But this year, some areas have abandoned the practice and are instead only paying the local market price, which is invariably much lower. The central government has tried to relieve the crisis by hiking its guide price for some crops by 10 per cent and in some cases by 30 per cent, but to little effect. Their disillusionment is even shared by some local officials. When the central government orders higher grain prices, it is the local governments which have to find the funds. Qipan, like other rural administrations, is bankrupt and deeply in debt.
Many local governments can barely find the resources to pay their staff wages.
The state Agricultural Bank is now reluctant to hand out more loans to bail out local governments. Instead they are now forced to borrow elsewhere and pay exorbitant interest rates. The whole structure of rural credit has collapsed in the crisis, with the central Government, in deficit itself, unwilling to direct funds away from its top priority, the rescue of state-owned enterprises. And Li Changping will no longer be in a position to help the peasants of Qipan. Locals say that after his controversial letter to the Premier, local cadres persecuted him so much that his wife threatened to divorce him unless they left the area.