Ministry of Finance – Notice on the Comprehensive Implementation of the Reform of the Three Agricultural Subsidies

On April 25, 2016, the Ministry of Finance issued the “Notice on Fully Implementing the Reform of the Three Agricultural Subsidies.” The notice stipulated that, starting in 2016, the reform would be rolled out nationwide, consolidating the three agricultural subsidies into a single agricultural support and protection subsidy. The policy’s objectives were adjusted to support farmland fertility conservation and the development of moderately scaled grain production.

Strengthen the protection of arable land fertility. Subsidy funds earmarked for this purpose shall, in principle, be allocated to farmers who hold contracted rights to cultivate such land. The basis for calculating subsidies may include the area of land under the second-round contract, the tax-assessed cultivated area, the area certified under property‑rights registration, or the area sown to grain—among other options. The specific type or combination of areas used shall be determined by the provincial people’s government in light of local conditions. Subsidy rates shall be comprehensively calculated and set by local authorities, taking into account the total amount of available subsidy funds and the chosen calculation basis. No subsidies shall be granted for land that has already been converted to uses such as livestock farms, forestland, large contiguous grain fields repurposed for facility‑based agriculture, or non‑agricultural land subject to expropriation or occupation; nor for land that has lain fallow for extended periods, or for areas designated under the “compensation” component of the farmland balance mechanism whose quality fails to meet the requirements for cultivation.

Promote moderately scaled grain production, with subsidy funds allocated on the basis of 2016 levels. These funds will be drawn annually from agricultural support and protection subsidies, with subsequent years’ allocations adjusted proportionally according to the budgetary arrangements for such subsidies. Priority support will be directed toward new types of agricultural operators—such as large-scale grain growers, family farms, farmer cooperatives, and agricultural social service organizations—ensuring that “those who grow more grain receive greater priority in support.” Localities should adhere to the principles of adapting measures to local conditions, ensuring simplicity and practicality, and balancing efficiency with equity, further optimizing resource allocation to enhance agricultural productivity, land output, and resource utilization.