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Co-operatives show the new face of rural China

Burly and dressed in an ill-fitting western suit, 50-year-old Chen Yangui is the epitome of the modern farmer with Chinese characteristics.

His business card features a photo of himself, a second photo of soybeans, and a website with an address that translates as “Soybeans and Potatoes Dot Com.”

Chen’s “Country Fellow Co-operative” has mobilized a million villagers in a giant soybean co-operative that pools enough land to allow machine harvesting and collective purchases of seed and fertilizer.

Organizations like Chen’s should benefit from reforms approved by China’s top leaders Oct. 13 designed to increase economies of scale, double disposable rural incomes by 2020, and spur investment in the populous countryside.

“A co-operative is the best way to utilize farmland and raise productivity,” said Chen in a booming voice. “It’s more efficient than before, when each family owned a small piece of land and looked after everything from seed and production to sales.”

Rural reform was the top item of discussion in the four-day meet ing that set policy direction for the next several years. Rural incomes have lagged growth in China’s booming cities, and rural protests over land seizures, abuse by local officials, and other complaints are a worry for the ruling Communist Party.

Innovations are expected to include allowing rural households to consol idate land by buying or selling leases. Supporters of the reforms say they will raise productivity and promote rural agribusiness, which in turn will stem urban migration and bolster rural incomes and consumption.

Under Chinese law, farmland is formally owned by village collectives, effectively giving control to local governments. But households farm land on long-term leases under reforms first introduced nearly 30 years ago under Deng Xiaoping.

Rural collectives

That change ended decades of hardship in rural collectives that Mao Zedong hoped would nurture fiercely egalitarian communism. The collectives brought together thousands of farmers who laboured for work points, with produce taken by the state for little compensation.

The government still guarantees minimum grain prices. But farmers mostly run their own plots and sell produce at markets.

Still, hundreds of millions have fled grinding labour on small plots for the comparatively higher wages in China’s burgeoning cities. Low efficiency and shrinking farmland have begun to threaten the country’s food security.

Villages in Chen’s co-operative in Heilongjiang enjoyed relatively big leaseholds of 24 mu (15 mu = 1 hectare) of farmland per family. But in the hilly, rice-growing south, family plots of less than three mu are common. China’s average of 0.09 ha of farmland per capita is less than half of the world average.

“It’s impossible for farmers to become rich on such small parcels of land,” said Huang Hongxiang, researcher with the China Academy of Agricultural Sciences. “It only makes a difference to their income if they grow on 1,000 mu rather than one or 10 mu.”

Each household in Chen’s co-operative earned 70,000 to 80,000 yuan last year, comparable to that of urban families, thanks in part to record-high soy prices.

The reforms also push more money to the countryside to form businesses that can absorb labourers. Many businesses are already underway, but lack access to loans.

Some reformers had pushed for peasants to gain the right to own their land outright and sell it if needed, but others have argued that would create a landless class and leave China’s army of migrants with no home to fall back on.

Chen’s co-operative contracts out the land of those who have left for the cities, paying a fee of 230 yuan per mu – common arrangements in the countryside.

“I would like to keep the land with me when I grew old and want to live in the countryside,” said Ji Changtao, a former farmer from Anhui, who contracted his land to fellow villagers and now runs a logistics company in Beijing.

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