Heilongjiang collects agricultural machinery subsidies controversy
China News Weekly reporter/Chen Weishan
Published in the 1024th issue of China News Weekly on December 13, 2021
"This is a family ugly." On November 22, at the promotion meeting for the special rectification of agricultural machinery purchase subsidies in the province, Li Yugang, the vice governor of Heilongjiang Province, said.
"Family ugliness" refers to the violation of regulations when applying for agricultural machinery purchase subsidies for some agricultural machinery sold in Heilongjiang in 2019 and 2020-false invoicing, that is, the amount of the invoice issued by the dealer to the purchaser is higher than the actual selling price. Regarded as "deception".
Li Yugang said that fraudulently obtaining subsidies from the central government is "equivalent to a crime plus one class."
The purpose of verifying false invoices is to collect subsidy funds.
At the end of September, Heilongjiang adjusted the subsidy standards for machines with false invoices in 2019 and 2020. Taking four-wheel drive tractors of 200 horsepower and above as an example, the subsidy dropped to 60,700 yuan. In 2019, In 2020, it can reach 121,200 yuan and 110,900 yuan respectively.
The difference between them belongs to the seized part and is borne by the production and marketing enterprise.
According to the fund collection plan, the collection of the subsidy difference in 2020 needs to be completed before the end of this year, and the collection of the subsidy difference in 2019 can be completed by the end of June 2022.
However, the progress of fund collection has been slow, and it is encountering passive resistance from production and marketing enterprises, and some public officials in the grass-roots agricultural machinery management department even stand with them.
"If you do something against your heart, you can't live up to your conscience." A person from the Heilongjiang county-level agricultural machinery management department told China News Weekly. The person in charge of the agricultural machinery management department of a prefecture and city once said bluntly at a provincial meeting, "The seller has no Responsibility", but no one listened to their opinions.
Are the production and marketing companies, especially the dealers who falsely invoiced, "defrauded"?
And what are the problems behind this special rectification work in Heilongjiang that have been concealed?
National Compensation Overspending Behind the Collection
“The collection work has been pushed to the county level for implementation, but most counties are still in the stage of collecting evidence. Dealers need to prove their innocence and prove one by one that the machines they sold in 2019 and 2020 are not falsely invoiced. The evidence is the invoice Actual payment vouchers with the same amount, such as bank, WeChat transfer records, etc., will be regarded as violations if no evidence is available."
The aforementioned county-level agricultural machinery management department said that the scope of the products inspected was 675 suspected illegal products issued by the provincial-level work class, "confirmed one by one, without missing one."
The collection of evidence was originally required to end on November 28, but has since been pushed to December 10.
"Some counties with more overspending have used public security and other means to require dealers to sign a rectification commitment letter, which is to admit the violation and confirm the subsidy difference that needs to be refunded."
A county-level working class worker admitted that funds can only be collected after collecting evidence, and the government at all levels conducts a lot of pressure, and the provincial government has set up 6 supervision teams to inspect progress in prefectures and cities.
The provincial, municipal, and county governments have set up special work classes, which are composed of staff from the development and reform, finance, public security, market management, taxation, and petitioning departments.
When a county-level special class urged dealers to produce evidence as soon as possible, they bluntly stated that the Provincial Public Security Department has made strict requirements, "but it is not yet time to tear their faces."
Hailun City and Bayan County were the first two regions to be investigated, and their use of national subsidies in 2020 each exceeded 100 million yuan. It is precisely the investigation of the false invoices issued by dealers in these two places that initiated special rectification.
Hailun City is considered to be the area where the seizure progress is relatively fast.
According to Liu Xiaoguang, Acting Mayor of Hailun, on November 22, it was initially verified that 1,563 illegal machines and 18.54 million yuan should be recovered, and 1.018 million yuan has been recovered.
A Hailun dealer told China Economic Weekly that he needed to pay hundreds of thousands of yuan. Most of the 14 local dealers had paid tens of thousands of yuan symbolically.
In fact, the amount of subsidy that needs to be turned over several hundred thousand yuan is not too much among the more than 2,000 dealers in Heilongjiang. Some dealers have calculated by themselves that the amount required to turn in is as high as 15 million yuan. "Some dealers around have left Heilongjiang. Staying in the local area can’t bear the pressure.”
Although the relevant person in charge of the Department of Agriculture and Rural Affairs of Heilongjiang Province stated that 675 suspected violations only accounted for 8.1% of all subsidized product models, an industry insider told China News Weekly that some products that entered the subsidized catalogue were not sold at all. From the perspective of actual market sales, these 675 products account for a large proportion, causing almost no dealers in Heilongjiang to be affected.
"No one has signed the rectification commitment letter. Once it is signed, it will be troublesome." The aforementioned Hailun dealer said that another reason for his refusal to sign is that he has not yet completed the division of responsibilities with the manufacturer. "The manufacturer told me that if the difference is signed, it will all be I will make up payment".
Although Li Yugang said that the production and sales enterprises should be held responsible, and that the first responsible person is the manufacturer and sales are only channels, but he did not mention a clear way of sharing the production and sales enterprises.
“At present, the targets of pressure are dealers, because most of the manufacturers are in other places.” The aforementioned county-level agricultural machinery management department said, “Previously, the provincial-level special class has held two meetings with manufacturers suspected of violating products, but the implementation is difficult. The problem is that, first of all, there is no clear division of the responsibilities of the production and sales enterprises; secondly, if the manufacturers bear the money, especially some state-owned enterprises and listed companies, how should the money be included in the accounts? We have also discussed with some manufacturers Contact, the other party’s point of view is that the money is difficult to enter the account.”
An important background for Heilongjiang's eagerness to promote collection work is the use of state subsidy funds in 2020 overexpenditure.
The state subsidy funds allocated by Heilongjiang usually account for about one-tenth of the total.
In 2020, the central government allocated 1.895 billion yuan in subsidies for the purchase of agricultural machinery in Heilongjiang Province. However, inquiring about the real-time disclosure system of agricultural machinery purchase subsidies in Heilongjiang Province, it can be found that the implementation funds in 2020 will reach more than 4.2 billion yuan.
Zhang Zongyi, a professor at the China Agricultural Equipment Industry Development Research Institute of Jiangsu University, told China News Weekly that in 2020, some provinces will have overexpenditure in the state subsidy, but the situation in Heilongjiang is particularly severe.
An important reason for the “overspending” of the national subsidy is the high enthusiasm for purchasing machines.
"Farmers buying machines can be described as'crazy'. Once they reach the point where they will be sold out in the afternoon as long as they arrive in the morning." The aforementioned county-level agricultural machinery management department said that the sales of some dealers doubled in 2020, the driving force behind It is Heilongjiang's "provincial subsidy" policy.
In order to promote the comprehensive utilization of straw, Heilongjiang has superimposed “provincial subsidies” on the basis of the original state subsidies for related machinery.
The “provincial subsidy” policy was only promulgated in October 2019 and will continue in 2020, with cumulative subsidies based on two-thirds of the national subsidy quota, and the total subsidy shall not exceed 50% of the machinery sales price.
A person close to the Ministry of Agriculture and Rural Affairs revealed to China News Weekly that some people from the Ministry of Agriculture and Rural Affairs had objected to Heilongjiang’s “provincial subsidy” policy, worrying that the superimposed “provincial subsidy” would cause a series of problems, but the other party did not obey.
But what is even more difficult for the aforementioned county-level agricultural machinery management departments to understand is that the subsidy system can display the amount of state subsidy funds that has been used in real time, and it is very accurate.
When the nearly 2 billion national subsidy funds were almost exhausted, why didn't the system be shut down in time?
It stands to reason that you should report to the leader in time, suggest that you close the system, and then study the next step.
This is also mixed with an extremely absurd scene.
On November 30, 2020, dealers in Heilongjiang received news that the subsidy for tractors of 200 horsepower and above will be reduced from 110,900 to 82,000 after December 1. As a result, several thousand tractors were sold on November 30, including some The inventory in the dealer's hands, even the tractors on the way to purchase, were invoiced that night.
A dealer asked "China News Weekly", "Thousands of tractors are sold a day, involving hundreds of millions of yuan in national subsidies. Why did such an abnormal transaction not prompt the closure of the subsidy system?"
Driven by the “provincial subsidy”, Heilongjiang’s national subsidy funds will exceed 2 billion yuan in 2020.
Heilongjiang hopes to collect some of the 2020 national subsidy funds that have been issued from the production and marketing enterprises, and downgrade and distribute more national subsidies that have not been issued.
The reason given by the government for the seizure was that dealers falsely issued invoices to “fraud”, but this is obviously difficult to be accepted by production and sales enterprises, especially dealers.
Can false invoices be "defrauded"?
"The most fundamental point is that the dealers didn't see the money at all. The subsidies were paid directly to the farmers who bought the machines. It is really impossible to ask the dealers for money." The aforementioned county-level agricultural machinery management department said.
According to the distribution process of agricultural machinery purchase subsidies, after the dealer issues an invoice, the purchaser submits it to the county-level agricultural machinery management department to enter the subsidy system, and the national subsidy will be directly issued to the purchaser's account.
“For example, the price of a 200-horsepower tractor sold to farmers is 180,000 yuan, and the dealer’s purchase price is about 160,000 yuan. Excluding transportation and warehouse costs, the profit margin of this tractor is basically about 10,000 yuan. 2019 The annual subsidy is 121,200 yuan, which was lowered to 60,700 yuan in September this year. The difference exceeds 60,000 yuan. However, the profit of 10,000 yuan may be required to pay 60,000 yuan. Which dealer can afford it?" Most of the dealers believe that in the context of the sharp increase in agricultural machinery sales in 2020, due to increased market competition pressure, the profit margin of a dealer’s single machine tool will even be squeezed to a certain extent. It flows into the pockets of dealers, and it is the purchasers who really benefit."
In fact, when Li Yugang talked about how to stably control the purchasers, the main body of the violations is the production and sales enterprises, but the actual beneficiaries are the purchasers. "If they take advantage and make trouble, then it shows our policy propaganda work. Didn't do it at all".
Subsidy funds have not flowed into the dealers' pockets. Can dealers fraudulently issue invoices to "defraud" more subsidies?
In fact, the domestic agricultural machinery subsidy policy is a "fixed subsidy". Each year, the national subsidy will first define the scope of subsidies. For example, in 2020, it will include 15 categories, 42 subcategories, and 153 items of machinery. Each province has a different item for each item. The subsidy amount is set for products of the grade. For example, "four-wheel drive tractors with 200 horsepower and above" is a specific grade under the category of wheeled tractors. In 2020, Heilongjiang originally determined that the subsidy amount for this grade of products was 110,900 yuan.
After that, different agricultural machinery manufacturers will put their products on file, and after identification, the subsidy list of each province will be formed. For example, the category of "four-wheel drive tractors with 200 horsepower and above" may bring together N products from N manufacturers, regardless of the final Any difference in price will enjoy a subsidy of 110,900 yuan.
In other words, once a machine tool enters the subsidy catalog, the amount of subsidy it can enjoy has been determined, regardless of the final selling price or invoice amount.
In fact, from 2004 to 2010, my country's agricultural machinery purchase subsidies were carried out in the form of ad valorem subsidies, that is, subsidies were given according to a certain percentage of the selling price of the machinery and tools.
Zhang Zongyi believes that one reason for switching to a fixed subsidy in 2011 is to curb the manufacturers' impulse to increase prices and to falsely report prices to arbitrage subsidy funds.
If it is said that false invoicing cannot obtain more subsidies, what is the motivation for dealers to invoicing?
“In fact, the dealers are against their intentions, because high invoices firstly means that the dealers need to pay more taxes.” The aforementioned county-level agricultural machinery management department said that under normal circumstances, when the invoice is entered into the subsidy system, the system will set up a “ "Red line", that is, if the invoice amount does not reach 2.5 times the subsidy amount, it cannot be entered. At that time, the system will display that the sales amount is too low and cannot be entered. Even if this product already exists in the subsidy catalog, it may not be able to receive the national supplement, so it is formed The “hidden rule” that the invoice amount is at least 2.5 times the subsidy amount.
Why is there such a "red line"?
This is due to how each province sets subsidies for different grades of products under each item.
The "Guiding Opinions on the Implementation of Agricultural Machinery Purchase Subsidies for 2018-2020" issued by the former General Office of the Ministry of Agriculture and the General Office of the Ministry of Finance clearly stated that the subsidy amount is calculated based on the average market sales price of the same product in the previous year, and in principle the estimated ratio does not exceed 30%.
In other words, the subsidy amount should be controlled within 30% of the product price.
It is understood that in some areas, the upper limit of 30% can be raised to 40% in actual operations, thus forming a "hidden rule" that the amount of invoices entered into the subsidy system needs to reach 2.5 times the subsidy amount.
In fact, such "hidden rules" have been "explicitly stated" in the announcements issued by some local governments in Heilongjiang. The Hailun City Agricultural Machinery Subsidy Policy Announcement has clearly stated that the invoice amount needs to reach 2.5 times the subsidy amount. This announcement was launched in the special rectification. It was deleted afterwards. It is understood that the staff member who issued this announcement was investigated by the Commission for Discipline Inspection.
"There have been such announcements that prove that if the invoice amount does not reach 2.5 times the subsidy amount and cannot be entered, it may not get a penny of the subsidy." A Harbin dealer told China News Weekly that the farmers were buying. A machine tool must have been expected to receive subsidies in full according to the subsidy catalog.
When determining the fixed subsidy amount of a machine tool, it should not exceed 30% of the selling price. However, the government has determined that the subsidy amount based on the distorted selling price is too high, forcing dealers to falsely issue invoices to ensure that the purchaser receives the subsidy amount approved by the government. In this logical chain, the crux of the problem obviously does not lie in the false invoices issued by the dealers.
Special rectification that turned the cart before the horse?
"The problem that may actually occur is in the stage of shifting. If a certain type of equipment of a company meets the requirements of a certain grade, but the subsidy amount of that grade is abnormally high compared to the actual selling price of the equipment, the company should be able to'downshift'. If it does not exceed the subsidy amount determined at this level, fill in the subsidy amount that matches the actual selling price." Zhang Zongyi said, but the specific policies of each province are different.
"China News Weekly" noted that the "Notice of Heilongjiang Province on Further Doing a Good Job in Investing in Agricultural Machinery Purchase Subsidy Equipment" issued on September 30 last year mentioned that if the product sales guide price is low, in order to avoid an abnormally high subsidy ratio, production Enterprises can choose to self-fill subsidies on the basis of not higher than the level of subsidy standards.
However, when Heilongjiang announced the subsidy standards and investment requirements for the first batch of agricultural machinery products in April 2020, such content expressions did not appear.
Therefore, the notice on September 30 is regarded by many manufacturers as a "patch" policy.
"In fact, the manufacturers feel that they are wronged. For example, the subsidy amount corresponding to the '200 horsepower and above four-wheel drive tractor' is only one level. A product of the manufacturer meets the technical parameters of this level, but the subsidy amount corresponding to this level is compared The true selling price of the car is very high.” Some insiders said that at this time manufacturers can’t put a 200-horsepower tractor into the 180-horsepower gear, and more often falsely report the guide price when it is put into gear.
A person in charge of an agricultural machinery manufacturer told China News Weekly that the symbolic meaning of companies filling in the guide price when investing in the file is actually greater than the actual meaning, because the amount of subsidy corresponding to the investment grade is calculated based on the average market sales price of the same product in the previous year. In principle, the estimated ratio does not exceed 30%, and it is not calculated based on the guide price filled in by the enterprise.
"The subsidy standard for most products in most provinces is 30% lower than the sales price."
"The root cause lies in the initial calculation of the subsidy amount, if the actual market price of an agricultural machine is not known, how is the fixed subsidy amount calculated?" The person from the Heilongjiang county-level agricultural machinery management department said, "If the 200-horsepower tractor only subsidizes 60,000 yuan, no manufacturer will falsely report the guide price, and no dealer will falsely issue invoices."
Obviously, Heilongjiang did not reduce the subsidy in a timely manner based on changes in market conditions.
Taking a 200-horsepower tractor as an example, the original subsidies for Heilongjiang in 2019 and 2020 were over 120,000 yuan and 110,000 yuan respectively. However, a dealer told China News Weekly that the ex-factory prices of some small factories had already fallen. Around 170,000 yuan, the lowest can be as low as about 160,000 yuan. The ex-factory price of some large domestic brands is also about 210,200 yuan. If there is no competitive pressure from small factories, the ex-factory price can be as high as more than 300,000 yuan. .
"The subsidy amount of 120,000 yuan is actually calculated based on the price of more than 300,000 yuan, but the price has actually fallen in the past two years."
While Heilongjiang still gave more than 100,000 yuan in subsidies to 200-horsepower tractors, some provinces have reduced the subsidy to around 60,000 yuan.
The person in charge of the aforementioned agricultural machinery manufacturer told China News Weekly that a situation would arise: “A 200-horsepower tractor priced at 170,000 yuan is calculated based on the subsidy amount of 60,000 yuan in some provinces. The guide price was falsely reported, and there was no need for the dealer to open the invoice higher because these provinces adjusted the subsidy amount in time, but for the same tractor in Heilongjiang, the guide price was falsely reported and the invoice was falsely invoiced."
After the subsidy was reduced in September this year, the subsidy for four-wheel drive tractors of 200 horsepower and above in Heilongjiang also dropped to more than 60,000 yuan.
"The people who really made the rules didn't make the rules well." The aforementioned people in the agricultural machinery industry lamented that under normal circumstances, the subsidy amount should be adjusted in time, but as long as the subsidy fund does not exceed the expenditure, it will not be adjusted, because the subsidy fund comes from the central government and local farmers receive beneficial.
This kind of acquiescence allows manufacturers to take advantage of the "loophole". The products of the manufacturer fully meet the requirements of technical parameters, otherwise they will not be successfully put into the corresponding grade through the appraisal. How can it not be opened according to the subsidy amount determined by the investment file? bill?
"This time I have to pierce this layer of window paper, but the current special rectification is turning the cart before the horse. Instead of dealing with the root cause of the problem, it grabs the last link."
At the moment, the special rectification is still going on, and production and sales companies, especially distributors, are still fidgeting.
Some dealers said that although Heilongjiang is putting pressure on some large-scale manufacturers, if they do not cooperate, they will cancel the qualification of their products to enjoy subsidies in Heilongjiang in the future. This can be regarded as Heilongjiang’s pivotal agricultural machinery market position in the country as a bargaining chip, but After communicating with the manufacturer, the other party still said that it would depend on the situation of other manufacturers. After all, 286 manufacturers were involved.
"And some small local factories may simply choose to close their doors and register and set up new companies next year after cancellation. As a result, the pressure of paying the difference in subsidies may all fall on the distributors."
In fact, the completion of the collection of the 2020 subsidy difference before the end of 2021 may not be a concentrated flash point of contradiction, because the collection is aimed at subsidies that have been issued, and it is understood that the amount of subsidies that have been issued in 2020 is very limited.
"The settlement cycle of Heilongjiang agricultural machinery subsidies will even be extended to one or two years. For example, in some counties like Qiqihar and Jiamusi, 90% of the subsidies have not been issued in 2019. Basically, the province's subsidies in 2020 have not been issued, only more than 10 A county with ample funds has already issued it, so the amount to be collected is still limited."
A distributor in Harbin told China News Weekly that only by collecting the subsidies that have been issued in 2020, can subsidies be issued in accordance with the new subsidy standard after the subsidy is reduced. This is the biggest test. "By then, buyers may find that The amount of subsidies I received plummeted."
This makes some dealers who "make up" for the purchasers feel quite uneasy.
The so-called "reimbursement" means that before the subsidy is issued, the purchaser of this part of the money sends an IOU to the dealer, and then returns it to the dealer after the subsidy is issued. As the amount of subsidy decreases, some dealers are already unwilling to fully recover the funds. hope.
"The amount of'admission' of some dealers may even reach tens of millions. You can simply calculate that the amount of subsidy for a 200-horsepower tractor is 110,900 yuan, and the amount of'admission' for the sale of 100 units can reach tens of millions." .
Li Yugang said at the November 22 meeting that the settlement limit between the dealer and the farmers who originally purchased the agricultural machinery has changed, which can no longer leave the farmers with troubles, and avoid the production and sales enterprises to go back to the farmers to settle the accounts.
This is regarded by him as the next key link after completing the collection of illegal funds.
China News Weekly, Issue 46, 2021
Statement: The publication of the "China News Weekly" manuscript is authorized in writing