of quality. Do the ministries really do much in preventing quality problems? I don't think so.
Everyone knows that the hope for farmers lies in non-agricultural production. Still, it is extremely difficult to develop manufacturing and industry in rural areas. I always say that there are eight mountains on the farmer's back, and that the government needs to remove these burdens. To be more specific, what are rural banks and trusts doing with their money? My company has about 100 million in capital, but I've rarely gotten an official loan. At the beginning, I borrowed about 50 thousand from the government. Last year, when I wanted to borrow 500 thousand from a bank, they had to have the signatures of every member of the board of directors, and so the plan was scrapped. I want to make this situation clear now: good companies can't get loans from the government. How do the banks lend money? They have an interest rate of between 10% and 15%. When I wanted to start a grape plantation three years ago. The Bao Ding city government had already agreed to lend 6 million to me, but I haven't seen a single yuan yet. I think banks and trust funds, at the rural level, are financially oppressing the rural population.
What does the department of industry and commerce do? I began my company in 1985. Since then, the department has tried to limit my pork sales, my fodder sales, and even my grain sales. My pigs have died of heat in their stalls; my grain has been wasted in piles, unable to be sold. How can you prevent this from happening? You have to pay the corresponding bureau a fee, which has reached 600 thousand per year at its highest. This is what they mean by reform on the grain market. I really don't understand why they would prefer to have my grain and fodder rot at home rather than enter the market. What is the department of taxation doing? What do our tax laws mean? A tax law is a law to support government spending, which forces you to give them money. In broader terms, what are all the bureaus and local governments doing? Much of the time, they are hindering rural development and preventing farmers from working.
Our rural areas have a flush labor supply, but do not produce enough jobs for all the manpower. The essence of this problem is that official power and capital limit and exploit the farmer's right to work. Consequently, the most difficult problem of clearing the way for rural development is to prevent national interest from dissolving into the interest of lower units (bureaus), and to avoid legalizing the interest of these units (bureaus) by law. Currently, bureau officials use the laws for our local bureaus to severely limit rural development, and to tie the hands and feet of farmers. Take, for example, the Rural Land Management Laws put into effect on March 1 of this year. The seventeenth law rules that land must be used only for agricultural purposes. The thirty-third states that, however rural land is purchased and exchanged, the nature of its ownership and its agricultural purpose must not change. Obviously, when farmers take management responsibilities for a piece of land, they are obliged by these laws to devote it to "farming". My company occupies about 100 mu of houses and production plants, and has therefore been breaking the law for some time. I obtained the usage rights to these lands in 1985 and used them to raise pigs and poultry. Yet local officials demanded extra money from me time and time over, until finally the county chief came down to "inspect it" with some 30 cars carrying his accompanying personnel. He told me I was breaking the law. I answered: the Land Law was passed in 1987, and therefore has no power over my land. Moreover, it stated clearly that land could be used to raise pigs, chickens, to grow timber, and to breed fish. He then said that if he thought it was illegal, it was. I threw him out. Later on, a legal official from the Hebei Land bureau came down and brought up the same topic, only this time he brought a horde of reporters and cameramen with him. Of course, they tried to desecrate my image as much as possible. I asked him for legal documents and regulations. He replied: "fine, I'll write one up for you when I go back". Those were his exact words. Of course, none of this appeared on local television. By now, I don't even care if they blow my land up with dynamite. I simply refuse to budge under such pressure. After so many years, the officials don't harass me over this issue any more, so I suppose my land usage has become legal after all.
What does legal really mean in China? I know a chairman from one of our local companies and asked how he managed to make his land "legal". It turned out that, after negotiating with the farmers to use their land and promising them repayments, he had to compromise with village officials and promise them a share of the profits. Finally, he had to talk with Land Bureau officials and ask them to "confiscate the land as official property". This made sure that he would have to pay them each year too. Basically, after you pay off all parties involved, then your land becomes legal. I asked him who the land finally belonged to after all these negotiations. He replied: legally it belongs to the country; actually it belongs to the farmers, who demand annual payments from him. They say that they still "own" the land, and never agreed to give it to the country. This is what "legal" means in China. But to whom does the land belong? The question remains largely unanswered.
I still believe the original intent of the Land Law was to protect land. Everyone asks just how much land does China actually have. No one knows for sure. A few years ago the official statistic was 1.49 billion mu, now it's 2 billion mu, and 2 billion mu more of non-cultivated land. The officials keep stressing how land is in short supply. Yet, in Zhe Jiang, one of our wealthiest provinces, each person only has 0.4 mu on average. How can Japan be so rich and modern with so little land? Hong Kong, with its puny size, feeds and clothes some 6 million people. Do China's problems really originate from a lack of land? I don't think so.
Right now, in rural China, there are about eight "wide-brimmed hats" overseeing each "old straw-hat". If there were, on the reverse, eight "straw-hats" under each "wide-brimmed hat", the situation would be very different. Simply put, the problem lays within the making of law, not the enforcement of law. Almost each bureau has a set of laws regulating it, yet only farmers have no precise set of laws. Who protects farmers? Where are the law-enforcers for farmers? Our country's main problem is not the corruption of officials, but the corruption of the law system. Laws are made by the bureaus, which don't care whether their laws fit into our fundamental constitution, or whether their laws agree with the basic interests of our country. Therefore I say that national interest has dissolved into the interest of bureaus, while the interest of bureaus are actually protected by law! This is a remnant of the planned-economy days. The bureaucrats who make the laws are smart people, and make their laws quite waterproof logically. I have to admire their intelligence, but they don't see things the way common people see them. They protect the interest of their bureau and of the bureaucratic system only.
Last modified December 17, 2005
sundawu sun dawu,Peking University,China Agricultural University,2005
(III)(IV)On Interpreting the 'Three Agricultures'
(I) On Interpreting the 'Three Agricultures'
SUN Dawu孙大午: Philosopher
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