Rural development strategies and government roles in the development of farmers’ cooperatives in China

Aijuan Chen,Steffanie Scott

doi:10.5304/jafscd.2014.044.005

Abstract

In an effort to address the growing income disparities between rural and urban residents in China, Chinese authorities introduced a series of rural development policies beginning in 2002 that established as a national goal a xiaokang (all around better off) society and gave top priority to the triad of agriculture, rural areas, and farmers. Farmers' cooperatives, consequently, have received substantial government support since 2002 as they are viewed as an important institution for linking small-scale producers to agro-food supply chains, and particularly value-added food chains. Yet little is understood regarding how and to what extent farmers' cooperatives have benefited members and contributed to rural development in China. Using a case study method and in-depth interviews, we evaluated three successful farmers' cooperatives in China. Following the deepening-broadening-regrounding typology proposed by van der Ploeg, Long, and Banks (2002), we found that the farmers' professional cooperatives can make important economic, social, and environmental contributions to rural development by adopting alternative strategies and activities. On the other hand, these cooperatives also face great challenges for further development, including limited access to land and capital, a massive loss of laborers, low market competitiveness, weak internal management, and limited government support, which explains why cooperatives are not more widespread in China. This paper offers new insights into the roles of farmers' cooperatives and government in rural development.

Highlights

Under the agro-industrial paradigm, agricultural producers face a reduction in economic margins as a result of the cost-price squeeze
Rather than continuing the debate on “true” and “fake” cooperatives, we argue that Farmers’ professional cooperatives (FPCs) — the subset of cooperatives that are not merely extensions of agroenterprises — have the potential to make significant social, economic, and environmental contributions to rural development in China by adopting the “deepening-broadening-regrounding” framework proposed by van der Ploeg, Long, and Banks (2002)
These activities have a range of different expressions, including capturing greater value-added in production via certification, branding, processing, sorting, and packaging; shortening supply chains; and expanding to other on-farm activities

Summary

Introduction

Under the agro-industrial paradigm, agricultural producers face a reduction in economic margins as a result of the cost-price squeeze (van der Ploeg, 2000). Farmers’ professional cooperatives (FPCs) have grown rapidly in rural China over the past 10 years. They have become an important institution in rural China in attempting to achieve the vertical integration of agricultural production, processing, and marketing. Realizing the potential to combine capitalist and socialist components, Huang (2011) advocates FPCs as alternatives to large agribusiness companies for integrating small-scale farms with processing and marketing, and predicts that FPCs could outcompete agribusiness if they were given the same state subsidies and privileges. Gürel (2014) further points out that many FPCs in contemporary China are company-like cooperatives that are similar to agribusiness in terms of their “shareholding and decision making structures and the production relations they facilitate” Gürel (2014) further points out that many FPCs in contemporary China are company-like cooperatives that are similar to agribusiness in terms of their “shareholding and decision making structures and the production relations they facilitate” (p. 69)

Methods

Results

Discussion

Conclusion