Subsidy for Agricultural Machinery Purchase in 2012 "GSP" Will Eliminate Obstacles

The implementation of the agricultural machinery purchase subsidy policy for 8 years is undoubtedly the driving force and engine of China's agricultural mechanization process. It is precisely because of this policy that China has entered the fast track of agricultural mechanization development. In 2012, the first batch of agricultural machinery purchase subsidy funds amounting to RMB 13 billion was earmarked early. It has become the consensus of the industry to further increase subsidies for agricultural machinery purchases. While the scale of subsidies has continued to expand, the implementation of subsidy policies has also been adjusted and improved. The policy pilots proposed in 2012 seem to have allowed peasant users and the agricultural machinery industry to expect the "GSP" subsidy policy for agricultural machinery purchases to gradually move closer.

In the "Guidance on the Implementation of Agricultural Machinery Acquisition Subsidy in 2012", it was clearly stated that agricultural machinery items that are urgently needed by a small number of agricultural production and that are conducive to structural adjustment and layout optimization of agricultural machinery and equipment should meet the pilot requirements for subsidy purchases for all farmers in the province; at the same time, some cities and counties should be selected. After implementing the full-price purchase, the subsidy pilot will be received with the invoice; the subsidy funds will be decentralized at the lower level.

The first pilot is precisely the basic of the “Preferential System” for agricultural machinery purchase subsidies. Farmers purchase full-price tickets with subsidy and subsidy funds and transfer them to the county or township. If the funds can be pre-deducted in advance, the farmers can buy it. After the agricultural machinery, directly to the relevant departments to receive subsidies directly. This seemingly a succession of institutional design, but it is ups and downs, but I would think that the "Preferential System" is to let the agricultural machinery industry return to healthy development of the market, promote industrial restructuring, and further promote China's agricultural mechanization development of a good medicine. And in 2012, perhaps it was the eve of the "GSP" policy for the purchase of agricultural machinery.

First, what is the demand for agricultural machinery purchases without limiting subsidies? At present, no accurate measurement has been made. No one can say how much plate subsidy funds can meet this demand in the future. However, the current total output value of the agricultural machinery industry can be foreseen. This is a big plate. In nearly a trillion of agricultural funds, the purchase of agricultural machinery Subsidizing this fund is very easy to digest.

Second, how to ensure that the subsidy funds reach farmers' users is actually not a technical problem. As long as funds are fully allocated in advance, the state fiscal funds will be transferred to banks or other third-party financial institutions. In the examination and approval of local administrative management, the possibility of misappropriation of funds is circumvented naturally, and the local agricultural machinery management department can only block and take out state subsidies as long as they strictly examine whether the farmers actually purchase the machine.

Third, another conceived obstacle to the implementation of the “Generalized System of Preferences” is the excessive subsidies that have resulted in an excessively large amount of agricultural machinery products, resulting in a waste of state subsidies. However, in fact, China's agricultural mechanization services have begun to move toward specialization. All agricultural machinery cooperatives have become bearers of agricultural machinery operation services, and agricultural mechanized operation services will soon become a market. Since it is a market, it will follow the market supply and demand. The law of balance, when supply exceeds demand, the price of farm machinery operations will decline, and vice versa. The purchase of agricultural machinery products will also change with the changes in the market. Profits will be used to purchase machines, profit from operating services will be used to control procurement, and the development of agricultural machinery industry and agricultural operations will return to the market cycle.

It now appears that the obstacles to the "GSP" are no longer an obstacle with the continuous expansion of subsidy funds. In 2012, after the trial, can the industry really enter a new era? How long will this eve of the "Preferential System" era be?