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Regulations on Conversion of Farmland to Forests

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(Adopted at the 66th Executive Meeting of the State Council on December 6, 2002, promulgated by Decree No. 367 of the State Council of the People's Republic of China on December 14, 2002, and effective as of January 20, 2003)

Chapter I General Provisions

Article 1 These Regulations are formulated for the purposes of standardizing conversion of farmland to forests, protecting the lawful rights and interests of those who convert their farmland to forests, consolidating the achievements made in conversion of farmland to forests, optimizing the structure of rural industries and improving the ecologic environment.

Article 2 These Regulations are applicable to conversion of farmland to forests covered by the planning approved by the State Council.

Article 3 The people's governments at all levels shall strictly implement the policies and measures of "converting farmland to forests, closing mountains for greening, providing grain as relief and making contracts with individuals."

Article 4 Top priority shall be put on ecology in conversion of farmland to forests. Conversion of farmland to forests shall be combined with the restructuring of rural industries, development of rural economy, control of soil and water erosion, conservation and development of capital farmland, increase of per unit area yield, enhancement of rural energy development and eco-driven immigration.

Article 5 The following principles shall be abided by in conversion of farmland to forests:

(1) overall planning, phased implementation and due attention to emphasis and actual effect;

(2) integration of policy guidance and willingness of farmers to convert farmland to forests, and a policy of "those who convert, plant and manage receive the benefit";

(3) following the natural law and adjusting measures to local conditions, planting trees or grass on right sites, and managing in a comprehensive manner;

(4) putting equal emphasis on new conversion and protection of converted land with an aim of preventing possible damage that happens in the progress of conversion;

(5) gradually improving the living conditions of those who convert their farmland to forests.

Article 6 The institution of western development of the State Council is responsible for the overall coordination in conversion of farmland to forests, organizes relevant sectors for the study and formulation of policies and methods related to conversion of farmland to forests, and organizes and coordinates implementation of the overall planning of conversion of farmland to forests; the competent forestry administrative department of the State Council is responsible for compilation of the overall planning and the annual plan for conversion of farmland to forests, superintends the nationwide implementation of conversion of farmland to forests, and is responsible for guidance, supervision and inspection of conversion of farmland to forests; the development planning department of the State Council, jointly with other departments concerned, is responsible for examination of the overall planning for conversion of farmland to forests, collection of plans, compilation and aggregate balancing of the annual capital construction plan; the competent finance administrative department of the State Council is responsible for arrangement, supervision and management of subsidies provided by the Central Government for conversion of farmland to forests; the competent agriculture administrative department of the State Council is responsible for compilation of the related planning and plans of conversion of reclaimed grassland to grass and rehabilitation and development of natural grassland, and provides technical guidance and conducts inspection therefor; the competent water resources administrative department of the State Council is responsible for technical guidance and inspection of watershed management and soil and water conservation in the areas being converted to forests and grassland; the grain administrative department of the State Council is responsible for the coordination and redistribution of grain resources.

The administrative departments for forestry, development planning, finance, agriculture, water resources and grain of the local people's governments at or above the county level are, in accordance with these Regulations and their respective duties, responsible for the work related to conversion of farmland to forests under the unified leadership of the people's government at the same level.

Article 7 The State applies the system under which the people's governments of provinces, autonomous regions and municipalities directly under the Central Government shall assume the responsibility for conversion of farmland to forests. The people's governments of provinces, autonomous regions and municipalities directly under the Central Government shall designate relevant departments to take measures to ensure that the subsidies granted by the Central Government for conversion of farmland to forests are exclusively used for the set purposes, organize redistribution and provision of grain subsidy, strengthen reexamination of conversion of farmland to forests, fulfill the tasks in conversion of farmland to forests assigned by the State on schedule, and set up objective and responsibility and sign responsibility agreement level by level to achieve the objective of conversion of farmland to forests.

Article 8 The objective and responsibility system shall be applied in conversion of farmland to forests.

The relevant departments of local people's governments at or above the county level shall sign responsibility agreements with the leaders and technical persons in charge of conversion of farmland to forests, which define the responsibilities assumed by them respectively.

Article 9 The State supports research and extension of applied technology for conversion of farmland to forests, so as to enhance the scientific and technological capacity.

Article 10 The relevant departments of the State Council and local people's governments at all levels shall organize and undertake publicity and educational activities in respect of conversion of farmland to forests, so as to enhance the public awareness on conservation and improvement of environment.

Units or individuals who make remarkable achievements in conversion of farmland to forests are to be cited and rewarded by the relevant departments of the State Council and the local people's governments at all levels.

Article 11 All units and individuals shall have the right to report or charge against any act causing damage to conversion of farmland to forests.

The relevant people's governments and their related departments shall promptly handle such report or charge upon receipt.

Article 12 Auditing institutions at all levels shall strengthen auditing supervision over the use of funds and grain subsidized for conversion of farmland to forests.

Chapter II Planning and Plan

Article 13 Conversion of farmland to forests shall be planned in an overall way.

The overall planning for conversion of farmland to forests shall be compiled by the competent forestry administrative department of the State Council and, after coordination of the institution of western development of the State Council and being reviewed by the development planning department of the State Council, submitted to the State Council for approval before implementation.

The competent forestry administrative department of the people's government of a province, autonomous region or municipality directly under the Central Government shall, according to the overall planning for conversion of farmland to forests and together with other relevant departments, compile the planning for conversion of farmland to forests within its administrative area and submit it to the relevant department of the State Council for the record after being approved by the people's government at the same level.

Article 14 A planning for conversion of farmland to forests shall include the following main contents:

(1) scope, layout and key issues;

(2) duration, objectives and tasks;

(3) investment estimation and sources of funds;

(4) benefit analysis and assessment; and

(5) supporting measures.

Article 15 The following farmland shall be covered by the planning for conversion of farmland to forests, and be converted to forests in a planned manner according to the ecological development requirements and the State financial resources:

(1) those seriously affected by soil and water erosion;

(2) those seriously affected by sandy desertification, salinization or rocky desertification; and

(3) those of ecological importance but with low and unstable grain yield.

Steep slope farmland in river headwater regions and on both sides of river valleys, those around the lakes and reservoirs, as well as farmland in regions of ecological importance subject to serious soil and water erosion and grave windy and sandy jeopardy shall be put on top priority in the planning for conversion of farmland to forests.

Article 16 Farmland covered by capital farmland conservation programmes and farmland that has relatively good productive conditions with grain yield exceeding the State standard for grain subsidy for conversion of farmland to forests and that has no potential cause of soil and water erosion shall not be covered by the planning for conversion of farmland to forests. However, the farmland may be covered by the planning for conversion of farmland to forests if, for specific ecological conservation purpose, it has been excluded from the capital farmland conservation programme after approval by the State Council and in accordance with the procedures as stipulated in the relevant laws and administrative regulations.

The long-term livelihood requirements of the farmers whose farmland has been converted shall be taken into consideration in the compilation of the planning for conversion of farmland to forests.

Article 17 The planning for conversion of farmland to forests shall be linked with the national economic and social development programme, the overall planning of the rural economic development and the overall planning of land-use, and shall be in coordination with the planning of environmental protection, soil and water conservation and desertification control.

Article 18 Conversion of farmland to forests shall be carried out in accordance with the approved planning. No unauthorized change may be made to the planning for conversion of farmland to forests without the agreement of the original approval organ thereof.

Article 19 The competent forestry administrative department of the people's government of a province, autonomous region or municipality directly under the Central Government shall, according to the planning of conversion of farmland to forests and jointly with relevant departments, compile a proposal on the annual plan for conversion of farmland to forests within its administrative area for next year and upon approval of the people's government at the same level after being reviewed by the development planning department of the people's government at the same level, submit the proposal to the institution of western development, the forestry department and the development planning department of the State Council before August 31st every year. The competent forestry administrative department of the State Council shall, based on the proposals it has collected, compile a proposal on the national annual plan for conversion of farmland to forest, which, upon approval of the State Council after being coordinated by the institution for western region development of the State Council and examined and balanced by the development planning department of the State Council, shall be issued before October 31st by the development planning department of the State Council jointly with relevant departments.

The development planning department of the people's government of a province, autonomous region or municipality directly under the Central Government shall, jointly with relevant departments and based on the national annual plan for conversion of farmland to forest, break down the annual plan for conversion of farmland to forests within their respective administrative areas for next year and assign to relevant people's governments of counties (cities) before November 30th, and submit a report on the breakdown and assignment to the relevant departments of the State Council for the record.

Article 20 The competent forestry administrative department of the people's government of a province, autonomous region or municipality directly under the Central Government shall, according to the plan for conversion of farmland to forests issued by the State for next year and jointly with the relevant departments, compile the annual implementation plan for conversion of farmland to forests within its administrative area, which, after being reviewed by the competent forestry administrative department of the State Council, shall be submitted to the people's government at the same level for approval.

The competent forestry administrative department of the people's government at the county level may, according to the approved provincial annual implementation plan for conversion of farmland to forests, compile the annual implementation plan for conversion of farmland to forests within its administrative area, which shall be submitted to the people's government at the same level for approval, and shall be reported to the competent forestry administrative department of the people's government of the province, autonomous region or municipality directly under the Central Government for the record.

Article 21 An annual implementation plan for conversion of farmland to forests shall include the following main contents:

(1) specific region of conversion of farmland to forests;

(2) proportion of ecological forest and cash forest;

(3) species selection and vegetation structure;

(4) afforestation mode;

(5) supply method of seeds and seedlings;

(6) management and protection of vegetation with supplementary and supporting measures; and

(7) project director and technical persons in charge.

Article 22 The competent forestry administrative departments of the people's governments at the county level shall designate professional staff or qualified designing units to compile operation design at the town and township level according to the annual implementation plan for conversion of farmland to forests, and associate the content defined in the implementation plan with the specific piece of land and the land management contractors.

In compiling the operation design, attention has to be paid to the arid and semi-arid regions where drought resistant species of shrub (grass) shall be planted and rehabilitation of original vegetation shall be made; perennial plants shall be used if intercropping pattern is adopted, and the initial planting density of the main tree species shall conform to the standards set by the State.

Article 23 The area of ecological forest to be established on converted farmland, with a county as an accounting unit, shall not be less than 80% of the total area of the converted farmland.

The ecological forest established on the converted farmland shall be verified by the competent forestry administrative department of the local people's government at or above the county level in accordance with the standard set by the competent forestry administrative department of the State Council.

Chapter III Afforestation, Management, Protection, Inspection and Acceptance

Article 24 The people's governments at the county level or the people's governments at the township level entrusted thereby shall sign contracts for conversion of farmland to forests with land management contractors assigned with tasks of conversion of farmland to forests.

The contract for conversion of farmland to forests shall include the following main contents:

(1) region and its area of the farmland to be converted to forests, and the region and its area of the wasteland and barren hills suitable for afforestation;

(2) pattern of the farmland conversion as defined in the operation design;

(3) survival rate of planted seedlings and the rate of up-to-standard planted area;

(4) management and protection responsibilities;

(5) the norm and time of subsidy, as well as the methods of disbursement of funds and grain subsidy;

(6) methods and contents of technical guidance and technical service;

(7) seed and seedling sources and the way of supply;

(8) liability for breach of contracts; and

(9) duration of fulfillment of the contract.

The contents of the contract for conversion of farmland to forests shall not contravene these Regulations and other provisions of the State on conversion of farmland to forests.

Article 25 The seeds and seedlings required for conversion of farmland to forests may be purchased by the people's governments at the county level in the way of centralized purchase in the light of their respective actual conditions, or by those who convert their farmland to forests on their own. In case of centralized purchase, opinions of those who convert their farmland to forests shall be solicited and taken into consideration, the way of open bidding shall be adopted, and written contracts shall be signed. The extra cost exceeding the State standard of subsidy for seed and seedling for afforestation shall not be forcedly collected from those who convert their farmland to forest.

No unit or individual may designate seed and seedling providers for those who convert their farmland to forests.

The monopoly of seeds and seedlings and the bidding up of seed and seedling prices are prohibited.

Article 26 The seeds and seedlings used for conversion of farmland to forests shall be produced locally and redistributed to adjacent areas, and priority shall be given to indigenous species and superb seeds and seedlings with high resistance properties in the selection of seeds and seedlings.

Article 27 The competent administrative departments for forestry and agriculture shall improve technical guidance for production of seeds and seedlings and strengthen the management of service to ensure the quality of the seeds and seedlings.

The seeds and seedlings sold and supplied for conversion of farmland to forests shall pass the inspection by the competent administrative departments for forestry and agriculture of the people's governments at the country level, and be attached with labels and quality inspection certificates; those redistributed across counties shall also acquire quarantine certificates according to law.

Article 28 The people's governments of the provinces, autonomous regions or municipalities directly under the Central Government shall strengthen the construction of seed and seedling production bases and seed collection bases in accordance with the planning for conversion of farmland to forests within their respective administrative areas.

The State encourages the multiple ways of seed and seedling production and industrialized management taken by enterprises and individuals.

Article 29 Those who convert their farmland to forests shall plant trees and grass in accordance with the provisions of the operation design and the contract.

Intercropping grain crops in between trees or acts of damaging the existing tree and grass vegetation are prohibited.

Article 30 Those who convert their farmland to forests shall afforest barren hills and wasteland suitable for afforestation in accordance with the provisions of the operation design and the contract during the period when they receive the funds and grain subsidy.

Article 31 The people's government at the county level shall establish the system for vegetation management and protection of converted farmland in order to fulfill the management and protection duties.

Those who convert their farmland to forests shall perform the obligation of management and protection.

Reclamation of converted farmland in the areas designated for conversion of farmland to forests and conduction of the activities in such areas which are likely to damage surface vegetation, such as illegal felling or digging, are prohibited.

Article 32 The local people's governments at all levels and their subordinate departments concerned shall assign technical extension units or technical staff for the provision of technical guidance and technical service to conversion of farmland to forests.

Article 33 The competent forestry administrative departments of the people's governments at the county level shall inspect and accept the project of conversion of farmland to forests in accordance with the standard and methods for inspection and acceptance set by the competent forestry administrative department of the State Council, and acceptance certificate shall be granted if the results of inspection are up to the standard.

Article 34 The people's governments of the provinces, autonomous regions or municipalities directly under the Central Government shall execute reexamination on the outcome of the county-level inspection and acceptance of conversion of farmland to forests, and offer reward to or impose punishment on the county-level people's governments and the responsible persons concerned according to the outcome of the reexamination.

The competent forestry administrative department of the State Council shall review the outcome of the provincial-level reexamination, and report to the State Council the findings of its review.

Chapter IV Funds and Grain Subsidies

Article 35 The State shall provide land management contractors with grain subsidy, seed and seedling subsidy for afforestation and living allowance according to the verified actual area of converted farmland. Specific standard and duration for such subsidies and allowance shall be subject to the relevant provisions of the State Council.

Article 36 For slope farmland not yet being contracted to households and slope farmland in fallow to be converted to forests, as well as plantable barren hills and wasteland listed in the planning of conversion of farmland to forests, only the seed and seedling subsidy for afforestation shall be granted.

Article 37 Seed and seedling subsidy for afforestation and living allowance shall be timely verified, allocated and distributed by the departments for development planning, finance and forestry of the State Council in accordance with the relevant provisions.

Article 38 Subsidized grain shall be allocated and transported from nearby places to shorten the supply chains and reduce the supply costs. Grain subsidy fee shall be subject to relevant policies of the State.

Costs for allocation and transportation of grain shall be borne by local treasury; enterprises providing subsidized grain and those who convert their farmland to forests shall not be required to share these costs.

Article 39 The people's governments of the provinces, autonomous regions and municipalities directly under the Central Government shall decide the varieties of subsidized grain on the basis of local custom of food consumption, traditions of crop growing and actual situation of local grain stockpiles.

Subsidized grain shall meet the State quality standard. Grain that is not up to the State quality standard shall not be provided to those who convert their farmland to forests.

Article 40 In the first year of conversion of farmland to forests, the subsidized grain for that year may be disbursed twice, and the amount of each time shall be decided by the people's government of the province, autonomous region or municipality directly under the Central Government.

Starting from the second year of conversion of farmland to forests and within the stipulated duration of subsidies, the people's governments at the county level shall assign related departments and units to disburse the annual subsidized grain in a lump sum to those who convert their farmland to forests and hold the inspection and acceptance certificates.

Article 41 Subsidized grain shall not be converted into cash or coupons in disbursement. The enterprises providing subsidized grain shall not repurchase the subsidized grain.

Article 42 Seed and seedling subsidy for afforestation shall be used for purchasing seeds and seedlings and the surplus may be used for afforestation, mountain closure and tending practices.

Where those who convert their farmland to forests purchase seeds and seedlings on their own, the people's government at the county level or the people's governments at the township level entrusted by it shall pay off in a lump sum the seed and seedling subsidy for afforestation upon the entry-into-force of land conversion contracts.

Where seeds and seedlings are purchased in the way of centralized purchase, the units responsible for seed and seedling purchase shall settle the seed and seedling subsidy accounts with those who convert their farmland to forests after the converted farmland are inspected and accepted.

Article 43 After conversion of farmland to forests is completed, within the stipulated duration of subsidizing, the people's governments at the county level shall instruct relevant departments to pay off in a lump sum the living allowance for that year to those who convert their farmland to forests and hold the inspection and acceptance certificates.

Article 44 Funds for conversion of farmland to forests shall be deposited in a special account and exclusively used for the set purpose. No unit or individual may illegally occupy, intercept, misappropriate or dock the funds.

No unit or individual may make falsifications or fake reports to falsely claim subsidized funds or grain.

Article 45 Preparation cost and scientific and technical supporting cost for conversion of farmland to forests shall be proportionally subsidized by the State in the investment for capital construction for conversion of farmland to forests and be allocated by the development planning department of the State Council in line with the progress.

The costs for the inspection, acceptance and disbursement by various localities in conversion of farmland to forests shall be borne by the local treasury. The costs for examinations by the relevant departments of the Central Government shall be borne by the State treasury.

Article 46 A publication system shall be established at each township (town) and village where conversion of farmland to forests is carried out, making public such information as area of conversion, tree species for afforestation, survival rate and the details about the distribution of funds and grain subsidies.

Chapter V Other Supporting Measures

Article 47 The State shall protect the ownership of forests (grass) on the converted land enjoyed by those who convert their farmland to forests. For those who convert their farmland to forests on their own, the land management contractors have the ownership of the forests (grass) on the converted land. For persons converting farmland on commission of or in collaboration with other persons, the ownership of the forests (grass) on the converted land shall be determined as agreed in the contract.

Once farmland being converted to forests, the people's government at or above the county level shall issue forests (grass) ownership certificates in accordance with the relevant provisions of the Forestry Law or the Grassland Law to confirm the ownership and usufruct, and go through registration procedures for the change of land-use according to law. The land management contracts must be adjusted accordingly.

Article 48 The period of the contracted land management right may be extended to 70 years after the farmland being converted to forest. Upon the expiration of such period, land management contractors may renew their contracts according to the provisions of the relevant laws and regulations.

The contracted land management right of converted farmland or afforested barren hills and wasteland may be inherited and transferred according to law.

Article 49 Those who convert their farmland to forests are entitled to enjoy the preferential treatment in taxation according to the relevant provisions of the State, and the income obtained from special agricultural products after the farmland being converted to forests (grass) shall be exempted from special agricultural product tax according to the provisions of the State.

In case the counties (cities) where conversion of farmland to forests is carried out suffer from disasters, they shall be subsidized for the decrease in agriculture tax revenue by the treasury at a higher level in a manner of transfer payment; for those counties (cities) with real difficulties, appropriate subsidies shall be granted by the State treasury in a manner of transfer payment upon approval by the State Council.

Article 50 Upon expiration of the duration for granting funds and grain subsidies, those who convert their farmland to forests may, upon approval of the relevant competent departments, harvest the trees owned by them according to law, provided that such harvesting does not cause damage to the overall ecological functions.

Article 51 Local governments at various levels shall strengthen construction of capital farmland and agricultural infrastructure, increase investment, meliorate soil and slope farmland, improve land fertility and increase yield of per unit area with an aim to meet, in the long run, the demands for grain rations by those who convert their farmland to forests.

Article 52 Local governments at various levels shall, in the light of the actual situation, strengthen the rural energy construction in respect of biogas, small-scale hydropower, solar energy and wind energy to meet the demands for energy by those who convert their farmland to forests.

Article 53 Local governments at various levels shall adjust rural industrial structures, support leading enterprises, develop mainstay industries, explore employment opportunities, increase farmers' income, speed up development of small cities and towns, and smooth the progress of the gradual transfer of agricultural population to urban areas.

Article 54 The State shall encourage eco-driven immigration during conversion of farmland to forests and provide proper subsidies for the immigrating households for their production and living facilities.

Article 55 After conversion of farmland to forests is completed, the relevant local people's governments shall take measures including mountain closure, banning of grazing, and captive breeding to protect the achievements made in conversion of farmland to forest.

Article 56 Conversion of farmland to forests shall be combined with the policies and measures for poverty alleviation through development, integrated agricultural development and soil and water conservation. All the project funds, regardless of their kinds, shall be taken into overall arrangement under the precondition that the funds be exclusively used for the set purpose so as to increase benefits of funds.

Chapter VI Legal Liability

Article 57 Where a State functionary, in violation of these Regulations, commits one of the following acts in conversion of farmland to forests, he shall be investigated for criminal liability according to the provisions of the criminal law on the crime of corruption, the crime of accepting a bribe, the crime of misappropriating public funds or other crimes; if his act is not serious enough for criminal punishment, he shall be given an administrative sanction according to law:

(1) illegally occupying, intercepting or misappropriating the funds for conversion of farmland to forests, or docking the subsidized grain;

(2) making falsifications or fake reports to falsely claim subsidized funds or grain;

(3) taking advantages of his office to accept other persons' money, property or other benefits.

Any person other than State functionaries who commits any act in Item (2) in the preceding paragraph shall be investigated for criminal liability according to the provisions of the criminal law on the crime of fraud or other crimes; if his act is not serious enough for criminal punishment, the competent forestry administrative department of the people's government at or above the county level shall order him to return those falsely claimed funds or grain and impose a fine of not less than two times but not more than five times of the amount of the falsely claimed funds.

Article 58 Where a State functionary, in violation of these Regulations, commits one of the following acts in conversion of farmland to forests, the unit he belongs to or the competent department at the next higher level shall order him to make corrections within a specified time limit and to return the funds shared and overcharged; the persons directly in charge and other directly responsible persons shall be investigated for criminal liability according to the provisions of the criminal law on the crime of power abuse, the crime of neglect of duty or other crimes; those whose acts are not serious enough for criminal punishment shall be given administrative sanctions according to law:

(1) failing to handle in time the reports or charges against destruction of conversion of farmland to forests;

(2) requiring enterprises providing subsidized grain or those who convert their farmland to forests to share the costs for allocating and transporting the subsidized grain;

(3) failing to disburse in time the subsidized grain and living allowance to those who convert their farmland to forests and hold the acceptance certificates;

(4) failing to pay off in a lump sum seed and seedling subsidies in time to those who convert their farmland to forests and purchase the seeds and seedlings on their own upon entry-into-force of the land conversion contracts;

(5) failing to, after the converted farmland is inspected and accepted, settle the seed and seedling subsidy accounts with those who convert their farmland to forests and purchase the seeds and seedlings in the way of centralized purchase;

(6) the seeds and seedlings purchased in the way of centralized purchase are not up to the standard;

(7) forcedly charging those who convert their farmland to forest, in the centralized purchases of seeds and seedlings, seed and seedling fee in excess of the standard for seeds and seedling subsidy set by the State;

(8) designating seed and seedling suppliers for those who convert their farmland to forests;

(9) approving grain enterprises to provide subsidized grain which is not up to the State quality standard to those who convert their farmland to forests, or to convert subsidized grain into cash or coupons;

(10) failing to perform his duties in accordance with these Regulations in other manners.

Article 59 Anyone who takes unfair measures to monopolize seed and seedling markets, or bid up seed and seedling prices, shall be investigated for criminal liability according to the provisions of the criminal law on the crime of illegal business operation, the crime of forced transaction or other crimes; those whose acts are not serious enough for criminal punishment shall be punished according to the Law Against Unfair Competition by the administrative department for industry and commerce; if there is no corresponding provision in the Law Against Unfair Competition, a fine of not less than two times but not more than five times of the amount of the illegal turnover shall be imposed by the administrative department for industry and commerce.

Article 60 Anyone who sells or provides seeds and seedlings without passing the inspections or without labels, quality inspection certificates of or quarantine certificates shall be investigated for criminal liability according to the provisions of the criminal law on the crime of manufacturing or selling fake or substandard seeds or other crimes; those whose acts are not serious enough for criminal punishment shall be punished according to the Seed Law by the competent administrative department for forestry or agriculture or by the administrative department for industry and commerce of the people's government at or above the county level; if there is no corresponding provision in the Seed Law, a fine of not less than two times but not more than five times of the amount of the illegal turnover shall be imposed by the competent administrative department for forestry or agriculture of the people's government at or above the county level.

Article 61 Where any enterprise providing subsidized grain provides to those who convert their farmland to forests subsidized grain that is not up to the State quality standard, the grain administration department of the people's government at or above the county level shall order such enterprise to make corrections within a specified time limit, and may impose a fine of not more than one time of the amount of the product by multiplying the quantity of illegally provided subsidized grain by the unit price of standardized grain for food consumption.

Where any enterprise providing subsidized grain converts subsidized grain into cash or coupons or repurchases subsidized grain, the grain administration department of the people's government at or above the county level shall order such enterprise to make corrections within a specified time limit, and may impose a fine of not more than one time of the amount of the cash or coupons converted or the money paid for the grain repurchased.

Article 62 Where those who convert their farmland to forests reclaim farmland converted, intercrop grain crops in between trees, illegally cut or fell trees or dig within the area designated for conversion of farmland to forests or commits other acts damaging surface vegetation, they shall be investigated for criminal liability according to the provisions of the criminal law on the crime of illegal occupation of farmland, the crime of illegally felling trees or other crimes; those whose acts are not serious enough for criminal punishment shall be given administrative sanctions according to the Forest Law, the Grassland Law and the Law of Water and Soil Conservation by the competent administrative departments for forestry, agriculture or water resources of the people's government at or above the county level.

Chapter VII Supplementary Provisions

Article 63 The implementation of converting reclaimed grassland and rehabilitating and improving natural grassland shall be subject to the Grassland Law and the relevant provisions of the State Council.

The implementation of watershed management and water and soil conservation within the regions where farmland is converted to forests or grassland shall be subject to the Law of Water and Soil Conservation and the relevant provisions of the State Council.

Article 64 Where local governments at various levels decide to convert land outside the scope approved by the State Council, the subsidies of the Central Government specified in these Regulations shall not be granted therefor.

Article 65 These Regulations shall be effective as of January 20, 2003.

(This English version is for your reference only.In case any discrepancy exists between the Chinese and English context, the Chinese version shall prevail.)

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