Cultivation of cooperatives could aid farmers

WITH THE PRICE OF GARLIC SPROUTS plummeting due to oversupply, some farmers in Henan province have reportedly discarded their harvest of garlic sprouts, a popular ingredient in many Chinese dishes. Beijing Youth Daily commented on Thursday:

The local governments in Henan have acted quickly to the overstock by pledging to set up a garlic association to nip oversupply in the bud. But what happened in Henan indicates once again how easy it is for farmers to fall prey to price fluctuations.

That some have urged the market to play its part at the cost of "non-market minded" farmers is hardly helpful. Farmers do not necessarily have to pay the price for being unaware of how the market works and when they should increase or reduce their production. Local agricultural officials are obliged to intervene if need be and guide farmers through these dark waters, rather than sit on the sidelines.

The roller coaster price alterations of Chinese agricultural products can be devastating to farmers, yet they are not uncontrollable.

Home to a relatively mature and stable agricultural market, the United States can offer a lesson or two on balancing supply and demand.

The food produced by one US farmer can feed about 155 people, and one-fifth of the country's food products are exported to the rest of the world. In recent decades, the US has rarely suffered from an excessive supply of soybeans, oranges, or milk thanks to its efficient supply chain, at the core of which is its agricultural cooperatives.

Cooperatives enable farmers to own and control, on a democratic basis, the procurement of supplies and services, and the selling of their products.

This should be heeded by many local governments in China, which either step back letting the market take over or improvise countermeasures such as initiating emergency buying in the face of an oversupply. Neither approach is a cure to the problems facing Chinese farmers.

The nationwide promotion of cooperatives seems to have yet to reach Henan's local governments, which only began discussing the possibility of establishing a garlic association after farmers threw their hard-earned harvest away.

Establishing online exchange platforms could also better prepare farmers for unexpected market changes.