In the first of a two-part series on China's rural crisis, we look at Hubei province, an area buckled under central government restrictions and local corruption
THE rich fields of wheat are full of bent backs gathering the golden autumn harvest in one of the most fertile parts of the mainland. It looks like an idyllic rural scene, but the reality is that the peasants of Jianli county in central China's Hubei province are seething with a bitter anger that is part of a growing rural crisis throughout the nation.
'If I could, I would shoot all the officials, from the top to the bottom. They are eating our flesh, drinking our blood. The Communist Party is finished, they are all corrupt. No one believes in them,' shouts Zhu Li, taking a pause from threshing wheat grain.
Zhu Li did not seem to care who else heard him. Soon other peasants gathered around him murmuring their assent. They were mostly stooped and elderly peasants whose children and grandchildren had left to find work in the cities.
Some villages, like Huangqiao, are almost deserted, the houses vacant with padlocked front doors. Entire families have decamped, abandoning their land and forcing the local government to lease out the land and bring in outside labourers to harvest the grain. Some claim 90 per cent of the workforce has fled, leaving behind just the old and very young.
'The more grain we grow, the poorer we become. If you refuse to plant grain, there is a poll tax, 500 yuan [about HK$470] a person,' complained Zhu Li. One old man had hung himself in despair, another family had drowned themselves in one of the nearby canals.
Jianli county is one of the country's specialised grain bases created in the early 1990s. In order to boost harvests and fill state granaries, so as to combat dangerous inflation in urban China, this district and others were ordered to grow nothing but grain.
The present grain crisis is the child of plenty. After years of record harvest, China's granaries are now bursting with stockpiles that no one wants to buy.
The county's Qipan township - an area that includes the fields in which Zhu Li and his fellow peasants are working - became internationally famous after its former party secretary, Li Changping, took the daring step of writing directly to Premier Zhu Rongji. It was a bold move that bypassed the usual bureaucratic channels through which such messages are normally sent.
'I can't tell you how it managed to reach the desk of Premier Zhu but I know he is also alarmed about the rural situation,' Mr Li said.
The letter described how peasants were abandoning their land to escape the taxes levied by rapacious local officials who were forcing them into destitution. 'Filled with endless loyalty to the party and deep sympathy for the farmers, I tearfully write this letter to you. What I want to tell you is this: the farmers are now undergoing great hardships, the rural areas are very poor and agriculture is in great danger.
'I have met old people who held my hands and told me tearfully that they preferred to die early, and I have seen the sad sight of children kneeling before me saying they want to attend schools,' he said.
Mr Li has since quit, apparently forced out by local cadres furious that he bypassed them with these warnings of impending doom, especially after Guangdong's Nanfang Weekly revealed the existence of his letter last month - and published its text - making headlines around the world.
But at least his plea was noticed, with Premier Zhu responding by dispatching an inspection team led by the provincial governor to investigate the situation. Beijing has clearly been alarmed by recent riots in several grain-rich provinces - from Jiangxi to Hebei, Sichuan and Anhui - which have seen frustrated peasants smash up local government offices. In many cases, the ring leaders have been arrested and executed.
China's imminent entry into the World Trade Organisation will only make the situation worse. For the first time since the 1930s, China's domestic grain prices will have to fall in line with those on the world market.
'Prices are too low and the taxes are too high. In my township 45,000 people have left and abandoned 35,000 mu [about 1,417 hectares], that's 65 per cent of the farmland,' Mr Li said.
From next year, China will start opening its markets to competition, even before it has succeeded in creating a functioning domestic grain market. Domestic prices will move in line with world demand and the state will stop planning harvests.
This could lead to China becoming a much larger importer of grain than ever before, depending on how global commodity markets fluctuate. Chinese grain production is already dropping for the first time in five years, with the wheat harvest down this year by 10 per cent and corn by 20 per cent in some parts of the country.
This is the third attempt in 20 years to remove the state from the role of planning harvests. The first attempt ground to a halt in 1989, when then premier Li Peng brought agriculture back into the planned economy, forcing some areas to grow only grain and sell it to the state.
A new wave of reform unleashed by Deng Xiaoping after 1992 freed up more prices amid an attempt to create national commodity markets. But state controls were swiftly re-imposed after inflation started spiralling out of control. China then stepped up grain imports and used government subsidies to fix domestic prices at levels far higher than world prices.
Peasants responded by producing record harvests. 'The programme was too successful, they built up huge stocks. They kept prices above world levels for two years even after world prices collapsed,' said one United States Department of Agriculture expert.
Some reports say China's government granaries hold 550 million tonnes of grain and the peasants themselves hold another 750 million tonnes.
According to Professor Chen Jinsong, from the Rural Development Institute at the Chinese Academy of Social Sciences, peasant incomes in rural provinces like Henan dropped by an average of 4.6 per cent in 1997, 4.3 per cent in 1998 and 3.8 per cent last year.
'The situation is very serious, with more and more going to the cities to seek work.'
The worst-affected Chinese peasants are now believed to be getting half what they were earning three years ago. Many feel cheated by the officials who often say their grain quality is inferior and does not qualify for top prices. In the past, the state bought grain from the peasants at a price fixed by Beijing. But this year, some areas have abandoned the practice and are instead only paying the local market price, which is invariably much lower.
The central government has tried to relieve the crisis by hiking its guide price for some crops by 10 per cent and in some cases by 30 per cent, but to little effect.
'There's a big disconnection between what Beijing promises and what happens,' explained the US expert. 'Premier Zhu promised many things when he became premier but he can do nothing, he has no real power,' concurred one Qipan peasant, echoing a general disappointment. Their disillusionment is even shared by some local officials.
When the central government orders higher grain prices, it is the local governments which have to find the funds. Qipan, like other rural administrations, is bankrupt and deeply in debt. Many local governments can barely find the resources to pay their staff wages.
The state Agricultural Bank is now reluctant to hand out more loans to bail out local governments. Instead they are now forced to borrow elsewhere and pay exorbitant interest rates.
The whole structure of rural credit has collapsed in the crisis, with the central Government, in deficit itself, unwilling to direct funds away from its top priority, the rescue of state-owned enterprises.
And Li Changping will no longer be in a position to help the peasants of Qipan. Locals say that after his controversial letter to the Premier, local cadres persecuted him so much that his wife threatened to divorce him unless they left the area.
'I am leaving, I resigned. I don't think things will improve for the peasants,' he told the Post in a telephone interview from his car as he left the county where he had worked for 17 years. He now intends to try and find a job with a commercial company in Shenzhen.
The national rural crisis is now being used as an opportunity by some reformers to push for radical changes to the way peasants are treated by the state.
Experiments at introducing income taxes to replace the raft of ad hoc fees and taxes levied by local administrations since the early 1980s are being stepped up. This reform, which was pioneered in Anhui province, is now to be spread across the country from next year.
The tax reforms are the most important and crucial change envisaged, because if successful they would weaken the power base of local cadres and strengthen the hand of the central government.
Yet, in Qipan, many believe that such reforms are too late, since corruption in the countryside is already too widespread.
Locals claim all official posts are now for sale. 'It costs 2,000 yuan to became a village book-keeper, 20,000 to get a job as village chief and 200,000 a county secretary,' said Zhu Li.
He alleged that even in a relatively poor place, a smart official could save enough to send his children to be educated abroad.
For those who speak out, like Qipan's party secretary Li Changping, even the hand of Premier Zhu cannot stretch out far enough to offer protection from the local network of corruption.
Jasper Becker (email@example.com) is the Post's Beijing bureau chief