Read almost any article or watch any television report about China and you could be forgiven for thinking the country basically consists of teeming cities interspersed with factories. The media’s urban bias fails to reflect the fact that, despite 30 years of industrial development, China remains predominantly rural.
Even taking into account the 150 million or so rural migrants who have sought work in towns and cities, more than half of the country’s citizens still live in the countryside. The average Chinese person, therefore, spends his days knee-deep in a paddy field, not working in a factory or an office.
There are roughly 200 million farming families in China, and they are poor, with an average per capita salary of US$900 in 2010. Amid all the talk about the country becoming an economic superpower, this fact is worth bearing in mind.
Boosting farmers’ living standards means moving more of them into the cities, where they can find more productive jobs. This, in turn, leaves more land for those who continue to work in the fields, thereby easing China’s massive rural labor surplus.
Nowhere is the land-labor imbalance more apparent than in the countryside of Chongqing, in southwest China, where the fields are divided into a patchwork of tiny plots. Here the average household farm is just half an acre – versus a national average of one acre – even once you include land informally transferred from migrants to permanent rural residents. Most farming families in Chongqing live a subsistence life. Many now live in new two-storied homes with shining tiled walls, but these were paid for by relatives working in factories or on building sites far away in the city.
But the pattern of living off handouts from the urban economy may be about to change: Three years after the central government decided to encourage rural land transfers, a genuine market in farmland is beginning to emerge. This will be a slow process, but a vital one for creating a more modern and profitable farming system.
According to a recent survey by Landesa, a US-based non-profit organization, one in eight farmers has participated in a market transfer of land since 2008. Many of these are simple farmer-to-farmer transactions, but they also include transfers to agribusinesses that are looking to consolidate land, invest in better irrigation and machinery, and reap economies of scale.
This process is clearly evident in western Chongqing, where villagers are leasing their land to outside companies and working instead as wage-laborers. Typically, families receive RMB600 per mu of land, which works out to almost US$750 per acre.
The inevitable danger is that farmers will get kicked off their land by unscrupulous local authorities and rapacious businessmen. But the consolidation being driven by the agribusinesses will hugely benefit China’s farming sector. If abuses can be curbed – admittedly a big if – the trend promises to help boost productivity and support the urbanization drive that China’s leaders want to power future growth.
And for the millions of old farmers forced to work the land after their children migrate to the cities in pursuit of higher wages, the option of leasing out their holdings for a subsistence rent may prove a godsend.
Thirty years after China began to dismantle its rural communes and give households responsibility for their land, the transition to modern farming has finally begun.