Opinion     

Crop farming still dependent on families

China.org.cn, February 6, 2013

• On January 31, China's central authorities issued the "Opinions on Accelerating the Development of Modern Agriculture and Further Enhancing Rural Vitality” (often called the No. 1 Document in China), giving priority to diversifying production patterns, and to establish large-scale, specialized, organized and new agricultural business entities.

  Chen Xiwen [file photo]

  
  
  

  Upon the publishing of this important document, Chen Xiwen, deputy head of the Rural Work Leading Group and director of the Executive Office of the CPC Central Committee, shared his thoughts concerning the agricultural management system during an interview with the Oriental Morning Post, a Chinese language newspaper.

  "Crop farming still relies on families”

  Question: The No. 1 Document stresses building a new agricultural business system. What problems do this aim to resolve?

  Chen Xiwen: From the point of view of industrial routine and the world development routine, families are the most effective mainstay of agricultural business. The problem China is facing now is that the existing family farm operations are too small in scale with high costs and risks. We expect to realize two changes: First, family farms need to adopt advanced technologies and means of production; and second, alliance and cooperation between family farms are encouraged to form a diversified, multi-layer and multi-form business and service system.

  Creating a new agricultural business system brings the strong points of different agricultural entities into full play.

  Question: Does creating a new agricultural business system mean changes in the household contracting system, which has been exercised for years?

  Chen Xiwen: Take a look at the farming operation models in different countries in the world. All of them have families at the core. The only difference is the scale. We do not agree to deny a family-run business system. Some people think that family-run businesses are backward and small in scale and that modernization cannot be realized. However, up till now, there hasn't been any country which does not keep family farming as its base.

  Of course, with technological progress and agricultural development, larger agribusiness enterprises may prove advantageous, especially in their ability to use more capital-intensive, modern farming equipment. However, industrial production must have industrialized conditions – there must be precise monitoring and controls, standardized production, and standardized labor.

  "I don't agree to pledge farmers' houses and lands”

  Question: The "No.1 Document” emphasizes accelerating the registration and certification of rural collective land ownership including land for houses. Does it mean that after the registration and certification, housing lands can be sold or pledged?

  Chen Xiwen: The purpose of registration and certification is to clarify ownership and protect farmers' property rights. Housing lands can be circulated inside the collective economic organization itself, but cannot be sold to any other people outside the organization. If a house site can be sold to anyone in society, it is a commodity house, and the nature of the land will be different.

  In a country where small-scale peasant economy dominates, most rural areas rely on policy or cooperative finance. They do not need any pledges. Farmers get loans with effective credit provided by themselves. I do not agree to use farmers' houses and land as pledge. Why? The law does not allow this.

  Allowing farmers' to get loans with their houses and land as collateral is an ex parte form of marketization. Agricultural loans cannot rely only on commercial finance. At least four years ago, the China Banking Regulatory Commission issued a notice on credit loans without pledges, with a maximum volume of 300,000 yuan.

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