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VOL.5 April 2013
Back to Their Roots
New incentives for family farming provide opportunities to boost China’s rural economy
By Hou Weili

Boosting rural vitality

Traditional farming in China is based on small-scale farming done by individual households scattered around the nation. "Under that system, production capacity is low, use of modern agricultural technologies is limited and agricultural production is also isolated from market demands. Rural arable land in particular is being poorly cultivated as rural laborers flock to cities during this period of accelerating urbanization," said Lin. "Against this backdrop, it is necessary to allow some integration of rural land for larger-scale farming," he noted.

This year's first policy document is the 10th consecutive such document to focus on rural issues, highlighting the Chinese Government's determination to improve economic conditions for the nation's rural population. In 2004, the document had a key guideline for rural issues, encouraging "giving more, taking less and loosening control," which stressed that the Government would increase financial input to rural areas and agriculture, as well as reduce taxes and fees collected from farmers.

"With the economic reforms in rural areas in recent years, incentives and farmer-friendly policies addressing financial input and taxes have been launched. Encouraging family farming is a new move to loosen control and will boost the vitality of China's rural economy," said Lin.

Liu Yongjun is optimistic that family farms will lure rural laborers back to farming. "Large-scale operations will turn farming into a lucrative career and entice young farmers, many of whom have migrated to urban areas for better-paid jobs, to return and work as professional farmers," said Liu.

Cautious implementation

Despite the promising potential of family farming, Lin cautioned that those establishing family farms around the nation should take a prudent approach. According to his calculations, if the size of a family farm averages 6.7 hectares, China's arable land, totaling 120 million hectares, can only hold 18 million such farms. Provided every family farm engages three laborers, this system could only employ 54 million people, while 300 million people in China currently make their living from agriculture alone.

"Surplus agricultural laborers have to be absorbed by urbanization. But it will take about 50 years for that to happen, given that urbanization is currently progressing at 1 percent annually," said Lin. "Based on this, I don't think family farms should be widely popularized across the nation in the near future."

He also pointed out that only certain regions are suitable for the promotion of family farms, such as areas where land can be easily integrated, developed regions and the outskirts of metropolises with enough non-agricultural jobs vacancies. "But in central and western regions where industrialization and urbanization lag behind, developing family farms won't work," Lin added.

Small-scale farming based on individual farm households will remain mainstream in Chinese agricultural production in the long term, and farming trends like family farms are only helpful as supplements, not replacements for the original model, according to Lin.

An important side effect of family farming can be overuse of arable land, warned Liu Yongjun. "Organizations at the village-level can function as watchdogs in this regard," he said.

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