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Food Fight

Decoding the contradictions of China’s agriculture industry

07·15·2016

People don’t often interrogate their food. Carrots aren’t asked if they were grown next to a factory, potatoes are rarely questioned about whether they were pulled by a machine or an underpaid hand, and exactly how Chinese is that Chinese cabbage, anyway?

China has more mouths to feed than any other nation, but increasingly, it needs overseas farms and suppliers, and the farming conditions within the country itself are still far from efficient. Between the food safety scares and the legions of farmers lacking technological aid, the country still has a long way to go in developing its farming sector.


PLOWING THE PATCHWORK

Even as China has emerged as the largest food producing nation on earth, its agriculture sector continues to be one of the most inefficient. More than 34 percent of all employment in China was in agriculture in 2011, according the World Bank, so one might imagine that keeping China’s farms as up-to-date as possible would be a priority. But time, pollution, and economic development have not been kind to China’s fields.

The problem here is technology, or the lack thereof.

As early as the 1960s, the concept of mechanization was important to the Chinese leadership and was regarded as an effective way for China to feed itself. But even today, when talking about agriculture, most farmers still envision a typical farm as being a small plot, with minimal investment in machinery and advanced technology.

The process of mechanization has been a long and arduous one. When the Communist Party came to power, they began seizing land from landowners and distributing it among the poor. Farmers classified as “poor peasants” were given ownership of land. But in that model, estates and large farms were divided and peasants just got small parcels. By the late 1950s, private land ownership was eliminated, and farmers were organized into teams and then collectives and became members of “people’s communes” (人民公社). Initially, the Communists were trying to follow the Soviet model but then became impatient with the pace and turned to radical mass movements like the Great Leap Forward, an economic and social campaign from 1958 to 1961, which aimed to rapidly transform the country from an agrarian economy into a socialist society through rapid industrialization and collectivization. Famine followed.

Then, three years after Mao’s death, Deng Xiaoping attempted to decollectivize the agricultural sector, including introducing the contract responsibility system in the 1980s. Under this system, farming families signed contracts with the village or town to cultivate a given crop on a particular piece of land, after the harvest a certain amount of the crop had to be sold to the unit at a predetermined price, but beyond that, farmers were allowed to determine for themselves what and how to produce.

Though the system liberated productive forces to some extent, China’s agricultural sector remains highly labor-intensive and history has left farmers with land fragmentation, which has become a key obstacle for China’s agricultural development. Zhu Daolin, a professor from Department of Land Resources Management at China Agricultural University, says that under the system established in the 1980s, agriculture was based on family as a production and management unit. It helped solve the problem of ownership and distribution and improved productivity, but at the same time led to fragmented farming.

Because all the farmers wanted the right to use high-quality land, lands had to be classified into different grades and distributed equally. So, to ensure fairness, farmers all gained land of various grades in patchwork locations. This, obviously, often made the land unsuitable for using machinery.

But to be fair, fragmentation has positive side. Zhu points out that since China has a vast territory and varying topographical conditions in different areas, agricultural production needs to suit local conditions. About 34 percent of China is covered by pastures and 14 percent by forests. Only 15 percent of the country is good for actual agriculture and most of this land is on the central eastern coast and along around the Yangtze and Yellow river valleys. So in certain regions like mountainous and hilly areas, land fragmentation is a practical choice, proper for the current labor-intensive model.

Despite that, since land fragmentation increases the cost of management and obstructs large-scale farming and mechanization, land consolidation is inevitable, and the mechanism for this consolidation is “land transfer”.

Land transfer means transferring the rights to use the land (rather than ownership) with the goal of creating large-scale farming units. In 2013, the authorities issued documents encouraging farmers to transfer land-use rights to large-scale grain production households, family farms, or farmer cooperatives.

Ling Jihe, a farmer from Nanchang, Jiangxi Province, is a pioneer in this field. In 2009, Ling founded his agricultural development company and now deals with around 18,000 mu (an area roughly equal to 12 square kilometers) of land. After collecting land from farmers, Ling employs efficient producers to farm and has introduced intensive management and mechanized farming, which has massively lowered overhead. Since 2011, Ling has been able to send an annual bonus to the farmers every year—this year bonuses totaled 2.28 million RMB. At first, many people thought Ling’s annual bonus was just a publicity stunt, but after five years, they admit that there might be something to this new land-transfer model.

But it’s not all good news. Zhu states that there are risks, and these hint at some potentially devastating problems. The first relates to people deciding to grow things other than grain (which is both less risky and more necessary when it comes to feeding more mouths). In order to make more money from the land, many choose to grow non-grain products, and some even build factories, golf courses, or resorts.

The second is that land transfer increases production costs, so it may thus cause a raise in the price of agricultural products. “To guard against these risks, the government needs to enhance regulations and supervision, prohibiting non-agriculture projects and people not growing grain. We also need to prevent people deliberately inflating land prices during the transfer process,” says Zhu.

At the same time, many farmers feel reluctant to transfer their land because they worry that they’re giving up security. Even if the problem of land fragmentation is solved smoothly, some people worry that it will result in a surplus labor force in the countryside. Zhu says these fears, unfortunately, are not groundless.

But, ultimately, time will be the ultimate arbiter of whether China can control the risks of patching the country’s farmland back together.


 “Food Fight” is the cover story from our newest issue, “Agriculture”. To read the whole piece, become a subscriber and receive the full magazine. Alternatively, you can purchase the digital version from the iTunes Store.

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