Daily Economic Review | Raising Farmers' Pensions: Filling the "Shortcomings" in People's Livelihoods and Boosting the "Low Point" in Domestic Demand

Every Day Economic News

Commentator Fu Keyou

This year’s National People’s Congress and Chinese People’s Political Consultative Conference drew widespread attention to the topic of farmers’ pensions.

Deputy Guo Fenglian directly stated, “200 yuan per month in pension benefits is a bit too little for farmers,” while Deputy Bi Lixia choked back tears and suggested, “Pensions for rural elderly over 70 should be increased to 400 yuan per month,” Deputy Lei Maoduan proposed, “Gradually raise the basic pension for rural residents over 70 nationwide to 500 yuan per month over three years,” and Deputy Zhang Xuewu recommended, “Take five years to gradually increase farmers’ pensions to an average of 1,000 yuan per month per person”…

These suggestions reflect the voices of hundreds of millions of rural elderly and have resonated widely in society.

Interestingly, some questioned whether farmers have paid social security. Deputy Lei Maoduan responded, “The grain paid by farmers is equivalent to paying social security.”

This topic also sparked heated discussion.

Some netizens questioned whether the grain paid in the past was agricultural tax, which went into the national treasury’s “big ledger,” whereas social security is paid individually and goes into future “pension accounts.” The fiscal logic of the two is indeed different.

But looking back at history, after the founding of New China, over decades, farmers supported urban industrialization and modernization through paying grain, performing voluntary labor, and benefiting from the “scissor difference” between farm and industrial products. They made great sacrifices to lay a solid foundation for economic growth and contributed significantly to national development. Today, providing them with “systematic support” through fiscal transfer payments to ensure a more secure retirement is a historical responsibility and a matter of social fairness.

In fact, there’s no need to argue whether “grain is social security,” because that would obscure the essence of the issue. From a practical perspective, increasing farmers’ pensions is not about spending money to aid them but about addressing the “shortcomings” in people’s livelihoods and boosting internal demand in “depressed” areas.

Addressing the so-called livelihood “shortcomings” means that raising farmers’ pensions is an inherent requirement for promoting common prosperity, improving income distribution, and strengthening the social security system.

This area already has a certain foundation and is a continuous process of improvement. The basic pensions for urban and rural residents have increased for seven consecutive years. The nationwide minimum standard in 2025 will be 143 yuan/month, and the government work report this year explicitly proposed raising it by another 20 yuan, reaching 163 yuan/month.

According to data provided by Deputy Zhang Xuewu, in 2025, the average monthly pension for urban and rural residents will be only 287 yuan, while urban employees’ average monthly pension is 3,498 yuan—more than 12 times higher. This clearly shows that farmers’ pensions are indeed a “shortcoming within the shortcoming” of China’s social security, and continuous improvement is imperative.

The so-called internal demand “depressed area” means that increasing farmers’ pensions is essential for maintaining internal demand-led growth, expanding new space for demand growth, and leveraging China’s large-scale market advantage.

Internal demand is not grand rhetoric but the daily essentials of thousands of households—food, clothing, housing, and transportation. Why increase income for middle- and low-income groups? Because they tend to spend more readily when they have money. Rural elderly are among the groups with the highest marginal propensity to consume.

Economist Liu Shijin estimates that increasing rural residents’ pensions by 1 trillion yuan could boost GDP by about 1.2 trillion yuan. This is not just “spending” but “investment”—investing in people, in internal demand, in economic cycles, and in growth momentum.

Therefore, from an economic stimulation perspective, this money is not a “sunk cost” but a “lever” to activate internal demand, creating a multiplier effect of “a little effort for great results.”

Of course, a key question is: where will the money come from? The suggestions from deputies reflect a pragmatic spirit of “doing our best within our capacity” and include clear roadmaps and funding plans. For example, Deputy Lei Maoduan’s proposal to raise pensions for farmers over 70 to 500 yuan/month involves an additional annual expenditure of about 230 billion yuan, accounting for 0.83% of the national general public budget. Deputy Zhang Xuewu’s plan proposes raising funds through diversified channels such as reallocating profits from state-owned capital and establishing special taxes. In fact, sharing more development achievements with farmers aligns with China’s economic resonance.

In this regard, increasing farmers’ pensions is a highly strategic investment with excellent returns. It is not merely a fiscal expenditure nor a “favor” to farmers; it is a reasonable return for their historical contributions, a precise remedy for livelihood “shortcomings,” and a powerful activation of the internal demand “depressed area.” It honors the past and paves the way for a better future.

Daily Economic News