Premier Promises Farm Subsidies Will Protect Farmers

China's Premier Li Keqiang stopped the car and jumped out to inspect rice fields during an inspection tour of Jiangxi Province on August 22. Wading into the knee-high rice fields, Premier Li admired the uniform rice plants and surmised that the field must belong to a large-scale farmer. He peppered a farmer with detailed questions about his yield and the price he expects to get.

Premier Li interviews Farmer Mao, showing his concern about farmers who are likely to face plunging prices this fall. 

The stylized "leader-meets-peasants" theatrical play was pulled out of the communist party propaganda playbook to assure farmers that the party still cares about them, and will do something about plunging prices. Perhaps it also gave Premier Li something to do, since General Secretary Xi has taken control of nearly every responsibility in Beijing.

Farmer Mao Laohan explained that the nice-looking rice field belongs to his little brother's family. In response to Premier Li's query about how much he could sell his rice for, Farmer Mao said about 100 yuan per 50kg, which he described as "very cheap." Premier Li went on to ask whether the price at the local granary was the same as the market price (the answer was not reported in the article).

The reporter recalled that Premier Li had earlier this year answered a question on agricultural subsidies by promising that "the State's support for farmers will not decrease, and support for farmers will not decrease."

Premier Li went to a village that evening to learn the farmers' "real understanding of government policies." The Premier was not afraid to get his shoes wet as he went into the fields for his "special investigation." He asked farmers the price paid for grain purchased for government reserves, how they felt about the price, and whether they could cover their costs. Again, the answers were not reported. The Premier's questions were important; the answers were inconsequential.

Upon completing his interview, he assured the farmers, "Don't worry, the State will think of a way to preserve the enthusiasm of all people who plant grain."

As he returned to his car, Premier Li remarked to his coterie of accompanying officials, the next step must be to improve the grain distribution system and preserve the income of farmers.

No clues were given about what concrete measures might be considered. However, on the same day as Premier Li's inspection (what a coincidence!) Peoples Daily reported that the Ministry of Finance is ready to spend more money on subsidies to prevent farmers from losing money, this time citing promises by General Secretary Xi Jinping that the State will not fail to protect farmers from losses. The article lauded pilot programs for soybean and cotton target price subsidies, and promised that much larger subsidies would be given this year for these programs. The article also promised that a new subsidy for corn producers will be rolled out this year, and the government will budget 39.4 billion yuan ($6.1 billion) for intergovermental transfers to major grain-producing counties to ensure that farmers' incomes will increase.

Peoples Daily assured readers that agricultural subsidies are part of a national effort by the government to strengthen agriculture and benefit farmers.

It sounds like the leadership is making a pre-emptive move to assure farmers before fall crops come on the market and depress prices.