Economy
Chinese farmers lease their farmland, take advantage of govt policy
(Xinhua)
Updated: 2010-06-19 14:12
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SHANDAN, Gansu - Li Yongfu is taking care of onions on the land behind his house he has tilled for decades. But this year the farm's output will have a new owner -- Wang Defu, the man Li leased his land to.
Li is leasing his land to Wang for 30,000 yuan per year. But Wang is also paying him 1,500 yuan ($220) per month to farm the land.
"This income is pretty good for me," the 60-year-old said.
A typical senior citizen in rural China with the "empty nest" syndrome, Li and his wife, 57, depend on each other for survival.
With their two sons married and migrating to towns, the couple are by themselves with 3.4 hectares of arable land.
"It is impossible to do the work on our own at our age, and we are always slow to know what crops are the most profitable," Li said.
Before leasing out the land, the couple only grew crops on a part of the land to earn 15,000 yuan a year.
But things changed in 2008 when a new central government policy allowed rural households to transfer land use rights, allowing small and scattered plots to be put together for more efficient and intensive cultivation by farming companies.
Dubbed the "new land reform," the move runs counter to the previous land reforms that presaged China's economic reforms more than 30 years ago. Then, a household contract responsibility system was introduced to end the collective farming which was believed to have strangled individual enthusiasm to work.
A beneficiary of the policy, Li signed a three-year contract at the end of 2009 to lease all his land. And at the same time, he became an employee of Wang's farming company.
Nestled at the foot of Qilian Mountain in China's northwest interior, Shandan County is economically backward compared to much of China.
Like Li, many of the old farmers here are familiar with farming, but few understand the market and economics. So they earned little after even a year of hard work.
Younger residents, lured by hopes for an exciting and prosperous city life, turned their backs on the land and farming. Consequently, more and more land was abandoned.
Official statistics from the Shandan County Government show more than 6,000 hectares, or one quarter of the county's farmland, has been leased.
Under the Chinese law, land is owned by the government and farmers can only own the land-use rights.
"I can choose to till my own land when the lease expires in three years if I want," said Li.
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From a neighboring village, lessee Wang Deqin is an expert in agricultural markets -- unlike Li. Wang's company has six partners and runs farms on more than 230 hectares of land leased from over 100 farmers.
"I used to have around one hectare of contracted land like Li. And although I knew how to make full use of it, the income was not much as the plot was small," Wang said.
Now, Wang has set his ambitions high. Equipped with advanced farming technology and market savvy, he's making a good profit. With per-hectare annual income 22,500 yuan, his company is raking in more than five million yuan a year.
"It would have been impossible to achieve such a profit if we had stuck to the original production mode. How could have more than 100 farmers reached an agreement on what and how to farm?"