Special Seminar: Addressing Systemic Challenges to Improve Farmers' Pensions

By Zero One Think Tank

【Editor’s Note】

The 2026 National Two Sessions have come to a successful close. During the event, more than 20 deputies to the National People’s Congress focused on the difficult issue of elderly farmers’ pensions. They put forward suggestions on improving farmers’ pension levels and完善ing rural pension and elderly care protection systems. Among these are specific proposals such as “gradually raising the basic pension for farmers aged 70 and above to 500 yuan per month within three years,” which has drawn widespread attention and heated discussion across society.

The NPC deputies’ proposals on farmers’ pensions, in essence, reflect concrete efforts to practice the original intention of serving people’s livelihood, fill gaps in people’s livelihood, and advance social fairness. Their significance runs through three dimensions: historical compensation, real-world protection, and development-oriented guidance, combining both warmth and depth.

Zero One Finance invited deputies to the National People’s Congress, professors from Peking University, and professors from China Agricultural University to hold a special discussion. They explored the necessity of improving farmers’ pensions in China today and also delved into how farmers’ pensions can be improved, with the aim of advancing adjustments to farmers’ pensions in China more effectively.

【About the Author】

Fang Yan, a deputy to the National People’s Congress; a supervisor at the Supreme People’s Court and the Supreme People’s Procuratorate; deputy head of the Rights and Interests Department of the All-China Women’s Federation (part-time); and a senior partner at Beijing Jincheng Tongda Law Offices, as well as director of its Xi’an branch.

Gu Lei, deputy director of the Research Base for Inclusive Finance and Legal Supervision at Peking University, and chief economist of the China Association of Local Financial Studies.

Zhang Dong, associate professor at the School of Humanities and Development, China Agricultural University; secretary-general of the Pension Finance 50 Forum at Tsinghua University’s Institute of Finance (Wudaokou).

Zero One Finance: During this year’s Two Sessions, the issue of increasing farmers’ pensions again became a focal point for people’s livelihood. Several NPC deputies called for raising farmers’ pension benefits. For example, NPC deputy Guo Fenglian believes that “200 yuan a month in pension is a bit too unfair for farmers,” and Lei Maidu’an suggested “raising the basic pension for farmers aged 70 and above from a little over 100 yuan to 500 yuan.” NPC deputy Ren Min also proposed “waiving medical insurance contributions for farmers aged 80 and above,” ensuring that elderly farmers can spend their late years with security.

For a long time, China’s farmers’ pension benefits have been too low. This not only affects the quality of retirement life for elderly farmers, but also severely restricts the release of consumption potential in rural areas. How to effectively ensure the social security system for farmers is further optimized, advance common prosperity, and narrow the income gap between urban and rural areas has become a realistic and pressing issue at this stage. In your view, what are the main pain points in China regarding farmers’ pensions?

Gu Lei: At present, the five main pain points in China’s farmers’ pensions are concentrated in: (1) low benefit levels, (2) large regional disparities, (3) weak enrollment incentives, (4) a single structure of protection, and (5) insufficient services and supporting measures. These have become the most prominent real-world contradictions in rural elderly care.

1. Current farmers’ pension standards are on the low side, leading to a large gap between urban and rural pensions, which does not align with the national goal of narrowing the difference between urban and rural areas.

At present, the minimum pension standard for rural farmers is scheduled to be raised to 163 yuan per month in 2026, which is only 1/12 of urban employees’ pensions (about 3,500 yuan per month), and also below 50% of the rural minimum living allowance standard (about 594 yuan per month). Most farmers’ pensions are only enough to buy staple foods, cooking oil and basic necessities, clothing, and some medicines. They cannot cover rigid expenditures such as medical care, utilities including water and electricity and gas, and elderly care services, making it difficult to meet all the needs of rural elderly people for retirement life.

2. The regional disparity in pensions between urban and rural areas is stark—especially among farmers in eastern and western regions—which is not conducive to the healthy development of the pension system nationwide.

For example, farmers’ pensions in Shanghai are about 1,555 yuan per month, while in Gansu they are only about 249 yuan per month—a gap of more than six times. This shows a tendency toward an “east–west divide.” This indicates that the problem of imbalanced regional development in our country is prominent. The rural elderly care security system for farmers urgently needs to be upgraded from “localization and fragmentation” to “national pooling and fair, universal coverage,” to meet the requirements of common prosperity in the socialist new era.

3. Incentive mechanisms have failed. The basic pension portion has characteristics of “non-differential” distribution—within the same region, residents who meet the eligibility conditions receive the same basic pension standard. Its link to individuals’ contribution tiers and years of contribution is weak. The incentive effect of “more you pay, more you get” and “the longer you pay, the more you get” is limited. Many farmers believe it is “the same whether you pay a lot or pay a little,” and they lack motivation for long-term contributions. Although in recent years some regions have optimized incentive mechanisms (such as increasing subsidies for higher-tier contributions and adding basic pensions for longer contribution years), overall, the incentive strength remains insufficient and has not fundamentally changed farmers’ understanding and behavior regarding contributions.

4. The adjustment mechanism is not健全. The basic pension lacks a normalized, institutionalized adjustment mechanism. In the past 13 years, it has only been increased four times, with limited increases and an unstable timetable. Catch-up contribution policies are also often restricted. Most regions do not allow people to upgrade and make additional catch-up payments for already-contributed years. Farmers who want to increase their personal account accumulation have “no way to upgrade.” Moreover, the second and third pillars—such as rural commercial endowment insurance, pension savings, and long-term care insurance—are almost blank, leading to an overreliance on a single basic pension as a backstop.

5. The current pension conversion method is not equal to farmers’ historical contributions and needs to be reasonably adjusted and re-evaluated. For a long time, farmers have accumulated original capital for national economic development through price scissors differences between industrial and agricultural products,保障 of food security, support of land factors, and a supply of low-cost labor.

From the perspective of historical contributions, during China’s process of industrialization and urbanization, farmers made fundamental, long-term contributions. However, compared with the urban employees’ endowment insurance, the rural elderly care security system started later and also lacks mechanisms for converting historical contributions such as deemed contribution years. As a result, no pension benefit determination method has been formed that sufficiently reflects historical contributions.

This situation of mismatch between historical contributions and pension benefits—combined with issues of fairness shortfalls—means that farmers’ pensions have clear historical arrears and a weakness in fairness, and this has become one major pain point: farmers’ pension levels are too low and their protection capacity is insufficient.

Zero One Finance: For a long time, there have been different views on whether to increase farmers’ pensions. Some people believe that farmers historically never paid into pensions, so there is no problem of increasing pensions now. Others have scholars who argue that farmers have their own homesteads and land, so elderly care is not an issue and there is no need to raise farmers’ pensions. Fang Yan, you have visited many rural areas. Do you think these views are reasonable?

Fang Yan: Improving farmers’ pensions has long had different voices. There are mainly two viewpoints among those who oppose:

The first viewpoint holds that urban residents’ pensions are paid in steadily over time by themselves. After retirement, of course they can withdraw the full amount to enjoy a comfortable old age. But farmers have never paid into endowment insurance costs, so naturally there is no issue of withdrawing a generous pension after retirement.

In fact, before 2006, farmers were required to pay agricultural taxes, commonly known as “public grain.” Back then, almost every town had grain stations. Each time during the season of harvest in autumn, farmers would pull carts piled with grain and hand over the public grain to support urban residents.

That means the state distributed and supplied the “public grain” it collected to support the urban population and sustain industrialization. In essence, farmers injected economic resources that could be allocated and reinvested into the state in the form of goods. Public grain could be converted into monetary amounts at the state’s acquisition price and market price at the time. It is a measurable fiscal contribution and can fully be regarded as farmers’ “implicit accumulation of assets,” with a solid theoretical basis for being converted, recognized, and compensated. The only difference is that the agricultural tax at that time was expressed in the form of tangible goods like grain, rather than as an unconditional donation.

Therefore, I believe that the “public grain” that farmers paid before 2006, in essence, is farmers’ long-term economic contribution and implicit accumulation to the state. It belongs to long-term accumulation that provided support for the state’s industrialization and urbanization. In economic terms, it can be fully converted into monetary value and falls within the category of cash assets.

The second viewpoint argues that the state has already given farmers homesteads and land, which equals “free housing plus survival security,” so they should not enjoy pensions additionally. Meanwhile, urban residents did not receive homestead and land security; the costs they paid earlier to buy a house should be compensated with pensions later.

At first glance, this view sounds reasonable, but it is fundamentally untenable. It confuses two completely different concepts of “security.” I believe that the homestead is collectively owned. It provides residents with housing security, not an asset, and certainly not a cash flow. Farmers only have the right to use it. They cannot freely buy and sell, cannot mortgage it, cannot list it for trading, and cannot even demolish their houses to sell them for money to buy food and medicine.

Most importantly, pensions are “people’s” security, not “housing” benefits. The essence of a pension is cash income that provides for workers’ lives in old age, and it has nothing to do with whether they have a house. Elderly farmers need cash to eat, buy medicine, see doctors, and purchase daily necessities. They cannot rely on bricks and concrete.

So we cannot use an “eligibility to reside” that cannot be monetized to offset elderly farmers’ cash reserves for a comfortable retirement. Nor can we use a “homestead” that cannot be eaten to offset farmers’ most basic cash-based elderly care needs—this is unfair.

Zero One Finance: Some scholars have expressed concern about increasing farmers’ pensions in the current stage. They believe that China’s economic strength has not yet reached the stage where farmers’ pensions can be raised substantially. Based on calculations related to the seventh national population census and analyses of recent trends in rural population aging, currently there are about 121 million elderly farmers aged 60 and above. This group accounts for 23.81% of the rural population, which is 7.99 percentage points higher than in urban areas. The base of elderly farmers is too large, and the state cannot afford it economically. Professor Zhang, as an expert who has worked in endowment insurance for a long time, how would you view this issue?

Zhang Dong: The essence of this issue is whether, at the current stage, improving farmers’ pensions has economic security and whether there is enough social wealth to support it. I believe that, based on China’s overall economic strength at present, improving farmers’ pensions still has the economic capacity, and the society’s overall wealth system is sufficient to support the payment of high pensions.

First, it is an objective fact that farmers’ pension benefits are too low. There is sufficient basis and necessity for continuously increasing them, but it is necessary to clarify the standard of “moderation.” This core point depends on the positioning of the basic endowment insurance system for urban and rural residents. The core positioning of China’s basic endowment insurance for urban and rural residents is to “secure basic needs.” This is both the original intention of the system and an important foundation for safeguarding the basic living of elderly farmers and realizing common prosperity. Under the guidance of the national strategy of common prosperity, enabling elderly farmers—who have made irreplaceable historical contributions to China’s industrialization and urbanization—to share the fruits of economic and social development is the proper meaning of system design and is also an inevitable requirement of social fairness. At the same time, we must also make it clear that “increasing” does not mean “a large-scale across-the-board raise,” but rather a moderate increase based on the principle of “securing basic needs.”

Currently, using the minimum living allowance standard as a reference for a moderate level has strong rationality, because the minimum living allowance standard itself is the bottom line for safeguarding residents’ basic living and aligns with the system’s positioning. In the long run, different regions can reasonably determine the upper and lower limits of “securing basic needs” by considering local economic development levels, fiscal affordability, and policy goals—neither lowering the protection bottom line nor exceeding the stage of development—so that farmers form stable expectations. This is also the core logic behind the continuous increase of basic pensions for urban and rural residents in 2026 and the insistence on “normalized micro-adjustments.”

Second, after clarifying the moderate standard for basic pensions, it is crucial to establish a scientific and normal adjustment mechanism. This is also the key to avoiding “one-time increases” and “blind increases,” and to achieving sustainable growth in benefits. Based on the country’s policy direction and local pilot experience, a normal adjustment mechanism should take into account two core factors in an integrated way:

One is the inflation rate, which is the foundation for ensuring that pension purchasing power does not erode, and ensuring that the basic living standard of elderly farmers does not decline due to rising prices.

Two is the wage growth rate or the growth rate of per-capita disposable income for urban and rural residents. This is to allow elderly farmers to share the fruits of economic development. Typically, it can choose around 50% of that growth rate. Combined with inflation, it forms the core logic for benefit adjustments.

This adjustment approach is not conceived out of thin air. At present, multiple provinces are already piloting and exploring it. It both takes into account fiscal affordability and achieves synchronous benefit growth with economic and social development, closely matching the national requirement to establish a normal adjustment mechanism for basic pensions for urban and rural residents.

Third, to judge whether the country can afford it, we can briefly calculate using the rural minimum living allowance standard as the base. It can clearly show that the fiscal pressure is fully controllable. Ensuring the basic old-age care for elderly farmers is an explicit responsibility of the state. If we use the rural minimum living allowance standard as the calculation benchmark, it can intuitively reflect the incremental fiscal pressure. At the end of 2024, the national average monthly rural minimum living allowance standard was 594 yuan. In 2026, the average monthly basic pension for elderly farmers will be 163 yuan. The difference is 431 yuan. Based on 121 million elderly farmers, the estimated additional annual fiscal subsidies would be about 625.8 billion yuan.

This amount accounts for 2.18% of the 28.74 trillion yuan national general public budget for 2025, and the GDP share is about 0.45%. It will not create an excessive fiscal burden. Coupled with the reality of implementing the 2026 basic pension increase, it proves that the state has the fiscal capacity to secure the bottom line of rural elderly care. The pressure from a moderate increase is fully controllable.

In short, a moderate rise in farmers’ pensions is both necessary and affordable for the national finances. We cannot deny the necessity of increasing pensions simply because the elderly-farmers base is large, and we also cannot blindly pursue “large-scale increases” detached from the stage of development. The key is to grasp three core points:

First, uphold the system’s positioning of “securing basic needs” and clearly set the standards for moderate adjustments;

Second, establish a normal adjustment mechanism that balances purchasing power and shared development outcomes, so that benefits can grow sustainably;

Third, reasonably divide fiscal responsibilities between the central and local governments. Adopt a “central government provides a backstop plus local governments share” model. The central government’s finance should focus on tilting toward weaker regions in central and western areas. Local finance should supplement based on its own capacity. Meanwhile, by replenishing funds through multiple channels such as transfers of state-owned capital returns, we can further strengthen protection capacity, so that 121 million elderly farmers truly achieve “aging with support and peace of mind,” and significantly enhance their sense of gain, happiness, and security.

Zero One Finance: As an NPC deputy, in your view, what impacts would the implementation of suggestions related to farmers’ pensions have on people’s livelihood protection, social stability, economic development, and social civilization in China? Can it truly promote a virtuous cycle of “improved people’s well-being, social harmony, and higher-quality economic development”?

Fang Yan: I believe providing farmers’ pensions has positive significance both for elderly people in rural areas and for the whole society—stimulating consumption, resolving elderly-care conflicts, and strengthening the foundation of the ruling.

First, for rural groups, it helps address the predicament of elderly care and improve quality of life and dignity.

For elderly rural residents, raising pension levels will directly improve their quality of life in old age. A stable monthly income can cover basic living expenses such as staple foods and oil and salt as well as utilities like water and electricity, alleviating the dilemma of “hard to see a doctor and hard to provide elderly care,” reducing reliance on children, and enhancing their autonomy and dignity in daily life. For rural families, reducing elderly-care burdens can effectively relieve family financial pressure, reduce family conflicts caused by elderly care, and promote harmony within rural families.

At the same time, measures proposed in relevant suggestions such as “deemed contributions” and “higher-age prioritization” will focus on protecting elderly groups who previously paid “public grain” or worked in compulsory labor, ensuring that these farmers who contributed to national development receive tangible compensation. This further enhances their sense of gain and belonging in rural communities.

Second, at the social level, it is beneficial for resolving elderly-care conflicts and promoting social harmony and stability.

If rural elderly-care problems remain unresolved for a long time, they will not only affect the quality of life of rural groups, but could also trigger a series of social conflicts, constraining social harmony and stability. The implementation of proposals related to farmers’ pensions can effectively resolve prominent contradictions in rural elderly care, reduce disputes caused by insufficient elderly-care security, and ease pressure on social governance.

At the same time, this measure can convey the philosophy of social fairness and justice, allowing the whole society to see that the state pays attention to and protects rural groups and vulnerable groups. It will strengthen the cohesion and centripetal force of the whole society, promote a good social ethos of “respecting and caring for the elderly, and mutual assistance,” and lay a solid foundation for social harmony and stability.

Third, from an economic perspective, it will help stimulate rural consumption, supporting expansion of domestic demand and the economic circulation.

Rural populations are an important component of China’s consumer market. However, due to insufficient elderly-care security, the consumption potential of rural elderly people has long been suppressed. An increase in farmers’ pension levels will directly raise rural elderly people’s disposable income, stimulate consumption demand, and drive the development of related industries such as rural daily necessities, medical and health care, and elderly-care services—thereby expanding the rural consumption market.

Meanwhile, increased demand for elderly care will also drive improvements in the rural elderly-care service system, creating industries such as elderly-care nursing and elderly-care facility construction. This can create new jobs, facilitate employment of rural labor, help rural economic development, and promote a “higher elderly-care security—consumption growth—industry development—more employment” virtuous economic cycle, injecting new momentum into China’s high-quality economic development.

Finally, at the national level, it helps strengthen the foundation of governance and gather development momentum.

Farmers are an important part of China’s population, and farmers’ well-being and good health are an important foundation for national development. When NPC deputies propose suggestions on farmers’ pensions and push them forward for implementation, it reflects the Party and the state’s deep care for farmers. It can further strengthen ties between the Party and the government with farmers and the general populace, and solidify the Party’s governing foundation.

At the same time, this measure can gather a collective force across the whole society to focus on rural areas, support rural areas, and develop rural areas. It will promote coordinated urban and rural development and the gradual realization of the goal of common prosperity, so that all people can share the fruits of development in the process of national development. It provides solid people’s livelihood security and a public base for building a modern socialist country in an all-round way.

Zero One Finance: Increasing farmers’ pensions is a major people’s livelihood project that combines social fairness, fiscal feasibility, and necessity for people’s lives. It is not only a solemn return for farmers’ historical contributions, but also helps open up a huge rural consumption market, further narrow the income gap between urban and rural areas, and reflect the core elements of mutual help and shared support in the socialist new era. It also lays a solid foundation for achieving the goal of common prosperity during the “15th Five-Year Plan for the next cycle” period. What specific measures and suggestions do you have for improving farmers’ pensions?

Gu Lei: First, as soon as possible, draft and formulate the “Regulations on Endowment Insurance for Urban and Rural Residents,” and clarify that a certain proportion of funds should be extracted from the net proceeds from each year’s land transfer, and injected into a “National Special Fund for Farmers’ Pension Security.” The funds should be used exclusively for that purpose to make up for insufficient fiscal resources in rural areas and improve the institutional rigidity and legal protection of the system.

Second, improve the pension benefit adjustment mechanism to enhance the system’s sustainability. Establish a normalized, institutionalized adjustment mechanism. Link adjustments to basic pensions with GDP growth, the growth of per-capita disposable income of rural residents, the rise in consumer prices, and the adjustment magnitude of pensions for urban employees. Also clarify the adjustment cycle (once every year or once every two years) and the adjustment magnitude. This will form predictable and operable rules, stabilize rural elderly people’s expectations for protection, and realize “small steps and quick running, with adjustments every year,” changing the past situation of “slow adjustments and low increases.” This will enhance farmers’ expectations for retirement and increase elderly farmers’ sense of happiness and security.

Specifically, three major goals need to be established:

First, establish a baseline standard for increasing farmers’ pensions. Clearly plan the farmers’ pension standards so that by 2030 they are not less than 1,000 yuan per month as the main reference target. Implement it in phases: based on the current farmers’ basic pension level, add 200 yuan each year for four consecutive years, so that by 2030 the accumulated pension can reach not less than 1,000 yuan per month.

Second, establish an agricultural service age subsidy. For farmers who have engaged in agricultural labor for more than 30 years, add a “historical contribution service-year subsidy,” accumulating 10–15 yuan per year and crediting it into the monthly pension.

Third, establish higher-age prioritization. For elderly farmers aged 80 and above, on top of the basic pension, uniformly increase benefits by no less than 30%.

Third, improve the fiscal sharing mechanism and increase support for central and western regions. It is recommended to adjust the ratio of fiscal sharing between the central and local governments. For less developed central and western regions, revolutionary old base areas, and rural impoverished areas, increase the proportion of central fiscal subsidies and reduce the fiscal matching pressure on local governments. Set up a special fund for regional balanced development of rural pensions, focusing on raising standards in low-standard areas, and gradually narrowing the benefits gap between eastern, central, and western regions. The purpose is to promote equalization of basic public services. Include farmers’ pension standards in local government performance assessments, forcing local governments to pay more attention to rural elderly-care security. Encourage developed eastern regions and less developed central and western regions to establish assistance mechanisms. Through shared funding, technology, and experience, promote coordinated development of rural pension systems and break regional benefit segmentation.

Fourth, establish a coordinated mechanism for elderly care and medical security. Further improve reimbursement policies for rural residents’ medical insurance, increase reimbursement proportions for chronic and common diseases, and reduce out-of-pocket costs. Reduce the phenomenon of pensions being squeezed by medical expenditures. In reality, “pensions being squeezed by medical spending” and “the dual pressures of elderly care and medical care” are common phenomena among rural elderly groups. Therefore, what we explore today—establishing a linkage mechanism between pensions and medical insurance subsidies—is to provide additional subsidies to elderly rural residents who are of very advanced age or have serious illnesses, easing the dual pressure of “elderly care + medical care” and addressing the problem of farmers “spending all their pension on medicine.” This has practical significance.

Finally, strengthen policy coordination effects and broaden funding channels. For example, link the pace of improving farmers’ pension standards with rural revitalization. Use the extent of narrowing regional gaps in pensions for urban and rural residents as one of the core indicators for assessing local governments’ efforts to advance common prosperity. The key is to transform pension standard increases—from a single people’s livelihood protection measure—into a comprehensive policy tool that drives rural industries, governance, and consumption. This enables a virtuous cycle of “protecting people’s livelihoods—activating rural areas—feeding back into protection,” accelerating the construction of a multi-tier, sustainable, and fairer rural elderly-care security system.

Of course, increasing farmers’ pensions is not simply a matter of raising the monthly basic pension amount. It is not a “one-and-done” effort. It requires fully improving the structure of the protection system and comprehensively building support across multiple tiers for elderly care—for example, promoting the development of the second and third pillars, increasing policy support for rural commercial endowment insurance, and encouraging insurance companies to offer low-cost, simplified pension products suitable for rural residents, lowering enrollment barriers. Promote rural pension savings and pension wealth-management products to guide farmers to actively accumulate pension funds, forming a multi-tier pension security system of “the first pillar provides a backstop, and the second and third pillars supplement.”

In addition, increase investment in rural elderly-care service facilities. Building day-care centers and rural welfare homes is also very important. Society should provide professional nursing staff to offer care services for rural empty-nest elderly, elderly people living alone, and those with disabilities or severe care needs. Recently, eight departments including the National Healthcare Security Administration, the Ministry of Civil Affairs, the Ministry of Agriculture and Rural Affairs, the National Health Commission, the State Taxation Administration, and the China Disabled Persons’ Federation jointly issued the “Opinions on Accelerating the Establishment of a Long-Term Care Insurance System.” This aims to cover rural areas with a long-term care insurance system, focusing on supporting rural elderly people who are disabled or semi-disabled, reducing family care burdens, encouraging social forces to participate in rural long-term care services, and improving the professionalism of care.

In summary, I believe that to resolve the pain points in farmers’ pension systems, we must adhere to the principles of “securing basic needs, promoting fairness, strengthening incentives, and ensuring sustainability.” We must coordinate fiscal input, system design, and service supply. Link pension benefits with elderly-care services: provide appropriate subsidies to elderly people who choose institutional elderly care or home-based care, achieving dual coverage of “funding security + service security.”

We must both solve the current real problems that rural elderly people face—“hard to obtain elderly care and low benefits”—and also plan for the long term to build a multi-tier, sustainable rural elderly-care security system. This will allow rural elderly groups to share the fruits of economic and social development, enabling “aging with support, aging with proper medical care, and aging with peace of mind.”

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