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," Zheng said.
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 framework.
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, he said.
"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 (US$65), 200 yuan
more than the average income rise for other farmers.
(China Daily July 7, 2007)