Guided by the principle of “making more investments in agriculture, lightening the burden of the farmers and making effort to realize the flexibility for agricultural industrialization”, Shanghai moves along with its rural taxation reform. Statistics show that each of the farmers was exempted from taxes valued at RMB118 yuan on average in 2004 compared with 2001 when the reform was not implemented, and the farmers were virtually free of any taxes. After “transfusing blood to agriculture and farmers” by means of policy guidance, Shanghai is making effort to establish a long-term and effective wealth-amassing mechanism for its farmers so as to avoid the periodic fluctuation in farmers’ income.

Shanghai is striving to form a long-term and effective wealth-amassing mechanism for its farmers, the focus of which is to develop a long-term channel for farmers’ income increase by means of providing farmers with more job opportunities and social security and enhancing farmers’ asset increment through circulation. Shanghai has fundamentally established a job service system featuring the integration of the urban and rural areas, making its possible for farmers to engage in non-farming jobs. In addition, over 600,000 farmers have been covered by the “township security”. Meanwhile, the city has implemented the policy of government-guaranteed minimum pension for elderly farmers, regulated and improved the circulation and transfer mechanism of land contracting and land use in the rural area, perfected the distribution system of the collective assets and earnings in the rural area, and explored into a transparency mechanism for the value of farmers housing assets.

In some of the villages in Shanghai that enjoy relatively better social and economic conditions, farmers with share capitals, rentals, security benefits and wages have emerged. According to the latest statistics provided by the social economic investigation team organized by the Municipal Statistics Bureau, in the first quarter of this year, among the different types of disposable incomes of Shanghai farmers, long-term incomes all turned out to be the part that increases most rapidly and was the most dynamic. Incomes ensued from farmers’ properties and capital transfer both increased by over 30 percent, among which incomes from rural houses renting and land transfer and contracting increased by 10.8 percent and 47.7 percent respectively. Farmers’ pension was 1.7 times higher than previously and their wages also rose steadily. In the first quarter of this year, the overall income of the farmers increased by 3.3 percent.