The Ministry of Finance ("MOF") and the Ministry of Agriculture and Rural Affairs ("MARA") have revised and issued the administrative measures for agriculture-related transfer payment funds, including the Administrative Measures for Funds for the Development of Agricultural Production (the "Measures"), all of which shall take effect immediately from the date of issuance.
The Measures are organized into six chapters which include the scope of expenditures of the funds, allocation of the funds and distribution of the budget quota, use and management of the funds, and supervision and performance assessment. Among others, the Measures expressly state that the funds for the development of agricultural production are mainly used to cover six types of expenditures, such as "the expenditure for preservation of farmland fertility," and cannot be misappropriated to bear the costs of those activities irrelevant to the development of agricultural production, including constructing office buildings, auditoriums, exhibition halls and guest houses and making up for the budget outlay deficit. Meanwhile, the Measures stipulate that the funds for the development of agricultural production may be offered in various forms, such as direct subsidies, government procurement of services, interest discounts, post-construction subsidies, awards in lieu of subsidies, quantitatively converting assets into shares, and guarantee subsidies. Furthermore, the Measures prescribe that the funds for the development of agricultural production will be managed in the mode of "special funds for major programs plus the list of tasks". The list of tasks specifies the annual priorities to be financed by the funds for the development of agricultural production, the areas to be supported, and specific goals, and such funds will be allocated together with the capital budget.