Cooperating to compete
With the increased competitive pressures that WTO will bring, many Chinese and inter-national experts believe that Chinese agriculture will need to move towards greater regional and sectoral specialisation, with improved production, storage and processing technologies and better market information and analysis.
Technical support for farmers is nominally the responsibility of the government's agricultural research and extension system. This faced the momentous task, twenty years ago, of adapting to rural reforms that transferred the 'basic unit of production' from village collectives to nearly 200 million individual rural households, at the same time creating the conditions for diversification out of staple grain crops. Current signs are that the government system is no longer meeting the needs of so many smallholders, particularly where they venture into new, specialised products.
Government funding for agricultural research (which is largely directed to grain, oil bearing and cotton crops) has apparently increased gradually over the last fifteen years but, after higher salaries and capital expenditure on new buildings are taken into account, net funding has in fact declined significantly: according to one World Bank publication, real research funds per scientists fell by 25-30% during the 1990s.1
The extension system is also in apparent decline. China employs more than 600,000 extension specialists, spread across national, provincial, county and township levels, (although the better qualified staff are heavily concentrated at the higher levels). These are supplemented by a further half million, usually part-time, township and village level 'farmer technicians', who are responsible for advising neighbours and perhaps for managing demonstration fields. But real funding for this system has also been falling. Moreover, local governments are generally responsible for paying wage bills, but in poorer areas invariably have difficulty in doing so. In some areas, salaries are reported to be as much as a year in arrears; and extension staff have been encouraged to engage in sideline activities, such as acting as agents for the sale of fertilisers and pesticides, which may involve a direct conflict of interest. Most accounts agree that the last decade has seen a considerable reduction in the amount of time extension workers spend in the field, training or offering individual consultations to farmers. In some places, lower level extension stations have closed down altogether.
Farmer's associations may at first sight have the potential to fill some of the gaps left by shrinking, government provision, in a way that is more farmer-driven, or at any rate more responsive to farmers' needs, than an extension system traditionally geared to meeting government objectives such as increasing grain yields. But the nature and function of the existing associations is highly diverse. By no means all of them conform to a 'bottom-up' model, and only a relatively small number are able to offer information or support in marketing.
A research project cond-ucted in 1996 by the China-EU Centre for Agricultural Technology (CECAT) and the Rural Economy Research Centre, both under the Ministry of Agriculture, examined the changing composition, role and future prospects of the associations.
The study found that since the early 1980s an (unspecified) proportion had been established 'spontaneously' by farmers, as knowledge sharing, self-help groups, in most cases focussing on specialised production of new cash crops. Often, these were initiated by farmer technicians in the official extension system, who began by establishing contact and exchange between households in the same area that were experimenting with the same crop or livestock. Once the 'household responsibility' system had re-established the principle of private production, forward-looking farmers were keen to diversify into crops such as fruits, vegetables and medicinal plants, which were not regulated by quotas, and which could be sold on the open market. In most cases, the government extension service was not itself geared to providing technical training and advice for these new crops, so it was natural for farmers to pool their knowledge in order to improve quality. Examples of the range of activities covered by village and township associations of this kind include citrus fruit growing, water chestnut and mushroom production, wool production, duck raising and Angora rabbit breeding.
However, an (again, unspecified) number of associations were formed at the initiative of village committees, township or county government agencies. In these cases, the association's role might simply be to sell inputs to local producers. In cases of this kind, one international consultant involved in the research points out, 'the farmers might not even know that they are "members" of an "association."'
The same may be true of 'associations' established by 'collective' township and village agro-processing enterprises, in order to raise the quality of agricultural raw materials bought from local producers. In such cases, the enterprises may offer farmers free advice and training on crop development along with contracts to purchase their products at guaranteed prices.
The CECAT/RERC study did not venture to estimate the number of associations according to the way they were established. Instead, it categorised associations as either 'basic,' 'intermediate' or 'mature.' Basic associations, reckoned to account for 50% of the total, are limited to exchanging technical information, through lectures and demonstrations. Most of the spontaneously formed associations would appear to be of this kind, although the study gives examples of some that have evolved into intermediate or mature associations. Intermediate associations, counting for 40% of the total, provide market information as well as technical advice, and also provide inputs including seeds, seedlings, fertiliser and sometimes tools and machinery.
The remaining 10% of organisations, categorised as 'mature', were said to provide 'comprehensive services in production, supply and marketing'. It appears that the majority of these were operated by commercial enterprises. Some (including some that were originally set up spontaneously by farmers) have developed into joint stock cooperatives. Note, however, that China lacks a clear, legal framework for establishing cooperatives, and the name is frequently appropriated by enterprises without distinctively cooperative principles or charters.
At the end of 1995, the China Association of Science and Technology, one of China's eight, parastatal 'mass organisations,' established a China Rural Special Technology Association (CRSTA) to serve as a network and umbrella organisation for local associations. Provincial branches of the national association have export licences and attempt to identify export markets for products bought directly from producers through county level branches. The national association also links local associations in different areas, increasing the potential for cross fertilisation and exchange, and has regular contact with government research institutes.
According to Zhou Junxiu, Deputy Secretary General of CRSTA, the association has also facilitated technology transfer and poverty alleviation projects. Last year, he says, 21 'model' associations visited Liulang Prefecture in Shanxi, to demonstrate improved techniques of fertiliser use and 'green pesticides'. Farmers from Shanxi also visited counterparts in Guangdong, and returned with rootstock for medicinal plants and eggs of scorpions - which can be bred for use in traditional Chinese medicine.
Mr. Zhou says that CRSTA has identified 1,000 model associations, and is keen to disseminate and universalise systems and techniques they have developed. However, he adds, the national association itself lacks the resources to meet the demand for training and exchange.
'The new style of democratic management in many associations . . . as well as participation or withdrawal on the basis of individual decisions, is a revolution in members' behaviour and traditional ways of thinking. Therefore the associations also function as schools which teach farmers and gradually persuade them to insist on their rights to initiative and participation.'
Farmers Technical Association in China, CECAT, 1996
He is very interested in the possibility of collaboration with international organisations, and believes that CRSTA would, for example, be able to provide training services directly to farmer beneficiaries of community development and poverty alleviation projects.
The taxonomy of local associations remains as complex as at the time of the CECAT/RERC study. Mr. Zhou estimates, in figures that mirror that study, that 53% of local associations are confined to technical training, 38% provide 'technical and economic' services, and the remainder are 'operating enterprises', directly buying produce for agro-processing, and often established as shareholding companies. Associations which make a profit are generally registered with the local Bureau of Industry and Commerce, while organisations which are confined to technical exchange have in the past generally registered as 'social organisations' with Civil Affairs authorities.
Dr. Yi Xiaolin of CECAT points out that development of farmers associations has been very uneven. Shandong has the highest concentration, with over 14,000 associations and more than half a million members. Sichuan, Hebei, Shaanxi, Hubei and Hunan also have a significant number but, apart from Shandong, the coastal areas are relatively sparsely covered. More notable, though, is the greater scarcity of associations in most western provinces: Guizhou, Guangxi, Qinghai and Xinjiang have only a handful; Tibetan Autonomous Region has none.
Dr. Yi believes some of the more mature organisations, particularly those that buy and market produce, have been very successful. She mentions Shandong and Sichuan provinces in particular, noting that in several areas of Shandong the concept of farmer associations was encouraged and promoted by local government. However, she adds that 'associations' which are supplying technical services to farmers and buying products from them do not necessarily develop close lateral links between farmers themselves. It is hard to regard these as grass roots development organisations, therefore, despite CRSTA's insistence that China's farmers associations are 'democratically managed' and 'farmer led.'
The China Association for NGO Cooperation (CANGOs -- a government agency under the Foreign Trade and External Cooperation ministry devoted to attracting international NGO aid to China), is also eager to represent as 'NGOs' several farmers associations established in project sites where CANGOs has managed to draw international funding.
But most of the genuinely farmer-initiated organisations, Dr. Yi Xiaolin believes, are now facing difficulties. Many associations have collapsed over the last few years, often following a fall in product prices. (Zhou Junxiu estimates that the total number declined from 130,000 in 1997 to 110,000 in 1999.) Membership fees are hard to collect and seldom set at a level that would allow for financial sustainability. The associations simply cannot afford to buy in the expertise they need; and farmers lack the know-how, organisational, business and management skills to run the associations. Even more critically, they lack market information, and are generally ill equipped to anticipate or predict price fluctuations. Altogether, therefore, Yi Xiaolin considers that it is extremely difficult for this kind of grass roots initiative to thrive or develop without explicit government support.
But this is no easy thing to achieve. Local and national governments may be able to see the potential of farmers associations as vehicles for development of a rural economy that is lagging behind manufacturing and service sector growth. But it will be much harder for them to overcome deeply embedded suspicion and fear of autonomous organisations in rural areas which might - as the excerpt from the CECAT report quoted above suggests -- lead to a more self confident and demanding peasantry
1 Nyberg A. and Rozelle S., 1999 Accelerating China's Rural Transformation The World Bank, Washington DC