Three Deductions and Five Charges: Collection and Use of Collective Funds

“Three Deductions and Five Charges (sān tí wǔ tǒng)” is not an existing term but rather a commonly accepted name that is short for three village deductions and five township charges. The 1992 “Regulations on the Burden of Costs and Labor Management by Farmers” clearly defined the specific content of village deductions and township charges. Among this content, village deductions include three items: public reserve funds, public welfare funds, and management fees. The five township charges are fees paid by farmers to the township-level government for two-level rural education, one-child policy, military privileges and pensions, military training, and the construction of rural roads and other public welfare undertakings. Historically, the generation of these fees has rational and internal logic, especially for the “Three Deductions,” which have always been accompanied by cooperative organizations. However, with the development of these times, especially with respect to the reform of the township system, these reforms gradually became the root of the farmers’ burden. With the further increase in rural system reforms, especially the abolition of agricultural taxes and the reform of township fiscal systems, these reforms gradually disappeared throughout history. However, they were once a major issue that Chinese farmers had to face, even becoming the root of their heartache.