We will increase subsidies for farmers. Expenditures in the central budget for subsidies to farmers total 133.59 billion yuan, an increase of 25.3 billion yuan or 23.4%. Included in this figure is 15.1 billion yuan in direct subsidies to grain producers, 48.2 billion yuan in general direct subsidies for agricultural supplies, 4 billion yuan in subsidies for the purchase of agricultural equipment and machinery, 7.07 billion yuan in subsidies for superior seed varieties, and 1.6 billion yuan in subsidies for training farmers.

We will strongly support the development of agricultural production. Expenditures in the central budget for the support of agricultural production total 304.45 billion yuan (including most of the expenditures for agriculture, forestry and water conservancy, expenditures for farmland reforestation projects that are listed in the environmental protection section of the budget, and subsidies for reform of rural taxes and fees that are listed in the section of the budget dealing with fiscal transfer payments from the central to local governments), an increase of 44.19 billion yuan or 17%. This figure includes: 102.28 billion yuan to develop rural infrastructure; 8.4 billion yuan to finance the building of small farm water conservancy facilities and repair small reservoirs in poor condition; 12.72 billion yuan to finance overall agricultural development, which will focus on supporting efforts to improve low- and medium-yield farmland in major grain-producing regions and reduce water use in medium-sized irrigated areas in order to enhance overall agricultural production capacity; 16.5 billion yuan to stabilize and improve the reward policies for major grain-producing counties; 13.5 billion yuan to improve the follow-up policies on farmland reforestation, continue paying subsidies to farmers displaced by farmland reforestation and strengthen the development of basic subsistence farmland for them; 6.05 billion yuan to improve the system of subsidies for agricultural insurance premiums; and 16.73 billion yuan to increase funding to alleviate poverty through development and make innovations in poverty relief mechanisms. We will increase support for wider application of advanced and appropriate agricultural technologies. In addition, we will improve fiscal and taxation policies and measures to stimulate greater production of pork, dairy products and oilseeds. We will set a floor price for the purchase of grain and appropriately increase the floor price for the purchase of grain and wheat when needed.

We will accelerate development of rural social programs. The central government has allocated 124.52 billion yuan for this purpose, an increase of 61.14 billion yuan or 96.5%. This sum is made up of: 107.32 billion yuan to support rural education, culture and public health; 9 billion yuan to fully set up and optimize a system of cost of living allowances for rural residents; and 6.2 billion yuan to help people affected by natural disasters to restore their lives.

We will increase investment in agriculture, rural areas and farmers through a variety of channels. Compensation paid to the central and local governments for the conversion of farmland to development purposes will continue to be used for developing and protecting basic farmland, improving land and developing arable land in accordance with regulations. Local government budgets will also increase allocations to aid agriculture, rural areas and farmers. In particular, income from land transfers will be used primarily for building a new countryside, ensuring that farmers are fully compensated for expropriated land and the costs of their relocation, and subsidizing social safety net payments to farmers whose land has been expropriated. The proportion of income from land transfers that gets spent on farmland development and rural infrastructure projects will be gradually increased. We will vigorously support the establishment of a sound system of rural financial services. We will substitute rewards for subsidies and introduce other measures to encourage not only farmers but all sectors of society to increase investment.

3. We will strongly support social programs such as education, medical and health care, and the social safety net.

We will ensure that the development of education is given priority. The central government has allocated 156.176 billion yuan to develop education, an increase of 45.1%. We will institute free compulsory education in all urban and rural areas. The central government has allocated 8.4 billion yuan for trials to exempt all urban students from paying tuition and miscellaneous education fees for compulsory education beginning in the 2008 fall school term. A total of 57.04 billion yuan, an increase of 20.56 billion yuan, has been allocated to better guarantee funding for operating expenses for rural compulsory education. Beginning with the 2008 spring school term, we will increase subsidies for providing free textbooks, increase allowances as appropriate for students from poor families living on campus, and raise the level of public spending per student in rural primary and secondary schools. We will raise the standard for calculating the unit price for repairing or renovating rural primary and secondary school dormitories in the central and western regions, with special consideration given to schools located in areas with harsh conditions such as bitter cold. A total of 22.3 billion yuan, an increase of 12.5 billion yuan, has been allocated to fully fund assistance to students from poor families attending regular undergraduate institutions, vocational colleges and secondary vocational schools. We will continue to carry out and improve the policy of providing assistance to students from poor families attending regular senior secondary schools in the central and western regions. The policy of providing free education to education students at normal universities directly under the Ministry of Education will be continued. Where financial conditions allow, local governments may also provide free education to education students.