By Cheng Guoqiang, Luo Biliang & Guo Xiaoming

Research Report Vol.17 No.1, 2015

I. New Problems and Challenges for the Current Agricultural Operation System in China

The double-level basic system for rural operation, “the combination of unified and separated operation system”, built based on household contracted land system, is the major achievement of reforming and innovating the rural economic system in China. More than 30 years of practice has proved that the agricultural operation system, characterized by “collective ownership, average distribution of contracted land, and household operation” has played an important role in promoting agricultural and rural development in China. However, with the deepening of industrialization and urbanization and the rapid flow of rural land and labor, drastic changes are taking place in agricultural operation. Problems such as “the weak farming the land” and “barren land for grain crops” are becoming ever more prominent. Agricultural operation is facing severe challenges as follows.

The first problem is land fragmentation. According to the statistics from the Ministry of Agriculture, every household had in 1986, an average area of farmland of 9.2 mu (around 0.61 hectares), divided into 8.4 pieces and the acreage decreased to 7.4 mu (around 0.49 hectares) divided into 5.7 pieces in 2008. In 2011, the total farmland of contract Operation nationwide reached 1.277 billion mu (85.1759 million hectares) and there were 229 million farm households, making 5.58 mu (around 0.37 hectares) per household. It indicates that the property of economies of scale is less prominent in farm household operation.

Second, farmers have concurrent businesses. Statistics of the national agricultural census suggests that among all farm households in China, in 1996, farmers depending only on farming accounted for 62.8% and the number fell to 40% in 1999. In 2008, it further plumped to 25.3% in Jilin, Heilongjiang, Anhui, Sichuan and Zhejiang provinces, which means that most farmers no longer live on farming.

Third, farming labor force is becoming weaker. For example, only 38.10% of all employed labor force in 2011 engaged in the first industry and the farming labor force is mostly composed of the elderly and women. Based on the survey of 931 villages across the country, among the whole labor force, those over 51 years old accounted for 39.8% in 2011, and the percentage of women was as high as 69.89%, indicating that farmers are engaging in other businesses rather than farming.

Fourth, farming is turning to be a sideline. Statistics from the Ministry of Agriculture show that farming contributed to 75.02% of the net income of farmers in 1985 and only 26.3% in 2011. Thus it can be seen that most farmers no longer rely on farming for a living.

Fifth, production has been conversed for “non-food” purposes. Grain yield per mu (0.0667 hectares) in China was 358.5 kilograms in 2013, a 69.6 kilograms increase compared with a decade ago. It is science and technology that make the yield per unit area contribute to more than 65% of the total grain output growth, thus achieving the growth of grain output for ten consecutive years. On the contrary, with the transfer of the right to contracted operation, grain production exhibits a declining trend. The survey in 2011 suggested that the grain planting acreage for those farmers not transferring farmland accounts for 74.3% of the whole, while the number was 60.2%, much smaller, for those having farmland transferred in, which suggests that grain production is increasingly not farmers’ focus.

Therefore, if the quality of the agricultural labor force, farmers’ production capacity and the agricultural operation scale fail to meet the minimum requirements of the development of modern agriculture, it will be difficult to sustain the related agricultural modern facilities and equipment, scientific and technological applications, quality of products, farming income, and people’s enthusiasm in farming, thus threatening food security and the entire course of agricultural modernization in China. It is and will be the hardest nut to crack, in China’s agricultural modernization, to bring about genuine breakthroughs and innovations of agricultural management and accelerate the construction of a new agricultural management system with household operation as the basis of agricultural production.

II. “Pilot Pratice in Chongzhou”, an Innovative Practice of Agricultural Operation System in China

Problems and contradictions in the agricultural development of Chongzhou, a major agricultural county and grain producing area in Chengdu, Sichuan Province, by and large prevail in the whole country. Take 2012 as an example, the permanent population of the city was 670000 including 369500 rural laborers of which 73.4% worked outside the city. The large-scale outflow of rural labor has further worsened the “marginalization” of agriculture. The agricultural development is presented with not only the practical problem of “who farms” but deep ones, like “what kind of land should be used” and “how to farm it”.

A variety of explorations and practices have been carried out in Chongzhou City to tackle the above problems and contradictions. For example, major grain producing households were encouraged to transfer their farmland in the early days and later leading agribusinesses were introduced to rent farmland for scale operation. The results of both were not as good as what they expected. Especially in 2009, Yinmalong Company broke the lease contract and surrendered over 3000 mu (around 200 hectares) of farmland in Qiquan Town, farmers were reluctant to take back the contracted land and in turn asked the local government to be responsible. In order to break through the dilemma and maintain the stable agricultural production and rural development, the government of Chongzhou, since 2010, has been “forced” to start a new test, i.e. dividing more than 3000 mu (around 200 hectares) of surrendered farmland into pieces ranging from 300 to 500 mu (around 20-33 hectares) and mobilizing and introducing farming experts for rice production and management, which has achieved good results.

After over 4 years of exploration, there has been formed, in Chongzhou, a new agricultural operation system with household contract system as the basis, farmers as the core participants, and jointly managed by multiple entities including professional agricultural managers, land shareholding cooperatives, socialized service organizations, etc. Here are the main functions of the system. First, it will lead farmers to establish a “land shareholding cooperative” and exchange their right of contracted land management for shares of the cooperative. In addition, it will employ farming experts with good command of technology and management skills as professional managers in charge of the production and management of the cooperative. What’s more, it will set up a specialized service system for large-scale farming and a “one-stop” agricultural service supermarket, thus creating an agricultural operation mode covering “land shareholding cooperatives, professional managers and service supermarket”, i.e. “agricultural joint operation system”.

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