SHANGHAI (AFX-ASIA) - China must maintain its policy of paying protective grain prices to farmers, and must promote the reform of rural taxes and fees, Premier Zhu Rongji said, according to the People's Daily.
According to the report, Zhu said China's rural problems risk having a negative impact on the overall economic environment, adding that the country must take action to boost rural incomes.
He said some local authorities in China are unable to pay civil servants' salaries on time, adding that higher level governments should give fiscal support to ensure these salaries are paid.
He also said the State Council has adopted a plan for social security reforms, adding that the plan will be implemented experimentally in some areas next year.
Speaking in Shandong province, Zhu said there are currently many problems in the countryside, particularly the fact that grain is in a period of oversupply, which is causing grain prices to drop and slowing the growth in farmers' incomes.
In some areas, where the main business is grain production, personal incomes have even declined.
If this situation is not reversed, it will cause the agricultural base to become unstable, and will even affect the overall economic environment, he said.
The government must use practicable measures to strengthen agriculture and raise farmers' incomes, and should promote structural adjustment of agriculture and deepen the grain circulation reforms.
The policy of giving protective grain prices is effective and should be maintained, he said, adding that grain prices should not be reduced.
The government should promote reform of rural taxes and fees and should bring a real reduction in farmers' burdens.
Anhui province and other areas have already experimented with this reform, he said, adding that this experience should be weighed up and the experiments should be extended nationwide.
The task of adjusting agricultural structure and raising farmers' incomes requires support from financial institutions, he said, noting that rural credit cooperatives should increase their funds available for lending and improve their services and lending style, while also taking care to limit financial risk.
Zhu said the staff of administrative bodies in some areas do not receive their full salaries on time.
It is the government's duty to ensure that these government employees are paid on time, he said, adding that timely salary payments are also a necessity for ensuring the administrative bodies continue to operate.
When preparing their budgets, the various levels of local government should adhere to the principle of "eat first, build later".
They should make priority arrangements for payment of salaries, he said, adding that higher levels of government should give financial support to counties which have real difficulties paying civil servants' salaries.
Zhu also said the state enterprise reforms, and the moves to "get state enterprises out of difficulties", have already achieved good results, although this is only one stage in the reform process.
Many state enterprises continue to face operating difficulties, he said, adding that it will take a long time and more effort to thoroughly resolve state enterprises' difficulties.
He said state enterprises will face stronger competition once China joins the World Trade Organisation, and companies must maintain a sense of the risks.
Zhu also said it is important to improve the social security system as soon as possible, adding that the key tasks are to ensure state workers have basic life support and to ensure retired individuals can receive their pensions on time.
There must be no new pension arrears this year, he said.
He added that the State Council has already drafted a detailed plan for the establishment of a social security system.
After approval by the party's Central Committee, the social security reforms will initially be implemented on an experimental basis in Liaoning and some cities in other provinces next year, and will subsequently be implemented nationwide.:
