The vast majority of farmers around the world belong to some kind of industry association through which they are able to engage in collective marketing, share information and achieve economies of scale in purchasing raw materials and equipment.
Not so China. According to Professor Huang Jikun, director of the Center for Chinese Agricultural Policy at the Chinese Academy of Sciences, only 3% of the country’s farmers participate in professional associations.
"Most of them are not financed well and are really just there in name alone," he said.
Beijing accepts that these Farmer Professional Associations (FPAs) could deliver more skilled and market-oriented, and therefore wealthier, farming communities. Various documents have been issued in support of FPAs, culminating in the law on Farmers’ Cooperative Economic Organizations, which has been working its way through bureaucratic channels.
Taking the initiative forward, though, depends on establishing a more hands-off role for government.
FPAs – of which there are only about 150,000 in China, out of a rural population as large as 800 million – are essentially private bodies run by the members for the members, with decisions driven by commercial interest.
The farmers, meanwhile, have to be convinced that the associations are in their best interests – for many, the word "cooperative" serves as a reminder of the inefficient commune system that ended in the last 1970s.
"Farmers have been reluctant to organize themselves because of negative experiences in the past and the government has been reluctant to let farmers form groups," said Achim Fock, senior rural economist at the World Bank in Beijing. "But over the years the government has started to encourage it."
A World Bank report published last October on the development of FPAs calls for the creation of a legal framework that allows groups to raise capital from their members. It also advocates support networks to provide training and technical assistance.
Implementing national policies across an incredibly fragmented sector riddled with regional disparities and various layers of bureaucracy is no easy task. But in an industry characterized by increasing consumer sophistication and vertical integration of supply chains, Fock believes collective action by farmers is imperative.
"To large extent, it is the missing link in the Chinese agricultural sector," he said.
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