Going to church


One of the many noticeable changes to occur in Pingpu since I was last here in 2014 is the construction of a Catholic church across the river from the township. This was notable to me for a few reasons. Organized religion occupies a very strange place in politics and culture here in China. Seen as potential as threats to the officially atheist state’s legitimacy, religious activities have long been regulated by the Communist Party. Given that the Party’s legitimacy is premised on restoring China’s place as a self-sufficient power – a project undertaken in direct response to Western colonialism – Christian churches have faced particular scrutiny. After the expulsion of most foreigners following the Communist Revolution of 1949, Christian churches were largely pushed underground.

In the past 40 years, the state has in some ways liberalized policies concerning religious activity. In this, it has seemed to acknowledge the void left by the de-legitimizing of folk religious practices under Maoism, which was following by the de-legitimizing of Maoism by the Cultural Revolution and the Party’s embrace of market capitalism. Freedom of religion has been guaranteed under the state constitution since 1982. However, in practice, religious activities are heavily controlled and monitored. Officially-designated religious sites must be approved by the state. As a result, Christian churches in China typically operate in more discreet spaces, such as people’s homes. They are generally tolerated by officials, but crackdowns are not uncommon. As it relates to so many phenomena in China, degrees of official tolerance and intolerance come in waves. It seems the current wave is one of intolerance. The central government is stepping up restrictions, having implemented new regulations earlier this month. Two Christian churches were demolished in Shaanxi and Shanxi provinces in December of last year and January of this year.

So that a church would appear here in recent years seemed odd to me. Walking down the street in town last month, I asked a shop owner and handyman about the church. He told me that it was built just last year with private funds, and that it was not officially approved. I asked him if many people attended services there. He let out the kind of scoffing laugh that seems to follow so many of my questions. “No one goes!” he said, adding a wave of his hand and look off in the distance to emphasize his complete dismissal of the topic.

That seemed unlikely to me, so I set out to explore on a Sunday earlier this month. Service had let out, and a group of men were talking in front of the church. One of them introduced himself as the pastor. Pastor Liu – a medium-built man in his late 40s with intense eyes – confirmed that the church was built last year, but told me that the community has existed here for a long time. I asked if it would be okay if I attended services. While not exactly conveying a sense of warm enthusiasm about the idea, he nonetheless said that would be fine. He told me that the congregation meets Thursdays at 1 pm and Sundays at 8 am.

I headed out last Thursday to attend my first service. I wasn’t sure what to expect, but I was bracing for the worst: that I might be greeted with some hostility by the parishioners, who could feel that I was drawing unwanted attention to them or perhaps that my goal was to spy on them. When I walked in, the service seemed to have already started. The congregation was singing hymns, the lyrics of which were projected from a laptop onto a screen on the stage. The church was largely just a bare, grey concrete room. The only decorations were a laminate mural on the wall behind the stage. It depicted rays of sunshine falling onto a flock of sheep on a field, a forest in the distance. On the bottom right was written Proverbs 4:23: “Above all else, guard your heart, for everything you do flows from it”.

Moments after I entered, a man turned around and looked at me. He then alerted his friend: “foreigner!” Within about five seconds nearly everyone in the church had turned to look at me. I smiled and mouthed “hello” to faces around the room. Feeling self-conscious, I took a seat in the back row. I quickly noticed that while there were three rows, they were distinguished by gender: the men sat only on the right side. The room was fairly small, with seats for about 100 people, though only 60 of them were full. In-keeping with the population of Pingpu in general, the congregation was mostly over 50, with two younger women holding babies. While most people lost interest in my presence and went back to their singing after a few moments, some people kept staring at me with a sort of expressionless look. After I nodded and smiled at them, most returned the greeting, but some just kept staring as though they were in an audience at a play.

A man who was sitting across the aisle from me got up from his seat, approached me and put his hand on my arm. I braced myself for the awkwardness of being asked to leave.

“Do you remember me?” he said. “We met in December. You gave me your card.”

“Oh right!” I said. “I remember you.” I didn’t remember him at all. (On an unrelated note, this concerns me.) I still wasn’t sure what his attitude was regarding my attendance, so I checked in. “Is it okay that I be here? I don’t want to bother anyone or make anyone feel uncomfortable.” (On an unrelated note, you can write that on my tombstone.)

“You can, no problem,” he said, before taking the seat next to me. “Do you believe in Christianity?” he asked. This was a completely reasonable question that for some inexplicable reason I was in no way prepared to answer. So as usual I overthought it and offered a confusing answer. “Uhhhmmm…. I went to church every week when I was a kid,” I said. “I agree with a lot of what Jesus said. I also think what he said is at base reflected in a lot of what is said in other religions.” He stared at me for a bit, then went back to the hymn.

The first part of the service was devoted to hymn singing. Only a few people had hymnals. Most relied on the project lyrics, which seemed to come from a website. After taking a few laps around perhaps three hymns, a man rose from his seat near the laptop and took up a long pointing stick. A new song was projected on the screen. This one was apparently rarely sung by the group, because the man felt it necessary to guide everyone through it exhaustively. Using the stick to keep the time, he sang it alone, slowly, twice. He then went through it again, asking everyone repeat each verse after him. He then asked that we sing it in time with him, before finally letting us sing it independently. Even after all of this, which took perhaps 30 minutes, we were still not ready: we steamrolled through key changes and skipped whole verses. He got up and intoned the parts we flubbed, all the while waving his stick up and down like a sideways metronome.

The pastor then took the stage for his homily. I noticed that he seemed almost broadcast-ready: he generally spoke slowly and simply, repeated concepts, and enunciated in very standard Mandarin without a trace of local dialect. In contrast the homilies with which I am familiar, his often felt more like a classroom lesson. He asked questions of the congregation: “How many holidays in Catholicism?” “How many sacraments?” “How many pieces of bread and glasses of wine per person for communion? 60?” Most were either shy or unprepared. After being greeted with silence, Liu provided us with the answers.

The majority of his talk was devoted to the topic of wealth and gifts. Given that last week was the heart of Spring Festival – during which red envelopes of cash are exchanged and “I wish you wealth!” is a common greeting – such a theme was apropos. “God gives us the greatest gifts for free,” Liu told us. “Love, understanding, peace, consolation. These come down from above, and are all around us, like the air we breathe.” It was a simple and moving message, and a welcome contrast to what for me here can often feel like an overwhelming degree of resignation to the pursuit of money and material goods.

When the service ended, several people approached me with questions about my work and reasons for joining the service. Most were kind and sweet, if a bit suspicious. Apropos of nothing, one of the young women with a baby turned her cell phone around to show me a picture of a luxury watch. “How much does this watch cost in America?” she asked.

I looked at her for a moment, not sure if she was joking or if I had misunderstood her question. “I have no idea,” I finally said. “How much does it cost in China?”

“About 7,000 yuan,” she said.

“Oh, well that’s probably about how much it costs in the US,” I said. “Why do you ask?”

“I’m just interested in things like this,” she said.


An Evolution, Engineered


Eight years after it began sweeping agricultural reform, one township holds clues to the future of farming in China

Chen Yanba walks though the fields outside of his home in Gaolong Village, nimbly balancing the narrow earth barriers that divide rice paddies. He pauses occasionally to describe the features and history of the soil – quality, inputs, droughts and floods – and reconstruct an image of the not-so-distant past. “Most of the team’s homes were over there,” he says, gesturing to an empty stretch of farmland to his right. “The Shi family’s house was over there, the Yang family’s house was over there.”
Chen, 56, has witnessed numerous social and political upheavals in his lifetime. Even in light of that, what has happened here in the past seven years is unprecedented. As late as 2008, his native Gaolong was made up of a patchwork of farming households. Ponds and groves of chestnut and bamboo trees dotted a hilly and lush landscape. These days, flat, brown fields stretch anonymously for miles in every direction. Chen’s concrete house is the only structure within 300 yards.
Gaolong’s transformation is the result not of natural disaster but national policy. The village is at the forefront of a massive, ongoing central government scheme to overhaul China’s agricultural system, replacing its traditional small family farm-based model with one based on large-scale, mechanized farms. Under this policy, broadly deemed agricultural modernization, Beijing has already spent tens of billions of dollars to achieve this goal, known as agricultural modernization, most of which has been used to demolish homes, build farming infrastructure, level land, and negotiate its lease from small to capitalized farmers. And official pronouncements and policy documents promise no end in sight.
The impact on the country has been considerable: over 250,000 square kilometers of farmland – almost 30 percent of China’s total – had been transferred for the purposes of consolidated agriculture, 3.3 times the amount in 2008. The number of agricultural enterprises farming at least 16 acres increased from 400,000 to 2.7 million during that same span. In Ruilin – where Beijing has directed 46 million dollars for this purpose to Ruilin alone since 2007 – over half of the township’s land area and 80 percent of its arable land has been cleared, levelled and consolidated. The number of full-time residents declined by 45 percent, while the number of entities farming over eight acres went from zero to over 100.
According to government statements, this work is critical. An estimated 630 million people – 45 percent of China’s population – still depend on agriculture for some part of their livelihoods. Yet the majority of them work farms that are too numerous to regulate, and too small and scattered to adopt mechanization. As a result, they produce unsafe food, and do so unproductively and inefficiently, thus endangering food security in a nation with 12 percent of the world’s population but only seven percent of its arable land. What’s more, these factors mean that farmers never produce the wages necessary to escape a grueling poverty trap. “Modern” farms will reliably produce more of a safe product, while at the same time “liberating” peasants from farming.
A closer look at Ruilin, however, reveals a more complex picture. Research shows that previous and current small-scale farmers, while less labor efficient than large-scale farms, are more productive and resource efficient. Nationally (and internationally), large-scale enterprises are responsible for the vast majority of food safety incidents. Higher government-set land rents have benefitted a number of young and old residents. Yet they also caused the demise of an entire class of prosperous mid-scale farmers – local leaders and peasant farmer advocates. Further, agricultural modernization has provided the incentive and justification for the government to evict entire villages. Those who remain are being slowly squeezed out, victims of a local government that has abandoned them, and the state-supported, predatory vendors that have emerged in the resulting information and service vacuum.
By most indications, Ruilin is an increasingly stratified, inhospitable, wasteful place that is narrowing options for its people while producing less food. A closer look at Ruilin’s reform, and the larger policy goals and systems driving it, provide insight into why, and why what has happened here is likely only the beginning.

The Roots of Reform
While the work of comprehensive agricultural transformation began relatively recently, efforts to promote “modern” farming in practices date back to the early 1950s. At that time, Mao’s Communist Party had only recently assumed control over China. Facing existential threats from abroad and lacking the industrial capability to mount a defense, the government settled on Soviet-style command economic model premised on producing agricultural goods at a minimal cost and selling them internationally at a premium. The state promoted the use of chemical fertilizers as part of a broader plan to produce agricultural goods at minimal cost and sell the surplus abroad.
To further maximize the efficiency of its extraction from the peasants, it enacted three policies: the collectivization of farmers through a commune system; a compulsory purchase system that monopolized their control over produced grain; and a hukou, or household registration, system, which restricted internal migration by tying residents to their mother’s natal administrative area. (Chan. 2009: 199)
To ensure that the resulting cash influx was channeled towards manufacturing, the central government placed each administrative area in the country within a tiered hierarchy. The largest urban areas – as centers of industry and administration – were placed at the top, with villages at the bottom. Land was categorically designated, with urban land owned by the state and arable land in the hands of collectives. Neither rural nor urban households possessed the rights to manage, sell or profit from their property. Finally, in the absence of the franchise, a cadre management system was created to assess and control the behavior of lower-level leaders. By and large, leaders’ performance was judged by their ability to meet certain quantitative targets, such as grain production quotas.
These policies solidified China’s industrial strength. Yet they did so at the expense of the continued subjugation of China’s rural population. By 1978, two years after Mao’s passing, rural people represented 82 percent of China’s population, yet 85 percent of them lived in a state of poverty as deemed by the World Bank. The urban-rural consumption ratio stood at three to one.
A leadership transition provided an opportunity to address the dire state of China’s countryside, as well as the damage done to the country’s economy and society by the Cultural Revolution. Under a policy known as the Household Responsibility System, then-President Deng Xiaoping dismantled the farming collectives and allocated land to rural households on a largely egalitarian basis. Though the land remained collectively owned and could not be sold, households were granted contractual rights to use the land largely as they pleased and profit from it for a specified term: first for three years, and later for 15. Additionally, in an effort to invigorate competition, the state decentralized fiscally, in effect ceasing to guarantee local government budget outlays. To encourage the building of non-farm industries the revenues from which support agriculture, the central government granted local governments rights to a number of sources of enterprise-related taxes.
Crucially, however, the state maintained three pillar structures: The administrative hierarchy continued to channel revenue disproportionately away from villages and townships and to the largest cities. The cadre management and hukou systems remained as well, with key variations: emphasis within cadre evaluation shifted to GDP growth, while hukou restrictions were eased to allow for internal migration, though access to social services remained tied to one’s registered area.
In aggregate, these reforms within structures had multiplier affects. Suddenly and desperately cash poor local government leaders were highly incentivized to not just grow their economies, but to urbanize up the chain so as to grab a larger slice of state revenue. Holding such impulses in check, however, was both the lack of available funding to build, and the relative health of the rural economy. Household landholdings were small – averaging .12 acres in 1984 – and scattered across multiple parcels, but an incentive had been restored. By 1984 agricultural production grew by 30 percent. Rural economies overall rebounded sharply, buoyed increased farming incomes and, to a larger degree, the rise of small-scale rural-based manufacturing enterprises. Villagers, therefore, had little incentive to migrate in search of better work.
Nonetheless, by the 1990s, any reforms enacted would be done so within a context of a powerful urge on the part of local governments to not just make money at all costs, but to urbanize. It would take only relatively small changes to open the floodgates.

The Drive to the City
By the late 1980s, China’s economy had stagnated across sectors. Reform was overdue, and the Tiananmen massacre provided the impetus for an economic overhaul. Beginning in 1990, Deng along with other central leaders formulated a strategy to reinvigorate growth. Central to this was reinventing China as an export manufacturing hub. To this end, the government reduced trade barriers and established free trade zones to attract foreign direct investment, and liberalized the urban real estate market.
As overseas cash began flowing into China and business flourished, the central government reformed its tax laws to take advantage, resting control of the consumption and enterprise taxes from local governments. In exchange, it gave local governments control over business tax which consists primarily of taxes levied upon the construction and real estate industry and to a lesser extent the service sector. It also assigned exclusive rights over fees levied against enterprises leasing land that had been converted from an arable to construction use designation.
A land rush ensued. State laws and conditions – including a vague public interest eminent domain clause in the constitution as well as miniscule compensation requirements based on agricultural production – presented local governments with little barrier and every incentive to expropriate land at will. Local governments leveraged future land sales to secure banks loans to finance infrastructure projects and attract greater investment. China’s banks – managed by ex-officials, freshly capitalized and encouraged to lend by centrally-set low interest rates – were eager to lend to ostensibly safe local government financing platforms. As a result, land conversions increased from under 50,000 annually in 1993 to over 150,000 in 2005. China lost 123 million mu (8.2 million hectares) of arable land from 1997 to 2009.
The alarmingly rapid loss of arable land spurred countermeasures. Beijing established a “red line” of 1.8 billion mu as the minimum needed to sustain domestic food security. This policy highly restricted the amount of land that local governments can convert from agricultural to building use in a given period. To sell and build on suddenly valuable arable land, local governments now had to find or create new arable land to compensate for any loss.

The Big Ag Push
Calls for a fundamental, modernizing reform of China’s agricultural system were first heard in concert with appeals for a wider economic reform in the early 90s. These were premised on addressing the stagnation in agricultural growth present since the mid-1980s. A consensus grew among central leadership blaming the “scattered, small and weak” nature of China’s farms. By restricting the use of modern farming equipment and de-incentivizing investment risk, they argued, this model hindered labor efficiency and the development of the sector. In 1990, Deng wrote of the need for a second rural reform “leap” following contract farming that would integrate production and increase farm scales.
Proceeding leaders put Deng’s plan into effect. Beginning with a series of state-level policy documents in the mid to late-1990s, central leadership articulated a reform goal of agricultural modernization: a transition from “uncoordinated and low-scale operation” to coordinated, commercialized, specialized, scaled-up, standardized and internationalized farming.
Legal reforms and policy measures intended to promote the transition followed. To encourage investment, rural land contract terms were lengthened to 30 years, while those rights were protected from government land reallocations and illegal expropriations. To encourage land consolidation and scale farming, legislation authorized the subcontracting, leasing, exchanging and transferring of village land.
To accelerate bottom-up reform, the central government introduced or strengthened subsidies, tariffs and price supports to expand the production and adoption of machinery, improved seeds, and chemical fertilizers and pesticides. It also began supporting two forms of enterprise to act as reform mechanisms: “dragon head enterprises” and farm cooperatives. “Dragon head” denoted large-scale farms that met minimum standards for capital, production and vertical integration. However, the logic went, both forms would incorporate and lift up smaller area farms, acting as local drivers of innovation and market opportunities. To incentivize the growth of these forms, the central government introduced generous funding to entities that could prove they met: subsidies, easier access to loans, and “special treatment” in areas like tax, credit, land, electricity and irrigation provisions.
In measures touted to boost rural incomes overall in 1990s, the state increased spending on rural agriculture, increased loans to agriculture-related enterprises, marginally decreased peasants’ taxes and fees burden, and began paying a market rate for procured agricultural goods. During that decade, per capita rural consumption in rural areas increased 232 percent. In spite of this, state investments in rural areas still represented less than a tenth of those made in cities, and the gap between villagers and urbanites widened: urban consumption increased 329 percent in the 90s, increasing the urban-rural ratio from 2.85 in 1990:1 to 3.68:1 in 2000. In addition, agricultural production again flagged, “modern” enterprises grew slowly, while the number of rural-based protests and conflicts – primarily over government land taking – increased exponentially.
Recognizing the failures of a solely economic growth-based approach to rural development, leaders in the new millennium changed tactics in subtly dramatic fashion. In a move stated as an effort to reduce farmers’ burdens and the urban-rural income gap as well as improve grain security, the government formally abolished the centuries-old agricultural tax in 2006. To compensate agricultural county and township governments for the resulting lost revenue, it began a policy of providing direct payments and awards. Payments and awards came with specific, standardized stipulations as to how local governments must spend the money. These were backed up with heightened high-level supervision and inspections. Further, it decentralized local government power, placing counties under the supervision of provinces rather than municipalities and giving counties more decision-making autonomy. Local government leadership-appointment authority was moved up a level: county leaders, once appointed by municipalities, were appointed by provincial governments; township leaders, once appointed by counties, were appointed by municipalities. Finally, the mid-2000s saw the state expand the number of modern agriculture demonstration zones, high-performing township areas chosen through application and designated priority funding to act as models and sites of experimentation.
The result reshaped China’s agricultural production system, placing control over it – in a directly indirect way – in the central government’s hands while deteriorating the quality of local leadership. Local governments serving agricultural areas were in effect robbed of their autonomy. In order to meet their budgets, local leaders had no choice but to accept and compete for government funding and tailor their departments, staff and projects accordingly. Appointment authority changes meant that the likelihood that local leaders themselves would have appropriate local experience and knowledge also decreased. Budgets, staff and projects became increasingly disassociated from the interests of residents. Village government funding was cut significantly.
In addition, these reforms, working within the context of China’s greater policy structure, brought about a redistribution of resources in rural areas. Local government leaders – assessed by their ability to maintain or increase grain production and social stability, as well as create impressive visual indicators of their leadership for inspectors – had every incentive to “modernize” local farming. Without the funding to interface with thousands of dispersed family farms, local governments preferred a smaller, more controllable number of capitalized farmer. Further, “new,” arable land, as as well as the immediately marketable land upon which peasants’ homes stand, represents tremendous value to cash-strapped leaders. Local governments were highly incentivized to incorporate and measure arable land, as well as spur peasant migration. And all could be done under the legitimizing banner of “national interest.”
Reforms and investment failed to stem the greater forces channeling people and money towards urban areas. The total number of cities increased from 382 in 1990 to 666 in 2000, and China’s de facto urban population nearly tripled between 1978 and 2007. By 2007, when Ruilin was named a modern agriculture development zone, unincorporated migrants accounted for a full 12 percent of the urban population; rural hukou holders accounted for 80 percent of China’s population but shared less than 20 percent of GDP. By 2008, the rural-urban per capita income ratio stood at 3.33:1. However, if urban benefits such as subsidized education and medical care are factored in, the gap was likely greater than 4 to 1.

A Model Township
Situated on the southeastern floodplains of the Yangtze River and with a tropical climate, Ruilin has for millennia been a key rice growing area. Until recently, the vast majority of its 30 thousand people were family cultivators farming around one acre, primarily double cropping two varieties of rice for spring and fall harvests. As in most of China, circumstances began to change in the early 90s proceeding the government’s urbanization policies. As an increasing number of residents departed the area on a temporary or permanent basis to seek work in the cities, an informal land transfer market arose. Households would permit friends and neighbors to farm their land while they were gone in exchange for a nominal rent, usually around 100 pounds of rice per mu [.16 acres].
A significant portion of those households renting in land, representing around 20 percent of township households, settled on production areas between 20 and 30 mu. This reflected economies of scale: farming at this size balanced manageability and profitability. These households typically earned around 20 to 30 thousand yuan annually, an amount is equivalent to that of a family laboring in cities. By virtue of their earnings and subsequent investments, these farmers, known as zhongnong (中农, “middle peasants”), often acted as local leaders, advocating for the interests of their communities and the continuation of cultural practices and traditions (He 2011).
He Feng was a zhongnong. Prior to 2007, the 61 year-old farmed 25 mu in his native village of Gaolong, all but six of which belonged to nearby family and friends who had chosen to migrate or retire. His 25 thousand yuan annual income allowed him to comfortably care for his wife and assist his son, a laborer, and his family when needed. Like most zhongnong, He Feng elected to remain a farmer because he lacked the skills to work as anything other than a laborer and he felt too old for such work. “I believed the situation met everyone’s needs,” he said of his community and family.
The implementation of agricultural modernization projects immediately shifted the balance of relationships underpinning the established production order. The reform process in Ruilin began in 2006 with a bid to the State Council become one of the nation’s first modern agricultural development zones, the success of which was based on their governance record and plans. This has been followed by a series of additional project funding applications to various state-level ministries, though which money is channeled – pending approval of blueprint designs – and by which work is supervised.
To date, Ruilin’s modern agricultural reconstruction has unfolded in three planned stages. The first, which lasted from 2007 to 2009, targeted four villages. Township officials selected construction companies to undertake the work through an open bidding process. It then established rental terms between incoming dahu (大户, officially registered large-scale farmers) and xiaohu (小户, peasant households). The land was to stay in the hands of xiaohu, but be leased to dahu on a contracted, fixed-term basis. Rents were set at 440 pounds of grain per mu annually, while, at Phase 1, lease terms varied between five and 19 years. During initiation stages of Phase 1, these terms were dictated by the local government and dahu – villagers were cut out of discussions. Standards set in subsequent phases reflected surveying of villagers.
According to locally-set policies, locals and outsiders could qualify to become dahu, but all had to meet three criteria: pay a per mu deposit (50 yuan in Phase 1, 600 yuan in 2014); demonstrate the financial means to afford the rental rate as well as costs such as labor, machinery and fertilizer; and possess related production experience. Altogether, to achieve official commercial operator status and receive state subsidies, dahu must contract at least 100 mu, requiring – by 2014 – a base deposit of $18,500. Once registered, Ruilin dahu were entitled to receive 80 yuan per mu in government land contracting subsidies, in addition to other state subsidies and awards related to “modern” farming.
The task of arranging the land rental offer with xiaohu fell to village officials. To this end, in most cases, villagers were organized by production teams and presented with the contract terms. By policy, those who chose to transfer their land typically signed a collective contract, while those who elected to remain could retain their landholdings. Blueprints were then be adapted and finalized and construction initiated. Development typically proceeded in roughly five phases: home demolition or resettlement; land bulldozing and leveling; parcel reconsolidation; infrastructure improvement and addition, including the installation of widened and paved roads, cement irrigation and drainage canals, automated irrigation systems and power lines; and dahu and xiaohu settlement/resettlement. Ulimately, over 90 percent of villagers in Phase 1 contracted their land to a dahu, while those numbers decreased to around 45 percent in subsequent phases.
In the aftermath of reform, the great majority of remaining xiaohu report improved farm production conditions. Greater convenience in the wake of land consolidation – which concentrated previously dispersed parcels – represents the most commonly cited upgrade. Prior to reconstruction, 52 year-old Zhao Zhengshu of Nanhe Village farmed 30 mu divided over 24 pieces. Post-reconstruction, his 30 mu was concentrated on seven pieces of land. In addition, those afforded access to improved water manager resources and improved inputs cite their utility. “These days it is much easier to farm than in the past,” said Zhan Kaibo of Nanhe Village, a 52 year-old jointly farming 100 mu. “The labor needed to farm five mu in the past can now be used to farm 20 mu. Irrigation pumps are lighter and easier to use, rainwater gutters are wider and deeper. Land reformation is a big improvement.”
For many Ruilin residents, reform and the entrance of the dahu brought a welcome increase in income and decrease in responsibilities. This was especially true of young migrants and older retirees, most of whom were either already renting their land to a zhongnong or were on the cusp of doing so. For them, the entrance of the dahu increased their per mu annual rent from $18 to $62, or from $110 to $370 for a household with six mu. Seventy-one year-old Gan Shentian of Mei Village and his family willingly gave their land to the dahu, choosing to retire post-reconstruction. “My wife and I are too old to farm,” he said. “We spend our time taking care of our grandchildren.”
Sixty-eight year-old Liu Zuofen of Tang Village – who gave most of his land to a local dahu – believes that the entrance of the dahu benefits the township, given that so many had already moved out to pursue off-farm labor. “There is no one at home here,” he said. “The young people have all left to labor. [Now], those young people outside can relax. They don’t have to worry about returning to help their parents plant and harvest. Whether this is a good or bad situation varies with the individual. If it accords with your interests you say it’s good, if it doesn’t, you don’t.”
Ruilin’s agricultural modernization, however, has neither achieved many of its intended goals nor accorded with the interests of a great many of Ruilin’s residents. Contrary to central government statements, dahu farmers are less productive than xiaohu, producing on average 1,763 pounds of grain per mu annually compared to 1,984 pounds. Dahu farmers are also less profitable on an annual per mu basis, earning $30 to $77 versus $230 to $307.
To maintain their landholdings, Zhongnong suddenly had to double or quadruple their rents to compete with the dahu. None could. Without the aid of the government subsidies made available to dahu, Ruilin xiaohu and zhongnong find it almost impossible to increase their land area. Matching the 400 jin rent paid on one mu of land would on average amount to losing 28 percent of net income on that land. A few retained their land, primarily those renting from villagers who either were unconcerned with money or highly valued rental flexibility. The incomes of most, however, declined by 60 to 80 percent. He Feng’s income declined by 75 percent. Ruilin’s zhongnong population has since declined by 80 percent.
Wei Ziqi, a former zhongnong, described the displacement process: “In the past there were a lot of people in their 40s at home. Homes likes ours all wanted to farm around 20 mu. In our team there are two or three households like this, working 20 to 30 mu… Those families with young people working outside gave their land to the dahu. We gave them 200 jin per mu, the dahu gave 400 jin. These people were definitely willing to give to the dahu. After all, the income from laboring is not stable. For us zhongnong, with less land, protecting your livelihood proves impossible.”
In addition, production team leaders and villagers throughout the township report that vast number of residents – an estimated 45 percent of transferees in Phase 1 and five to 20 percent in subsequent phases – were coerced by the local government into transferring their land. Township leaders, pressured, incentivized and justified by top-down policies and systems, prevailed upon village leaders to maximize the extent of agricultural modernization project implementation in their jurisdictions.
Village leaders in turn used a variety of tactics to achieve that aim. The most common tactic was “thought” or “mobilization” work. This describes a common practice in China wherein local officials work to persuade “nail” households to conform with a project or policy. During these often long, intensive visits, Ruilin officials adopted different methods of persuasion. These included enlisting the subject’s family, friends and neighbors to increase pressure, as well as telling holdouts they were impeding greater progress. “There were some [villagers] that were not willing [to transfer out their land],” said a resident of Mei Village, one of those targeted in Phase 1. “The government worked on them. They said, ‘Give your land to the dahu. They can mechanize. Private people can’t mechanize.’”
Others were told that giving up farming and urbanizing would increase their quality of life. “We were told they would be freer on the outside,” one Mei villager said. Still others were told that, should they stay, their production conditions would deteriorate post-reform. “Village leaders told us that staying to farm would not be profitable,” said a Mei villager. “We were told we would be better off giving their land to the dahu to farm and taking the rent. We were made to feel that not giving land to the dahu was not acceptable. ‘Your neighbors all gave their land to the dahu,’ they said. If you are the only one who doesn’t give your land, what will you do?”
Bei Zhifeng, 71, is a production team leader in Mei village. “When the transfer happened, the village was active in mobilizing and leasing the land to the dahu,” he said. “Village officials told people that the land post-reform would be difficult to farm. ‘It’s better to give your land to the dahu,’ they said. As a result, people thought that contracting out their land to the dahu and receiving rent would be ultimately more profitable and would save them trouble and worry.”
Such tactics were common around Ruilin. “Village leaders came to work on those who weren’t willing to give up their land,” said Shen Aida, a production team leader in Yuan village. “People were told that the land wouldn’t be good to farm, that it would take one to two years for the land to be developed and re-levelled.”
When thought work failed, the local government realized their threats by intentionally eroding holdouts’ ability to farm. Villagers were reestablished on large, uneven parcels of land designed for large-scale farming. For xiaohu, these parcels lacked suitable access to irrigation or drainage. Village leaders also commonly eliminated irrigation and fishing ponds surrounding holdout’s farmland. As a result, those few able to irrigate their land found their seeds waterlogged or dried. One interviewed Feng Village farmer stated that he acquiesced to transfer his land after the elimination of irrigation ponds near his land required him to walk a quarter of a half a mile to retrieve irrigation water. Shen was among those who initially persisted in holding on to his land. However, “After the land was levelled it was not convenient to farm,” he said. “It was uneven, and ponds had been eliminated.” At that point, Shen too agreed to transfer his family’s eight mu. As in all Phase 1-affected villages, over 90 percent of residents in Shen’s village agreed to transfer their land. However, as Shen said, without these coercive tactics, “such high levels of compliance could not have been achieved.”
Rates of peasant land leasing declined in Phases 2 and 3 to between 30 and 60 percent. Township officials attributed this to policy changes initiated after Phase 1 in response to peasant complaints: standardizing dahu lease terms at five years to balance dahu needs for investment returns and xiaohu needs to adapt to livelihood changes; setting a three to five mu limit on land parcel sizes; and instructing village leaders to cease the practice of coercing villagers.
Villagers in impacted areas, however, report that coercive practices continued unabated. In many areas, parcel sizes and irrigation systems in reconstructed areas continued to conform solely to the large-scale production needs of the dahu, and ponds continued to be eliminated. Guang Village resident Zhang Weijia’s land was targeted for land consolidation in 2012. “After the land was demolished, returning to farm again was really not easy,” he said. “For many there was nothing else to do but give the land the dahu. From the government’s perspective, whether or not [the dahu] make money or manage the land well, whether or not the people that have been hired [to manage reconstruction] are responsible, these sorts of things are not important.”
Liu Xianmeng’s production team in Tang Village was targeted for comprehensive demolition on 2010. Those who volunteered to move to cities were first to have their homes destroyed and receive compensation. However, compensation rates increased for holdouts, Liu told us. “Those who were frightened and sold quickly received 100 to 200 per square foot, but nail houses received 300 to 800 per square foot.” In addition, villagers were given the option of exchanging their farmland for non-agricultural hukou and purchasing an apartment in a newly-built complex in the township or an apartment in nearby cities at a subsidized cost: 800 yuan per square foot for the former, 1400 yuan per square foot for the latter. “Many moved to cities for their children’s education,” Liu said.
However, “some elected not to buy those homes because they’re too expensive,” he said. These households retained their farmland and built new homes “on land the government didn’t want.” Liu was among those who declined to purchase an apartment not only because of the purchase cost, but because living in an apartment and transferring his land to a dahu increases his living costs overall. “Living in the estate, there is no land to grow food,” he said. “We receive our grain rent from the dahu, but this only solves the grain problem. You must buy all other food yourself. We here are not like those retired old cadres. We don’t have another source of income. You can only have a hard time living in the estate.”
Liu instead elected to keep his 1.5 mu of farmland, and asked the village to give him a small section of housing land adjacent to his former home. There, he built a single room home from cinder blocks and corrugated iron along the side of a road. However, Wu Rongsha, the vice director of the Tang village mediation committee, stated that the village government did not provide adequate living conditions for these villagers. “The peasants whose homes were destroyed had no good place to build their homes,” he said. “The [new] homes don’t connect with water sources. The soil is sandy and poor. The homes are also poorly made and can be destroyed by an earthquake.”
Rather, declines in leasing out rates in later phases stemmed from the resistance and adaptation of peasants themselves. Resistance strategies included communicating complaints through official channels and direct confrontation. For example, 53 year-old Li Shengli of Feng Village and other holdouts in his production team were placed on land parcels six to seven times as large as was suitable for his holdings. He and other holdouts united to protest at the village land reform office. After filing a report, the township and county governments agreed to decrease the size of the parcels and provide adequate drainage. “Actually the government’s attitude is, if the peasants don’t make any noise, do it according to the blueprint,” Li said. “If they make noise, then do it a bit more according to their requirements. The government does things according to what will be good for the dahu. But we can’t farm on land parcels that are so big.”
In the wake of this, the Feng Village government simply changed tactics by attempting to eliminate Li’s irrigation ponds. Li, however, continued to fight, blocking the construction crew’s bulldozers and ultimately saving his pond. Local leaders continued, unsuccessfully, to attempt to persuade Li. “Cadres from the township and village came many times to do work on me,” he said. “They hoped I would agree to eliminate the pond. They said, ‘by eliminating the pond, the land will be continuous, it will be better to farm.’ I said, ‘Farming requires water. If you eliminate the pond, where will I get water? Individual households can’t use big machines. Also I still want to raise fish. If you eliminate the pond, our four households will only have one more mu, which is not as good as raising fish.’ The government has to consider the laobaixing. If you eliminate ponds, where will we get water? They are only concerned with elimination. They don’t care if you live or die. Actually, the government plans this way because they don’t think about the possibility of us farming. All of the land is given to the dahu. When they reformed the land, we held a small group meeting to discuss the division of the land. In the meeting the village cadres encouraged us all to stop farming and give the land to the dahu. They said we would be happier laboring outside. But some can go out to labor, and some cannot. Laboring is not as good as farming your own land.”
Zhang Bu’s case offers an additional example. Zhang’s native Nanhe Village underwent medium and low yield land reform from 2011 to 2012. Initial plans called for the entirety of the land to be divided into large parcels, and the elimination of five of his team’s six ponds. Threats of protest by Zhang and his neighbors were enough to persuade the township to decrease the parcel sizes. But plans to eliminate ponds – including a large pond necessary for the team’s farming – continued. Like Li, Zhang responded with confrontation: When the construction teams were preparing to eliminate the ponds, I stood on the front of the bulldozer and stopped them. I said to them, “even if you all fight with me many times, I won’t let you eliminate this pond.” The construction teams had no choice but to call the village. When the village learned of my relatively stubborn temper, there was nothing they could do other than express their agreement.”
While Zhang was able to save the large pond and one subsidy pond, the elimination of the remaining ponds has strained villagers’ farming ability. Three of the four eliminated ponds “were regularly used,” Zhang said. “These days, after the ponds were eliminated, getting water is relatively more troublesome. In the past ponds were right by the fields. Getting water was relatively convenient. These days, in general, we get water for most land from the large pond. For those fields that are far away from the large pond, getting water is very inconvenient. In the past, I could irrigate my one parcel in one try. These days I have to first take the water and put it into a ditch, then funnel it from the ditch to my field. It’s a great deal of trouble.”
Statistics demonstrate the effectiveness of peasant resistance. In addition, construction project spending in 2013 increased from the original budget by two million yuan, an amount primarily focused on single household construction projects such as irrigation access. Yangchun County Agriculture Establishment Chairman Hao Yuqing confirmed the changes in plan to accommodate xiaohu. “All agriculture establishment projects are designed for dahu,” he said. “If you have small parcels on large tracks of land, the water drain points will be few. Later, peasants will offer their opinions. Hundreds of water drainage points must be added to each project area. If you don’t add them, then they will smash them [in the existing drainage system].”
Indeed, when voicing complaints and resistance failed, a great many holdouts turned to just such adaptation strategies to survive. Those placed on uneven land without irrigation or drainage access levelled the land themselves and remade the dahu-tailored water management system work for them. For example, a farmer in Nanhe Village told us that after reconstruction he was assigned 10 mu of uneven land. He solved this problem by dividing it into seven pieces in the first year, which allowed him to undertake rice farming. In the second year, he divided it once more into three pieces.

Wang Jie is Ruilin’s Head of Major Projects, making him one of the primary architects of the township’s agricultural modernization reform. He acknowledged some mistakes in planning and implementing reform. For example, village officials during Phase 1 “illegally intervened in the process,” he said, pressuring and coercing villagers to transfer their land to dahu. Village leaders “were instructed by township leaders in phase one to do the work of facilitating land transfer to the dahu to the best of their ability.”
However, while the circumstances of rapid change have rendered some less well off than others, he believes that the aggrieved are a relative, misinformed few who fail to understand the need to sacrifice for the larger good. “There is a problem with peasant thinking and awareness. We try to make them understand, but there are still some families that don’t agree. They feel you’re doing a bad thing. They don’t understand policy. These days they say cadres are all corrupt, the government is corrupt.”
Ruilin’s undertaking of agricultural modernization reform is a product of financial necessity. “Ours is an agricultural township,” he said. “Agricultural townships must rely on agriculture to develop. We must increase our rural land area to survive. We have a need for more space for arable land than anywhere in the entire county. In light of this, we must take risks and apply for funding.”
But reform reflects an understanding of the state and future of farming both in Ruilin and the nation as a whole, he believes. “These days looking at China’s agricultural development situation, who will farm the land in future? The 40 and 50 year olds of this generation can farm. But who will farm in the next generation? Which young people will want to farm after studying? They’re not willing to have a life of exertion, of drudgery and dirty work.”
The greater labor efficiency and profitability of Ruilin’s dahu farmers make them a superior form, in his view. “Xiaohu must invest three to four times as much labor. If you consider profit, subtract production expenses from production profit, the profit of dahu far exceeds that of xiaohu. How do you solve this problem? These days our high-level government also realizes this. Ruilin is a model township. Officials come from all over the province and country to see what we have done here.”

Left to Live and Die
The impact of agricultural modernization extends beyond the immediate losses of property, livelihood and agricultural productivity. Prior to the abolition of the agricultural tax and subsequent fiscal restructuring in 2006, Ruilin’s extension service was relatively broad and peasant-focused. Deputy village heads acted as full-time extension agents that regularly met with individual households and held frequent meetings. In addition, morning speaker and evening television broadcasts kept villagers appraised of production-related information, such as soil diseases, infestations, new inputs, and drought and flood warnings, as well as general community affairs.
At that time, Ruilin farmers bought inputs such as seeds, fertilizers and pesticides from small-scale, area shops. Intense competition between these shops meant that to win loyalty proprietors had to provide not just low-cost goods, but a high-level of customer service. This included informed, site-specific product recommendations, and compensating customers if those products failed to achieve the intended results – a fairly common occurrence given China’s poorly regulated domestic agricultural input market. Selling on credit – highly valued by the large number of area farmers living harvest to harvest – was another common practice. Similarly, intense competition between local grain processors ensured low prices for peasant farmers. In a sense, then, these practices and the context engendering them created a social support system for peasant farmers.
Post-2006, the budget and staff of township agritech station – which provides extension services – as well as those of village governments were reduced and redirected. In turn, the broadcasts and extension functions of deputy village heads eliminated. Yang Xiyu is the head of the township’s agritech station. As he explained, revenue restructuring rendered peasant-focused services financially unsustainable. “For a poor county like ours it was very difficult,” he said. “We depended on fiscal appropriation, and there was no way to solve this problem.”
In their place, the township and county agritech stations began sending weekly emails and instant messages to the cell phones or computers of area farmers. These stations also began posting information bulletins in local farm input supply stores. Village cadres, and later, large-scale farmers, were tasked with carrying out village extension work, for which they receive a token salary of a few hundred yuan annually.
Agricultural governance reforms expanded in the wake of agricultural modernization reconstruction in 2007. A crucial change occurred in 2010, when grain crops sustained widespread damage as a result of a disease known as red leaf lesion. Dahu complained to the township that their losses resulted from insufficient agricultural extension services, and that they received inadequate post-facto insurance compensation. They also demanded a reduction in per unit rental rates. In response, the county government required the Rural Committee System and Rural Township Comprehensive Agriculture Service Center to focus their attention on the dahu. According to Yang, supporting dahu production became a priority from that point forward. “These days the objects of our service have undergone a change,” he said. “Our emphasis is on dahu. They are the government’s demand for us.”
Chief among the reforms, township, county and city agritech stations began providing regular, individualized consultation services to dahu. Dahu Zhou Qiren, for example, reports that four to five township or city extension agents visit him once every few days to check in, answer questions and test the soil. He can also contact them if he encounters a problem, and agents will respond right away. A government official will also notify him if there is a potential hazard. In addition, the township rural committee gives him equipment when it is available to be used for testing. Yang told us that his station provides soil testing for the dahu exclusively. “This must be done regularly and for each site, given that soil content often changes,” he said. Large-scale farm-specific product testing was also initiated, using a select number of small-scale farms as extension sites. “These demonstrations provide dahu with information on variety adaptability and yields,” Yang said. “They test what products in what measures suit what environments and other products. They are often on the farms of peasants and small farmers, who receive payment from the government to grow certain varieties or use certain products.”
The township also began providing free, large-scale farm-specific trainings. These trainings, of which 20 are held on average each year, focus on topics such as such as soil testing, pesticide and chemical fertilizer use application techniques, plant protection, fine variety selection, plant disease and pest prevention and treatment. The trainings “primarily are about agricultural management, and emphasize dahu,” Yang said.
The net result of these reforms has been to divert already reduced resources for agricultural management away from peasant farmers and towards dahu. While the local government’s QQ messaging service has suited the more educated and wealthy dahu, peasants have struggled to adjust. “Dahu use their cell phones to send and receive information,” Yang said. “Peasants to this day are still not used to this method, although we’ve done it for more than 10 years… The peasants have become used to listening to broadcasts. They like some antenna programs, broadcasting stations. You can give them a paper but they won’t necessarily read it. They like to listen about new technologies, like pesticide products… They are not used to looking at their phones. In addition, the peasants who are home farming can’t read their phones. Their degree of education is on the low side… You have to directly tell them… what pesticide to use for what bug, when to apply it. They also can’t recognize the characters.”
Locals are encouraged to attend the township’s trainings, and the township takes steps and offers incentives to increase participation, such as holding trainings on rainy days outside of peak season and providing attendees with money for lunch. However, the irrelevance of the topics, and the medium itself, results in low peasant turnout. The trainings do not reflect an understanding of how peasants learn. “Peasants are not like cadres, who sit and have meetings,” Yang said. “It’s impossible for them to take an article and sit, to concentrate and take notes. The topics are not important to them. They will only go to be counted. So the result isn’t very good.”
Small and medium scale farmers confirmed that they rarely attend these trainings. Li Maorong attends “perhaps two or three times a year… [the meetings] are not helpful. When I do attend, it’s for the lunch money.”
Village extension agents are obliged to attend these trainings and subsequently pass along this knowledge to team leaders for retraining their constituents. Agents, however, lack incentives to carry out trainings for production heads. “For the village agents, there is too much work to do, more than can be done,” Yang said. “It is full time work, but they are supposed to do it in their spare time and for little additional pay… In the end the work is neglected.”
Part of the logic of the government’s agricultural reform is that dahu could serve as a model for xiaohu. Yet as 65 year-old Li Jie noted, it makes no sense for him as a xiaohu to pay attention to dahu farming practices and use them as a model. “They grow different things,” he said. “Dahu also have the luxury of buying and farming more varieties of seeds.”
In Yang’s view, the local extension service had essentially stopped serving the peasantry: “The information distribution system is broken,” he said. “These days [peasants] have relatively little information… There is less information available about the local conditions, and there is less service. Extension has been weakened. No money is given to help the peasants understand new technology… We [in the agritech station] have become passive. Now, [peasants] hear some news and come to find us… The public address system station these days, the staff are all sleeping. No one does anything… At some point, that peasants are not receiving this information will become a problem. By the time that is obvious, it is too late.”
In the information vacuum created, peasants instead turn to experience and experimenting to choose products. “When peasants find that a variety is good, they will use more areas for it in the second year,” Yang said. “Peasants must see it themselves, then they will believe. If other people tell them they won’t necessarily believe. They believe what they personally grow.”
For sixty five year-old Ma Ruibai, who farms two mu, farming information is crucial, but input shops are his only resource. “In the past you could consult with the agritech station,” he said. “But now they communicate directly with the dahu, they don’t communicate with the xiaohu. The xiaohu consult with someone when they go buy pesticide, fertilizer and seeds: when to spray what pesticide, they will tell you what to buy and when to use it. These days no one manages this. Xiaohu go to stores or ask the nongjizhan, they won’t come find you. In general I ask when I have to spray pesticide. But if you don’t buy anything they won’t tell you what to buy. There are a lot of soil diseases here. You need to consult with input sellers and the nongjizhan about the right seeds. You can save seeds, but they won’t last. They will degenerate after two years.”
Bei Daorui, a 34 year-old former zhongnong, assesses the current situation more bluntly. “Xiaohu don’t have any rural services,” he said. “They can go find some agricultural extension agent, but the agents won’t go the xiaohu. They don’t actively offer extension. There are no more broadcasts. The dahu are now the main focus. All information is given to the dahu.”
Some small and medium-scale farmers perceived that their lack of information had negatively impacted their production. Li Jie noted stated that he “had encountered losses due to lack of information, along with other xiaohu.” Dahu had seen no comparable losses, Ma Ruibai believed, a consequence of their wider market access. “The dahu buy their pesticide on the outside, and it is of higher quality than that available locally,” he said. “At one time the wheat in the area attracted pests, but the dahus’ wheat was okay.”
The consequences of decreased access to information extended beyond agriculture specifically. Numerous other peasants reported confusion about current local policies. Sixty two year-old Deng Rongshi, who is illiterate, stated that she was not clear about her rights to retake her land after the end of the contract period. “I don’t know if I can take back my land from the dahu when the contract expires,” she said. “I have heard that perhaps I can’t. I don’t know what is true or false. I don’t know what parcel of land that I gave to the dahu is mine now.”
Based on our interviews, xiaohu widely believe that the local government is profiting illegally from modern agriculture reconstruction by hiding or distorting figures and laundering money by cooperating with local government-affiliated firms. “The government’s policies for the peasants are good, but they’re changed by lower levels,” Wei Ziqi, the former zhongnong, said. “For example, rural subsidies. To this day we don’t know how much they are. They are lower every year. The TV news, it also doesn’t say how much. Whether or not the price of rural subsidies is unified, why some production brigades receive more subsidies and some receive less. What is the reason? We don’t know. The village gave the land to the dahu, the production brigade gave it to the bank. One level after another, there is definitely profit being made.”
The information gap engendered by agricultural reform has also negatively impacted Ruilin’s ecology, agritech station head Yang believes. Local peasants increasingly overuse chemical fertilizers and pesticides to save on labor costs. However, correcting this behavior was the responsibility of the government and offices like his own, a task which they no longer had the capacity to undertake. “These days most people blindly use chemical fertilizer,” Yang said. “The usage level far surpasses the standard dosage of chemical fertilizer, to the point that there isn’t a standard… But the government has a responsibility to guide peasants. This is the only way to sustainable development. This is among the problems that only the government can confront. The government hasn’t considered who will farm in the future, or sustainability.”
Dahu, however, also overuse chemical inputs, in their case in an effort to maximize yields in their short contract period. “From the perspective of the dahu, they want to maximize their profits in their contract period,” Yang said. “This is their biggest priority. They don’t think about the future. Many of them exceed standards in their use of chemical fertilizers and pesticides.”

Post-reconstruction, township officials began facilitating direct partnerships between agricultural input and supply manufacturing companies and local dahu. The goal was not only to allow dahu to buy their goods at a lower cost, but to establish the dahu as input retailers themselves. Since the start of reform, the number of input retailers in Ruilin has declined from 20 to six, of which only two are profitable.
Those two shops, however, are both government-affiliated. One of them – the Farmer’s Friend store – is run by the wife of a township official, Wu Xianming. The other – Li Shijia’s Hongzhuang Rice Production Coop – is a heavily-subsidized professional cooperative. The patronage and privileges affords them a monopoly over an increasingly large number of Ruilin’s farmers. Given Wu Xianming’s government connections, area dahu feel compelled to purchase products from him, regardless of the price. “Wu Xianming is in the government, so if dahu want things like government project subsidies, extension services, they must rely on him,” said Shi Yunba, who runs one of the remaining small-scale supply stores. “His shop sells things at high prices. But you still must buy things from him.”
Li, meanwhile, took advantage of his farm’s professional cooperative status to arrange for the leasing of four thousand mu from the township, making him the largest landholder in Ruilin. He then subcontracted the bulk of this land to 40 outside subcontracting large-scale farm operations. Implicit in the arrangement, however, is an obligation to buy inputs from and sell products to Li. These subcontractors “buy inputs from him, or they cannot subcontract from him,” Shi said. “Li’s factory is big, he can sell to the dahu on credit. The dahu also sell rice to him. He makes a dragon’s profits. He’s also the boss of an enterprise here, which is also some kind of coop. He’s a dahu [himself]. Why is he entitled to all good things? Government support?”
Wu and Li’s positions also make them both less culpable to their customers. “In the past at one time there was a lot of fake fertilizer and pesticides entered the local market and was distributed,” Shi said. “For us small shops, if the fertilizer you recommended killed crops, we had to compensate the farmers. In the end some had to close their doors. Wu Xianming also encountered this problem, but he was still a township agritech employee. Problems arose with seed rice… but in the end the government compensated him.”
Longtime farmer Li Daye also discussed an incident involving Wu Xianming. “One year, Wu Xianming promoted a new kind of product, rice seeds from outside areas,” Wu said. “But they did not suit the soil here. The rice that was grown grew only long grass, not long grain. When fall arrived, in November, only 30 percent could be harvested. That year, if you went to the villages, you could only buy Wu Xianming’s rice. Everyone cursed him. They said he cheated them. Exactly one year ago there was a problem with his fertilizer, its impact was slow. When it came time to harvest the rice, it was still green. In the end the yield was low. The unhusked grains weren’t full, they were all unripened. When they were ripe they were empty shells. The fertilizer output time was incorrect. The fertilizer was not strong. Those who sold fertilizer harmed people… Later the townspeople said, the problem isn’t the fertilizer, it’s that it doesn’t suit the two seasonal crops that are grown here. It suits those places that grow one season of rice. The efficiency time is long. We didn’t understand this, but this still clearly harms people.”
Under these circumstances, peasants absorb the costs of a flawed and exploitative system. “Actually all farming households understand this situation,” Shi Yunba said. “There are people everywhere who profit from this black-hearted money. These fertilizer producers are all profiteers. We [farmers] were duped [in this case]. We chose the wrong fertilizer. The villagers then lose money… the responsibility for correcting the risks in the input market is not at all with the institutional system…”
In light of this situation, Shi is pessimistically about his chances to stay in business. “I will have to close in one or two years,” he said. “Here I am a retailer to small-scale farmers. You can see, those who come here to buy fertilizer, they all buy 30 to 50 jin, at most one or two bags. I can’t compare with the dahu. After land consolidation, less than 30 percent of small-scale farmers remained. In another few years, only dahu will be left. Manufacturers will sell to farmers directly. This kind of model, dahu can drive xiaohu, xiaohu will let dahu help bring in fertilizer, I will naturally no longer have customers… In the future the only sellers that will be left are Wu Xianming and Li Shijia’s processing factory.”

Locals who wish to join the ranks of the dahu, meanwhile, have largely find themselves unable to do so. In more recent years, the township’s financial requirements for dahu – including an initial investment of $18.5 thousand dollars for those making an average annual income of $55 per mu – have placed eligibility out of reach for most. Many of the xiaohu with whom we spoke were interested in becoming dahu. However, they stated they lacked the necessary funds. “Local people don’t become dahu because they lack the necessary capital,” said Gan Shentian of Mei village.
Xiaohu Bei Daorong echoed this sentiment. “These days, those who want to farm are not able to,” said. “It’s good to be a dahu, but average folks are not able to become dahu. The government doesn’t know this. You have to provide a security deposit to lease land, and there are restrictions on the minimum amount you can farm. In the past it was 200 to 300 mu. You also must be able to buy a certain amount of pesticides and fertilizers. I originally wanted to farm 50 mu, but I was told that I had to contract hundreds of mu. I was told that I couldn’t contract 50 mu because of competitive bidding. I have experience in and skill in farming. But I was told that I had to contract at least 200 mu.”
What is more, locals report that the township has used its more ambiguous requirements, such as demonstrable financial strength and related production experience, as grounds to exclude locals from becoming dahu. “We [peasants] don’t have the economic strength [to become dahu], we can’t take out money,” said Liu Zuofen. “How can I contract this land? [These qualifying criteria] are all made according to local policies and interests.”
Personal connection to the local government represents the most important to selection. Xiaohu stated that the condition regarding farming experience was immaterial, as most dahu had little if any farming experience, while zhongnong were entirely excluded. “No one who was a zhongnong in the past has become a dahu,” said Wei Ziqi. “If you want to contract land, you need social connections. We peasants don’t have a social network, so the government won’t let us contract land. You might want to contract but you can’t contract. If I could contract, I wouldn’t want to go out to work.
Zhang Weijia stated that he is also interested in leasing more land. Money and relationships, not the risk involved in scaling up, prevents him: “Farming these days is low risk,” he said. Rather, “We lack the capital and connections to become dahu.”
All of the dahu interviewed during research for this article had earned the necessary funding through working in a professional capacity outside the township, while the majority had a preexisting direct or indirect connection with the county or township government. Dahu Wang Qian, for example, previously owned a textile factory and had no farming experience. She heard about the opportunity to contract land from her husband, who works as a civil servant and introduced her to township officials. Ultimately, in spite of the township’s stated goal of accessibility for locals, 75 percent of all Ruilin dahu are outsiders.

While Ruilin’s xiaohu population is declining, a perhaps equally urgent problem involves its corresponding inverse – reintegration. A great many who rented out their land to a dahu hope to retake their land at the end of the contract period. This is due to three factors. The first is that perhaps 45 percent of all who rented out in Phase 1 and 10 to 20 percent in later phases did so against their will. Production team leaders in Feng and Mei villages – both affected by Phase 1 projects – told us that 40 to 50 percent of villagers who leased their land in phase one have since expressed their desire to retake it. According to Wei Ziqi, “They [out-migrated villagers] want to come back but they can’t. The contract is fixed at six years. The contact hasn’t expired yet, otherwise they would come back.”
Shen Aida, the production team leader from Phase 1-affected Yuan village, similarly reports that half those who have given their land to the dahu now want it back. Most, he says, have become too old to do manual labor, or they were already too old. “Many people regret giving their land to the dahu,” he said. “Many of them are in their 60s and are getting too old to do manual labor outside… When people in their sixties lose their jobs and can’t find work, they have nothing to do but return to their homes and wait for the contract to expire… Especially those who do basic skill work, for which they make 200 yuan a day. Seventy to eighty percent work as bricklayers, the remainder mostly work as carpenters. Only a few work in factories. Twenty to thirty percent of those who have left are students studying outside.
Reforms and subsequent improvements in productions also inspired an increase in villagers returning or expressing an interest in returning to the land. Holdout and former zhongnong Bei Zhifeng told us that after levelled land was improved, “when [my neighbors] saw me farming, they were jealous and wanted to return. The people I used to rent from perhaps did not consider the long-term, only their short term interests.” Nonetheless, Bei lost two-thirds of his former production area after his former lessees elected instead to lease their land to a dahu.
Shen Aida would also like his land back when the contract expires in 2016, and even to expand this production area: “The land is easy to farm now. We can grow two to three seasons of rice now.” In his view, the cost of life in cities will motivate even the more skilled workers to return home to farm when they reach their 60s. “Life in the city is too expensive. Housing prices, raising children… it’s necessary to return to farm later in life.”
The second factor relates to China’s employment market, which all but forces manual laborers over 50 to find other work. In light of this reality, it is estimated that 2,284 workers will return to Ruilin in the next 10 years. Sixty-five year-old Ma Ruibai of Feng provides an example from this sub-group. “There is limited labor work for people my age,” he said. “Employers take one look at your ID and dismiss you. They say you can’t do the work. This is a difficult matter… If you’re in your 30s and 40s, work is easy to find. You can make 3,000 to 4,000 yuan a month… For many bosses, if you’re over 60, you can’t do the job. So you can’t leave and find work. If you’re over 50 you have a hard time.”
Deng Rongshi noted that many villagers in her production team want to return after the contact period ends. In particular “everyone who was not already working outside, or who has retired. They think it will be better to farm. Though I don’t know if they will be able to.”
Ruilin’s pre-reform land use system allowed such workers an easy transition into farming and, later, retirement. Post-reform conditions, however, have rendered such a return far more complex. A majority of peasants and officials expressed doubts about the willingness or ability of the local government to reintegrate migrants at the end of lease terms. A number of issues represent challenges in reintegrating migrants. First, post-levelling and consolidation, neither villagers nor the government know where household’s land is now located. As Zhang Weijia stated, “Consider the problem of freedom for individuals farming land. Now giving land to the dahu, you don’t know where your land is. It is all mixed together. If you want it later, we still don’t know how to come back. This is problem of freedom and mobility.”
Second, the land – which more than likely lies in an area redesigned for large-scale farming – will require small-scale irrigation, such as the reintroduction of eliminated ponds. “People in the team want to return to the land to farm,” As Zhang explained. “They would prefer to retake their land but lease it to others personally. But it is not easy to store water on the land now. These days the land is much easier to farm. The key problem is water. No one who rented out knows now where their land is. The return process will not be easy. There will be many related conflicts over this issue in the future. Later phases of land levelling were better done. In these places it will be easier to return.”
Bei Daorui’s case provides an example of the potential problems posed by long-term contracting for those in the latter group. The 34 year-old farmed 30 mu, 24 of which had been informally leased to him by neighbors. In recent years his neighbors retook the land not to give it to a dahu, but because they had aged out of their manual labor jobs and had no other options but to return. Because they had leased informally, returning was still an option. Those who formally leased to a dahu and subsequently age-out of low-skill labor may find themselves with fewer options. “These days some 60 year-old laobaixing are going to work in the cities but no one wants them,” he said. “Land consolidation liberated a great deal of labor, but the government must arrange work for those who were liberated. If you’re over 50, no one wants you. The dahu also do no provide labor. The government has not solved this labor problem, what all of these displaced farmers will do. People over 50 have a bitter life… If the point of land consolidation was to liberate labor, then the money was spent unjustly. It’s useless. It’s not as good as having divided the money between the people. Laobaixing have received no benefits from this. Just giving the money to the people would be more useful.” Two out of 26 households in Bei’s production team gave their land to the dahu, the rest still farm their own land. However, both of those households want to return to farm in the future.
The third and final factor involves local employment. A number of villagers surrendered their land to a dahu based on the promise, made by the village government, that their income would be supplemented by employment opportunities created by the dahu. For the majority of people, however, these opportunities never materialized. Deng Rongshi of Mei village is 65, and considers herself too old to migrate out for work. “No one wants workers approaching 70,” she said. She and her family contracted their six mu to the dahu in 2007 on a five-year contract based on their belief that they could collect rent on the land and she could earn extra income on the dahu’s farm, thus increasing their family’s overall income. “Everyone said it was better to contract out,” she said. “The village government came to me during reform and told me that a dahu is coming to rent the land. They said there would be labor work available from the dahu. But later it was different. There was no labor work. Who knew that now there would be none? Dahu only ask for peasants’ help when they really can’t find anyone else.”

Under these circumstances and considering the dahus’ lower productivity, both xiaohu and many local government officials expressed concern over the consequences of China’s agricultural modernization push for the county’s long-term food security. Yuane Zhiman of Tang Village believes the government policy of supporting under-producing dahu will have consequences for national food security. “The government spends a lot on dahu, but many don’t grow grain or they grow it badly,” he said. Their production is not as high as the xiaohu, though publicity says the xiaohu’s output is lower… I hope the dahu can raise their output, but there needs to be more oversight. They need to be more productive. How can this continue without a national reduction in output?
Such consequences are a natural outcome of dahu productivity and a lack of incentives for xiaohu to continue farming grain, Bei Daorui believes. “Xiaohu can harvest 100 jin of rice per mu, but the dahu grow only 70 jin per mu,” he said. “These days xiaohu lose money growing grains. A grain shortage will appear in this county.”
In station head Yang’s view, under these circumstances dahu and mechanization cannot replace peasant farmers. “The problem is who will come to farm,” he said. “This is a nationwide problem. Central government leaders want to solve this problem through mechanization. But the technology available in the countryside is insufficient to fill this gap. Peasants are still needed to farm. After all annual output is key, and it cannot all be from the dahu. The number of dahu here is also small, in the tens, though there is a large population. That agricultural products will suddenly all be produced by dahu is unrealistic.”

In facilitating the entrance of subsidized dahu, reconstruction has not only deteriorated the ability of xiaohu and zhongnong to make a living from farming – it is increasing social inequity while decreasing grain production. “Why does the Party want to let the dahu contract land? Gives them subsidies? Their output is not high,” said Yuane Zhiman of Tang village, a former zhongnong. “The dahu contract land, do well for themselves, but it means that us xiaohu can’t make money. This is wrong on the part of the government… There is a contradiction in agricultural production. Some people that used to have 20 or 30 mu now have only a few. The rest was given to the dahu. Some people cry, they have no land… Some dahu already have a lot of money, but they still receive a subsidy from the government. This isn’t a joking matter.”
While high-level leaders may have good intentions, at heart, Yang believes, there is ultimately little incentive to thoughtfully craft holistic policies that deal with structural underpinnings of xiaohu livelihood issues, or see that they are implemented. “These days the countryside is faced with many big problems,” he said. “A large number of the population has migrated out, there are few people at home farming. A large amount of the good farmland is occupied by industries, or is polluted, these are urgent problems… The central government introduced a lot of good policies. Frequently they are extremely practical. Or, if they are not practical in reality the original intention is good. The final results however fall far short… The central government talks a lot about agriculture being the priority. From our perspective, it has not received this position. While agriculture receives a lot of political attention, it receives relatively little economic funding. The upper level governments… don’t bother to see if their policies are actually implemented. Seventy percent of what has been outlined in policies has not been achieved… The problem is both that there is little financial incentive, and that no one wants to take responsibility for failures. This is a widespread problem in many departments, not just the Department of Agriculture. Ultimately, who is managing agricultural production these days? Is it merchants or the government? Our government did not consider this question when it was planning reform. Relatively speaking, the government values things like bird flu defense organization work, big agriculture, electricity, livestock raising. I get the feeling it doesn’t really value us here…. They don’t really value the peasants. If they were loyal this kind of situation wouldn’t exist… If it were the priority among priorities, agriculture would not be at today’s level. I think it would be better than it is. It is neglected by today’s leaders.”
Yang acknowledges that the local government, including his own station, is not helping to improve policies and conditions for xiaohu. However, he believes that the weakened condition the township and village governments have been left in as a result of decentralization has left them unable to attract strong leadership, or to oppose or adapt high-level policy imperatives to better suit local conditions and those most in need. “Creating incentives for people to take on leadership roles in the countryside and in agriculture is now a problem,” he said. “The pay is too low and the workload too heavy… Village cadres make three to five thousand yuan a year at best. Successful places are defined by successful leadership. Good leaders are attracted to run for office in places where there is investment potential. But there is no potential in poor places like this. These days there is no competition for village officer. They need to be paid relative to their work. Because the salary is low and they have no social security, many village leaders turn to crooked paths, to crime, to compensate. People are like this. A cornered beast will do something desperate. This makes sense. You should give him a rightful salary. Why would anyone choose this path, to become a village leader? It isn’t worth it. There are six people working in the township agricultural extension office. There used to be more, but staffs have been reduced because there are fewer farmers. In actuality, our work load is now greater than before… Our resources have transferred to the cultural station. This station is only responsible for peasant spiritual culture. In reality peasant spiritual culture needs improvement, but peasants cannot do without agricultural production. If you don’t have production you can’t fill your stomach. Relying on spiritual nourishment won’t provide security… We here have considered this, but the local finance department is limited, there are not enough funds… Lower level government leaders just follow orders. Their feeling is, the less trouble, the better.”
As a result of the insufficient resources available to the local government, it is impossible to attract, train and monitor dahu as required by policies. “Agribusinesses are the heart of modernized agriculture,” Yang said. “But very little is done to attract and maintain agribusinesses. They don’t take root. Government policies for attracting outside agricultural enterprise investment are still insufficient. They are not up to the required standard… There is no government monitoring of dahu operations. They exist only because they receive subsidies… The government has not resolved the problem of production management. Local governments have insufficient funding for production management. We are supposed to require dahu to use a certain amount of their funding for production management, but this is not enforceable… Some dahu have come in the last three to five years but quit because they are not good at operations management. This is not a stable situation. Agriculture production is still a long-term process, given China’s current situation. Agricultural modernization will be a long-term process. Many people who have invested in agriculture don’t understand it well. They haven’t mastered agricultural operations management. They have no long-term plan. This is nationwide.”
With the structural issues causing rural poverty left unaddressed by policy, development funds channeled to rural and areas as well as agriculture-related profits continue to be accumulated by large enterprises and middlemen like the dahu, and xiaohu are cut out. “These days there is a lot of investment in agriculture,” Yang said. “But how much is the true investment into the hands of the peasants? How much money comes from the top to the bottom? Isn’t it mostly the headmen who are truly making money? The headmen working the machines, calling for the bids? The country is all like this, the money is still given to them to earn… To solve these problems, the country needs a fundamental solution. In the past, villages saved peasants’ rice and dried it. The villages served the peasants. They served the middle, beginning and end of production. Now, the process is not cohesive. If there isn’t a good channel it will definitely not work. Everyone ignores this matter. Peasants are left to live and die. Right now it’s just merchants themselves doing work. No one is willing to decide this matter of the role of merchants.”
In the face of such obstacles, government efforts like guaranteed purchase prices, rural old age pensions, insurance and mechanization subsidies are largely useless. “There is a saying that goes, ‘raising the hogs is not as good as butchering the hogs.’ If you raise a pig for 120 yuan, other people will take 100 yuan. Your hard work raising the pig is inferior to butchering the hog. You work the land but don’t harvest the rice, but the guy who harvests it makes a profit. The basic problem hasn’t been solved. The government’s protected price of 140 or 150 is only a slogan. Peasants don’t receive this, only merchants receive it. He harvests the rice but can’t store it. But the rice that the merchants harvest is perhaps stored for the government. So his price is high. This is how society is these days, middlemen make the money… Middlemen and dahu are entitled to make a profit, but that profit far exceeds his effort. By virtue of their dryers, some make a fortune and become big bosses. This generation of peasants, in three to five years, they won’t farm. They already basically cannot under the present circumstances… These days young people are either studying or going out to work. They aren’t willing to stay home and farm. Since time immemorial, farming for laobaixing has been very difficult. These days the subsidy is good, but it is also an utterly inadequate method for dealing with a severe situation. It is useless. These days giving a family a few hundred in subsidy doesn’t mean anything. Poverty abounds. Policies like these subsidies are like blood transfusions for a critically ill patient. Transfusions are a fine short term fix, but they can’t solve the long-term problem. The patient needs emergency treatment. He needs to make his own blood.”
The millions of migrants that will be produced by agricultural modernization and related policies will fare little better, he believes. City governments lack the resources to support them. “A lot of villagers think, ‘other people’s children can study in the cities, why can’t mine?’ They earn some money, sell their house in the countryside and buy one in the city. But they will encounter a lot of problems in the city. Housing placement can take time, and they often don’t have control over where they’ll be placed. Often they can’t afford to live there. A lot of older people can’t survive in the cities. They can’t find a job. The appropriate level of industrialization has not been achieved. If villagers traded their housing land for urban huji and have social security, then at least they can survive [in the cities]. But for those without it, they can’t survive. The nation and government have not resolved these problems. How will urbanization in the future solve these problems? The promotion of urbanization should be adjusted according to local conditions. You can’t have a sweeping approach. You have to be practical and realistic. You must consider the level of urbanization that you want to reach. You must implement reforms moderately. If you implement to fast, peasants will encounter a lot of problems. This comes down to management. How do you resolve peasant’s survival? This is also a problem. When they get to urban areas they encounter many problems finding housing. One can basically solve the problem of providing food and shelter for people when they are in the countryside. Especially old people, they can support themselves in the countryside. But in the cities there is far and away not enough money.”
If the funding and oversight needed to correct problems with agricultural modernization are not provided, there may be dire consequences. “There is still a great deal of work that must be done to achieve the goals that the central government has outlined with regards to agricultural modernization,” Yang said. “If we don’t do that work, we may reach a day when this land transfer process is not smooth, and we will have problems with livelihoods. We still have deep administrative level conflicts to resolve, including in our own local government. How do we sort out agriculture production relationships? How do we promote land contracting in an ordered and stable way? There is still a lot of work to be done. The market for agriculture is burdened by excess capacity and poor central government guidance. There is no long-term strategy among the government and among agricultural operators. With regards to China’s current situation, it is still not well thought out. China has not reached the level of urbanization required to absorb peasants, and it has not reached a sufficient level of agricultural production. In the future you will encounter a lot of problems with peasant production and livelihoods. How will you solve these?”

The Illusion of Choice in China’s Countryside

tianzhong_child with tea leaves

Last summer, while conducting fieldwork in the village of Daping in northern Sichuan, I met 18 year-old Xie Hua. A native of Daping, Xie worked as a server in a restaurant in the Sichuan capital of Chengdu. She had returned to Daping for four days to attend her grandfather’s funeral. On the evening before she was to return to Chengdu, she began her goodbyes, often holding her mother and young cousin. If she could, she said, she would stay. “I know only a few people in the city. People there try to take advantage of me. But what can I do here?  How can I make money?”

Xie is one of the 150 million villagers in China who have migrated to its cities for work.  For over the past three decades, these migrants’ low-cost labor has provided the foundation for that country’s unprecedented economic ascendance, attracting heavyweight firms the world over and fueling China’s export manufacturing empire.  They have built the nation’s extensive infrastructure and massive cities with breathtaking efficiency.  From child care to auto repair, they have provided urban residents with an array of subsidized services.

The default assumption among observers has long been that China’s migrants are leaving their homes in the countryside because they are making a simple choice between two ways of life: difficult, dirty farm work and the amenities and comforts of the city.  Who, the thinking goes, if given the choice would not prefer the latter? Urbanization, by extension, is assumed to be a natural component of economic development.  As nations prosper and their cities expand and modernize, they will automatically attract the rural population.

But as Xie’s remarks indicate, the story of China’s migration is not so simple. A closer look at this phenomenon reveals a great deal about the fundamentals of China’s economic model, and why they are in great need of reform.

The Mao Era

Following the 1949 revolution, the Chinese Communist Party (CCP) sought to industrialize and militarize rapidly in the face of a number of existential threats. To do so, it implemented three policies: a compulsory agricultural produce procurement system, the rural collective system and hukou, a household registration system, amounting to an internal passport, designating one’s permanent residence and rural or non-rural status. During the Mao era, those who wished to travel beyond the administrative boundaries of their permanent residence had to receive official permission.[1]  Thus these policies gave the government control over farmers’ organization, movement and agricultural output, which could be procured at low, government-set prices, and then sold internationally at higher market prices.

The government then placed each locality in the country within a multi-tier administrative hierarchy based on population and industrial development.  Power was concentrated at the central level, while capital was disproportionally channeled to higher-ranked localities.

The state assumed ownership of all urban land, while production teams and later collectives became the legal owners of the agricultural land.[2]

A cadre management system was implemented to measure the performance of officials, with local government leaders evaluated and controlled by their supervisory units within the administrative hierarchy.  The results determined promotions and bonuses. While the effects of this urban bias were somewhat mitigated by market limitations and central government controls, at the time of the start of Reform and Opening in 1978, urban consumption was almost three times that of rural areas.[3]

The Post-Reform Era

By the late 1970s, the People’s Republic of China (PRC) was facing another legitimacy crisis, as the 10-year chaos of the Cultural Revolution and Mao’s death left its economy in shambles and ruling ideology deeply weakened.  The central government implemented a number of reforms to stimulate China’s economy rapidly by invigorating competition and increasing manufacturing.  Collectives and compulsory procurement were abandoned. Land was distributed equally among farm households, who were given land lease rights as well as the rights to largely grow what they wanted and keep the profits.  However, state-led extraction of rural labor and goods intensified under new and less direct guises.  To revive an economy that had long stagnated under Mao, the central government implemented a number of reforms to stimulate rapid growth by invigorating competition.  The core of the CCP’s strategy involved enticing foreign direct investment (FDI), growing its export manufacturing sector, and low-cost infrastructure development. In order to achieve these goals the central government created a set of pressures and incentives to push local leaders to pursue these goals.  This required not abandoning the Maoist era model, but rather adapting it.

A vast supply of cheap land and labor were essential to the process. To increase farm yields and decrease the need for farm workers, the government heavily produced and promoted the use of chemical fertilizers and pesticides.  From the 1978 to 2007, nitrogen-based chemical fertilizer consumption increased from five million tons to 50 million tons, making China the largest consumer of chemical fertilizers in the world.[4]

The state relaxed hukou rules, allowing for largely unrestricted migration. Social security and state subsidized public services such as access to education and healthcare, however, remained available only to those with “local” hukou status.  This had the effect of keeping the cost of migration artificially low for urban governments, while amounting to a tax on migrants.

The state also created a legal framework for government land takings. It formalized its right to “public interest” land acquisition and set basic compensation rates for affected farmers, with standards based on average annual yields.[5] This effectively gave the government the power to take land at will and for a small fraction of its market value, land that could then be offered at a discount as a lure for investors or be sold at auction to developers for windfall profits.

The CCP then created series of levers to influence the behavior of local leaders.  It implemented regional and fiscal decentralization, through which it ceased to guarantee budget allocations to meet local expenditures.  Thus, local governments had to rely primarily on revenues created within their own jurisdictions to meet budget requirements and fund central mandates such as the one-child policy.[6]  The cadre management system was altered to place overwhelming priority on economic growth indicators, with local leaders needing show results within short service terms, typically two to three years.

The administrative hierarchy, meanwhile, provided a powerful incentive to agglomerate and industrialize, as localities that moved higher up on the hierarchical ladder continued to receive greater fiscal resources post-reform.

To further attract overseas investors, the government centralized manufacturing to take advantage of economies of scale, establishing 15 free trade zones primarily in China’s southeastern provinces.[7] Further, the state reduced barriers to trade and implemented reliably low tariffs and basic mechanisms for converting currency.[8]

Additionally, the central government instituted a number of land and property reforms. It redefined tax rights in 1994, taking control of the consumption tax and enterprise-retained profits, a key portion of the extrabudgetary revenues of the rural state enterprises that had become the driving force of the rural economy in the 1980s. In exchange, it gave local governments full control over land premiums.[9] To increase real estate investment, the state relaxed property sales restrictions and decreased sales taxes.[10]

Expanding the Rural-Urban Gap

These policies led to precipitous declines in relative rural incomes and livelihoods. As a result of the administrative hierarchy and decentralization described above, agricultural expenditure in China as a percentage of total government expenditure declined from 15 percent in 1980 to eight percent in 2006, averaging about 10 percent over that time. Villagers were also given less access to loans than urban enterprises. Between 1994 and 1999, agricultural loans averaged just 4.5 percent of the national total, while loans for state-owned, independently-financed enterprises represented an average of 70 percent over that time.[11] From 1980 to 1998, the margin between peasant deposits and loans in rural credit co-operatives increased from 10.1 to 778.[12]

Changes in tax policies had the effect of robbing local governments of the incentive of improving the efficiency of rural state enterprises, playing an important role in their demise.[13] Overuse of chemical inputs has significantly deteriorated soil quality. China Daily reported in 2011 that the average level of organic matter in soil, crucial in determining crop output, now stands at one to five percent for arable land in northeast China, as compared with eight to 10 percent in 1950s.[14]

A speculative property market, meanwhile, has helped to fuel inflation, with the consumer price index increasing 198 percent from 1990 and 2007, and the rural price index growing 140 percent between 1990 and 2009. The purchasing price index of raw material, fuel and power increased by 211 percent in that period, with the impact of fuel costs on farmers increased due to their increased dependence on petroleum-based inputs.  The result was that while yields and incomes increased dramatically for farmers in the post-reform era, so did relative costs.  In fact, while annual rural incomes increased from 133 yuan in 1978 to over 5,153 yuan in 2009, annual expenditures have taken a greater share of that income, increasing from 35 percent of annual income in 1978 to 68 percent in 2009.

All of this greatly exacerbated the urban-rural income gap. For example, the urban to rural disposable income ratio increased from 2.2 to 3.3 percent between 1990 and 2008, while the urban to rural household savings rate increased relatively from 15.3:14.8 to 28.6:22.5. By 2008, the urban-rural per capita income ratio stood at 3.33:1. However, if urban benefits such as subsidized education and medical care are factored in, the gap is likely greater than 4 to 1.[15] Life expectancy in the large cities is now twelve years greater than the average in the countryside. The infant mortality rate is twice as great in the countryside as it is in the urban sector. Nationally, 51.2 percent of middle-school graduates continue to high school, yet the rate in the countryside is merely 7.1 percent; and the average figure for years of schooling in rural areas lags behind the urban figure by almost three years.[16]

This broad gap in income and quality of life has fed rural out-migration. China’s de facto urban population nearly tripled between 1978 and 2007, but unincorporated migrants accounted for 12 percent of this population.[17]

Thus, through 60 years of rural extraction, the Chinese government created a cheap migrant labor surplus in large part by reducing, if not eliminating, for many villagers the option of doing anything but migrating. Few would argue that farming is easy work.  But even fewer could argue that life in rural areas needs to be this difficult.

The negative effects of these policies are not limited to incomes and investment.  Hukou restrictions, including those restricting migrant children from attending public schools, have forced many parents to leave their children behind in the care of grandparents while they pursue work in distant cities. This has put tremendous strain on rural families. Recent studies have found that adolescents left behind in their villages were more likely to engage in risky behavior such as binge drinking, have increased thoughts of suicide, and are more likely to have learning disabilities and psychological problems.[18]  Suicide rates among elderly villagers have also risen dramatically in recent years.[19]

Local governments – cash strapped, eager to report high GDP numbers and urbanize to climb the administrative hierarchy ladder – have expropriated rural land with impunity. Incidents of land conversion increased from 50,000 in 1993 to 250,000 in 2002.[20] Local governments have become increasingly dependent on income derived from land takings, with land sales accounting for 26 percent of local government revenue in 2007.[21]

Wang Qian, a 52-year old native of Tianzhong village in Fujian province, is among the victims of government land takings.  In 2010, the county government expropriated half of her family’s six mu[22]  plot to build a school. This forced her family to decide between farming for income or subsistence, as they no longer had enough land to support both activities. Wang’s family received only 10,000 yuan (about $1,600) per mu from the government as compensation.  “Everything is so expensive, how can that money help me?” she said. “It’s nothing. I can spend it like that,” she said, snapping her fingers.

The escalation of land takings has in turn resulted in increased forced urbanization and growing urban slum populations. Victims of government expropriation currently constitute over 20 percent of the people meeting the minimal standard of living in cities, and the number is even higher than 80 percent in some areas.[23] Much of the blame for this lies with China’s compensation system. While victims of land expropriation often receive lump sum payments, urban hukou benefits and housing as a resettlement package, these fail to provide a means for long-term economic security.

The Widening Consequences of Extractive Policies

This economic model, however, is looking increasingly unsustainable. Rights and wage-conscious migrants are demanding better compensation, equal treatment and more choice.  According to the government-supported China Academy of Social Sciences (CASS), the number of mass incidents – strikes, protests and violent clashes – rose from fewer than 10,000 in the mid-1990s to 180,000 in 2010, more than doubling between 2004 and 2010.[24] Land-related grievances account for 65 percent of rural mass conflicts.[25]

Many migrants are voting with their feet, refusing to undertake long migrations from China’s interior to its coastal manufacturing hubs, or work in factories where conditions and salaries are particularly poor.[26] As a result, many manufacturers have been forced to move factories inland, raise wages and improve conditions, increasing costs and cutting into China’s competitive advantage in manufacturing.[27]

Moreover, China’s pillar export manufacturing and property sectors are inherently prone to volatile cycles, dependent as they are on overseas demand and unstable real estate markets.  The specter of millions of unemployed and adrift migrant workers puts additional pressure on the government to prop up these sectors through policy.  Maintaining China’s competitive advantage in export manufacturing has required artificially suppressing the emergence of a more stable domestic consumer economy. Currency devaluation has been a key tool in keeping the cost of China’s exports low. The government accomplishes this by setting interest rates lower than the inflation rate, discouraging consumer spending and encouraging saving.  It then draws on household savings to buy U.S. securities, inflating the value of the dollar and deflating the relative value of the yuan. This policy has amounted to a hidden tax on savers totaling billions of dollars over the past decade. As a result, China’s consumer spending has dropped in the last decade as a portion of the overall economy, from about 45 percent of gross domestic product to about 35 percent.[28]

The participation of China’s banks in land financing schemes has resulted in massive amounts of debt. Local governments have leveraged future land sales to secure banks loans to finance infrastructure projects and attract greater investment. China’s banks – managed by ex-officials and encouraged to lend by centrally-set low interest rates – have been eager to lend to ostensibly safe local government financing platforms.  As a result of this leveraged lending, local government debt burdens stood at 10.72 trillion yuan by the end of 2010.[29]

All of this has led to a dangerous economic imbalance.  Investment and exports as a percent share of GDP increased 12 percent to 52.6 in 2010, while consumption decreased 10 percent over that time to 33.8 percent.[30] Construction occupied a 13 percent share of GDP.[31]

The financial crisis of 2008 laid bare many of the frailties of China’s economic model.  When declining overseas demand led to dramatic factory slowdowns and millions of migrants lost their jobs, 30 million migrants returned to their land in the countryside.  Beijing reinvigorated the economy with a massive 628 billion dollar capital injection.  Banks in turn lent to state-owned enterprises, local governments and their financing platforms.  Migrants returned to work in factories and on construction sites, funded by volatile overseas demand, debt and speculation.

China’s economic model has also taken a tremendous, well-documented toll on its environment.[32] Evidence of the consequences of overuse of chemical farm inputs alone is compelling. Of the 26 lakes and reservoirs under monitoring last year by the Ministry of Environmental Protection, 42.3 percent are “eutrophicated,” a process that can lead to a proliferation of plant life caused by excessive levels of phosphorous and nitrogen.[33] Forty-seven percent of area-sourced pollutants in China come from agriculture.[34] Farm fields are now a greater source of water pollution in China than factories.[35]

In his seminal 1977 work Why Poor People Stay Poor: Urban Bias and World Development, economist Michael Lipton warned that this kind of urban and industrial-biased development model was fundamentally unsustainable. Rapid industrialization policies that rely on and broaden sectoral gaps and exploitation are, he wrote, “doomed to self-strangulation.”[36]

State Efforts to Rebalance the Economy

The Chinese government appears increasingly aware of the need to reform and rebalance this system. Overall government investment in rural areas has risen from 1.339 billion yuan in 2000 to 8.3 billion yuan in 2009.[37]  This includes a proposed 12.8 percent in rural outlays in the 2010 budget.[38]  For seven consecutive years through 2010 the Party’s No. 1 Document, which provides policy blueprint for the year to come, targeted primarily rural issues.[39]  The 2006 11th Five-Year Plan included trillions of yuan invested into rural education, medical services and infrastructure construction.[40]

In response to this year’s financial crisis, central leaders have called for increasing rural investments and changing key policies. For example, at the annual parliamentary session earlier this year, Premier Wen Jiabao promised to “vigorously adjust income distribution, increase the incomes of low and middle-income groups, and enhance people’s ability to consume.”[41]  In a recent interview, Central Rural Work Leading Group Deputy Chief Chen Xiwen suggested that China reform the hukou system to provide migrants with a path to obtaining social security and public services equal to those of urban “residents.” Further, he suggested that public services in the countryside such as education and health need to be equalized with those in urban areas: “This would give migrant workers the opportunity to make their own choices, but would also give the government time to transition.”

However, state spending on rural areas as a percentage of overall government investment has decreased in the past 20 years, declining from 11 percent in 1991 to 8 percent in 2006, averaging 9.3 percent over that time.[42]  According to Urban Development and Environmental Research Institute Deputy Director Wei Houkai, in 2010 the government invested 87 percent of fixed assets in urban areas and big cities.[43]

Moreover, much of the central government’s rural investment has been targeted at initiatives that have aggravated income disparity within the countryside and promoted unsustainable development. The PRC is expanding rural land registration initiatives as well as experimenting with allowing farmers to mortgage their land, paving the way for the removal of longstanding legal restraints on the transfer, sale or mortgage of agricultural land.[44] This despite the unreformed and undeveloped state of institutions that could protect farmers’ interests from predatory lenders and speculators, such as the legal and banking systems, compensation and resettlement provisions, and consumer protection agencies.

Further, the Ministry of Agriculture’s five-year plan emphasizes land consolidation and expanding agricultural mechanization, including the promotion of genetically-modified seeds.[45] Based on the experience of multiple international development contexts similarly lacking in institutional supports, when combined with the ability to mortgage or sell land, growers’ dependence on such expensive inputs frequently leads to rising rates of landlessness.

State efforts to develop rural tourism have likewise often reproduced China’s wealth gaps on a village level.  Zhao Lin is a resident of a picturesque Tibetan village in western Sichuan.  At the turn of the last century the local government proposed building a road into the village to develop its tourism potential.  Leaders promised that locals to be employed in the building effort, 50 percent of gate revenues were to be shared with residents, and a second road through the other half of the village would soon follow. Zhao’s son participated in the road construction.  At the urging of local officials, Zhao borrowed 30,000 yuan (currently $4,700) to convert her home into a guest house.  Ten years later, her son had yet to be paid for his work, residents had received only 10 percent of gate revenues, and there were no plans to build a second road.  The vast majority of visitors remained at or near the road, while Zhao – whose home was 1.5 miles away from the road – estimated that she received two to three guests a year, while her debt remains unpaid.

Many of the steps the state has taken to aid its rural poor have been beneficial only in the abstract, and in practice may have exacerbated existing issues. The government has, for example, significantly strengthened villagers’ property rights through the creation of an extensive legal framework over the past 30 years.  Yet that legislation has resulted in no discernible improvement in villagers’ land tenure security, coinciding as it has with skyrocketing government land expropriation rates.

Other steps address only the negative externalities of China’s economic model, rather than the root causes.  A revised Land Management Law, likely to be released early next year, will reportedly call for significant increases in compensation rates for government land takings. While a positive step, higher compensation rates will not only be difficult to enforce given the budget constraints facing many local governments; they will not solve the issue of providing long-term assistance to victims of government land takings.

The central government has responded to this year’s dramatic economic slowing and layoffs in factories and at construction sites by taking steps to bolster its key industries, sharply cutting interest rates, reducing reserve ratios and devaluing the yuan to boost its export manufacturing and construction sectors.[46]  Another stimulus package – albeit far smaller in scale to that of 2008-2009 – appears to be in the offing.[47]

More recently, the CCP has increasingly supported initiatives linked to the practices espoused by China’s growing New Rural Reconstruction (NRR) adherents. NRR is an alternative development movement of Chinese academics, volunteers, activists and social workers that has gained strength over the past ten years. While NRR organizations and projects may share no formal connections, they are devoted the goal of reversing the urban-rural flow of resources and creating sustainable, self-sufficient communities through community strengthening, cooperation and skill sharing among villager households, and a return to traditional farming practices.

Recent CCP five-year plans call for investment and training for farmers focusing on traditional agricultural practices, seed development, production, storage, branding, and marketing, allowing farmers to reduce their costs and improve soil and product quality while taking control of the supply from middlemen.  The Ministries of Agriculture and Land and Resources have recently shown interest in agricultural cooperatives, organic farming and the use of less harmful pesticides. Tourism schemes that emphasize preservation, ecology and revenue sharing are also gaining some support.

Co-ops that register with the government can operate tax free and gain easier access to low interest rate loans. However, these initiatives – with their emphasis on ending or reversing the flow of agricultural labor, long-term investment and farmland preservation – continue to run in direct opposition to the powerful imperatives of the local government incentive structure.  Further, the community development and solidarity so essential to rural co-op sustainability constitutes a threat to local government power. As a result, cadres have little incentive to support NRR initiatives, and may be inclined to suppress them. It remains to be seen whether such initiatives can succeed in providing villagers with greater economic opportunities.  To date, however, there is little evidence to suggest that market-oriented co-ops in China have achieved anything more than isolated success.

Ultimately, perhaps nothing short of reforming structural policies – the cadre management system, the hukou system and the administrative hierarchy – can allow for genuine balance and sustained opportunity in China’s countryside and economy as a whole.

Nonetheless, the NRR movement and the government’s partial support of it are signs of hope that a consensus is growing regarding the root causes of China’s economic and social challenges and the dramatic and innovative solutions urgently needed to solve them.  Politicians, scholars and activists are realizing that the key to long-term stability is creating the conditions that allow for genuine choice of livelihoods for villagers and migrants like Xie Hua.

For now, Xie can look forward to her limited opportunities to reunite with her family. “I will see them again in five months for Spring Festival,” she said. “That’s just the way it is.”

[1] Chan 2009, P. 199.

[2] Oi 1999, P. 18-19.

[3] Kelly 2007, P. 5; National Bureau of Statistics of China.

[4] http://www.chinadaily.com.cn/china/2011-07/18/content_12919648.htm

[5] Article 47 of the Land Management Law and accompanying implementing regulations set land compensation at 6-10 times the average annual production value over the last three years.

[6] Kung, Xu and Zhou 2009, P. 7.

[7] Walton 2003, Pp. 25-26.

[8] Steinfeld 2010, P. 28.

[9] Kung, Xu and Zhou 2009, P. 12; Kai at 7.

[10] Xie et al. at 1379; Huang et al.

[11] OECD. China in the Global Economy: Agricultural Policies in China after WTO Accession, 2002.

[12] OECD. China in the Global Economy: Agricultural Policies in China after WTO Accession, 2002.

[13] Kung, Xu and Zhou 2009, Pp. 10-11.

[14] http://www.chinadaily.com.cn/china/2011-07/18/content_12919648.htm

[15] Prosterman, Roy, Keliang Zhu, Jianping Ye, Jeffrey Riedlinger, Ping Li, Vandana Yadav. “Secure Land Rights as a Foundation for Broad-Based Rural Development in China: Results and Recommendations from a Seventeen-Province Survey.” National Bureau of Asian Research Special Report #18, 2009.  Print.

[16] Id.

[17] Chan 2010, Table 4.

[18] http://www.foreignpolicy.com/articles/2012/05/03/chinas_ipad_generation

[19] Wang Ximing 2009.

[20] Kung, James Kai-sing, Chenggang Xu and Feizhou Zhou.  “From Industrialization to Urbanization: The Social Consequences of Changing Fiscal Incentives on Local Government’s Behavior.”  Institutional Design for China’s Evolving, Market Economy. (forthcoming). P. 24.

[21] Tsui at 8.

[22] (mu = 1/6 acres, 1/15 hectares)

[23] Zhang and Lu. “Compensation for Compulsory Land Acquisition in China: to Rebuild Expropriated Farmers’ Long-Term Livelihoods.” 2011.

[24] http://www.cbsnews.com/8301-503543_162-20034669-503543.html; http://www.nytimes.com/2011/12/15/world/asia/chinese-village-locked-in-rebellion-against-authorities.html?pagewanted=all.

[25] http://www.landesa.org/wp-content/uploads/Research-Report-2010-Findings-from-17-Province-Survey-of-Rural-Land-Rights-in-China.pdf

[26] Kelly 2007, P. 10.

[27] http://www.nytimes.com/2012/02/18/opinion/chinese-labor-cheap-no-more.html

[28] Barboza. http://www.nytimes.com/2011/10/10/business/global/households-pay-a-price-for-chinas-growth.html?pagewanted=all

[29] Tsui 2011.

[30] http://monthlyreview.org/2012/02/01/the-global-stagnation-and-china

[31] http://monthlyreview.org/2012/02/01/the-global-stagnation-and-china

[32] http://www.nytimes.com/2011/06/04/world/asia/04china.html

[33] http://www.chinadaily.com.cn/china/2011-07/18/content_12919648.htm

[34] http://monthlyreview.org/2012/02/01/ecological-civilization-indigenous-culture-and-rural-reconstruction-in-china

[35] http://www.guardian.co.uk/environment/2010/feb/09/china-farms-pollution

[36] Id. at 24.

[37] National Bureau of Statistics.

[38] Macartney, Jane.  “Wen Jiabao Targets 8% Growth and Promises More Rural Spending for China.”  The Times, Mar. 5, 2010.  http://www.timesonline.co.uk/tol/news/world/asia/article7050786.ece.

[39] Lan, Xinzhen. “Rural Imperatives: The No. 1 Document Outlines Plan for Agricultural Efforts.”  Beijing Review, Mar. 4, 2010.

[40] http://monthlyreview.org/2012/02/01/ecological-civilization-indigenous-culture-and-rural-reconstruction-in-china

[41] http://www.france24.com/en/20120305-china-premier-cuts-economic-growth-target-wen-jiabao-inflation-parliament

[42] National Bureau of Statistics.

[43] http://english.caixin.com/2011-12-28/100343683.html

[44] http://www.futuregov.asia/articles/2009/sep/20/china-extends-rural-land-registration-pilot/; http://www.eeo.com.cn/ens/2011/0729/207470.shtml.

[45] http://www.isaaa.org/kc/cropbiotechupdate/article/default.asp?ID=8982; http://english.agri.gov.cn/Topics/12th/201204/t20120428_4365.htm

[46] http://www.nytimes.com/2012/06/08/business/global/china-cuts-interest-rates.html?pagewanted=all

[47] http://www.nytimes.com/2012/05/31/world/asia/in-china-a-new-round-of-stimulus.html

A Comprehensive Approach to Securing Land Tenure in China

daping farmer with knife

Landesa.org, October 2011

On a recent visit to Tianzhong, China, I was reminded of how many of China’s rural development, planning and justice challenges have roots in the country’s centrally-planned and nationally-controlled policies.

Officials in Tianzhong, like local officials across China, have recently carried out a series of land expropriations.  And farmers had been compensated with about $1,500 (USD) per mu (1/15 of a hectare), only a fraction of the true value of the land. Tianzhong’s farmers, like many farmers across China were understandably frustrated.

Across China this is a problem because national tax laws provide local officials with exclusive rights to land conversion fees. And the vaguely-worded public interest clause in China’s property laws gives local governments broad expropriation privileges, while nationally-mandated compensation standards require officials to compensate farmers by providing only a fraction of land market value.

In addition, banks managed by ex-officials and encouraged to lend by centrally-set low interest rates and directives, are eager to provide loans for government-affiliated projects.  Thus local leaders will sell land to developers, leverage sales for greater equity, then invest in infrastructure projects with the aim of attracting more investment and driving up real estate prices. In China, converting land remains the most direct and efficient means for local governments to fill their coffers.

A related and recently promoted policy further undermines farmers by allowing local leaders to expropriate arable land for development so long as it is offset by a comparable amount of arable land. This has resulted in even more farmers being moved from their homes to new apartment blocks—forcing them to commute (sometimes long distances) to their farms.

On a macro scale, the trend appears to be towards separating farmers from their primary source of identity and social security – their land – and forcing migration to cities where, as a result of China’s household registration system (hukou), they are still registered as rural dwellers and lack the same access to urban social services as official residents and are treated as second-class citizens.

There are a number of possible approaches for addressing the problem of land tenure security in China.  These include advocating for national reform of the public interest clause, compensation standards, the cadre management system (which encourages officials to focus on short-term gains) and China’s tax laws.  Legal aid, legal rights education, and land rights titling all can empower those who would resist expropriation or compulsory leasing.

While advocating for these large-scale top-down reforms is worthwhile, major change is unlikely in the short-term.

China’s economy is presently dependent on revenue from land takings and cheap migrant labor.

Not only would the reforms necessary to end a practice like land expropriation require a restructuring of China’s economy, they would also require political reforms the Chinese government is not ready to undertake.  Beijing knows its present economic structure is unsustainable, but it is still hoping to restructure gradually without causing economic and social instability.

Generally, China’s government prefers to start small with experiments to see what works before taking reforms to a national scale.  In the past it has crafted vaguely-worded legislation on a variety of sensitive topics to allow local-level experimentation.

The household responsibility system that broke up the collectives and gave families lease rights to land began as just such an experiment in the late 70s in a village in Anhui.  Export manufacturing began in a similar experiment in the early 80s in Shenzhen, then a sleepy fishing village.  Currently, experiments in hukou reform are being carried out in villages outside of Chengdu and Chongqing.

In part because of this, struggles over property rights are presently taking place in towns and villages across the country.  An economic approach to improving land tenure security should also be considered. Such an approach would help local governments craft development plans that are financially viable as well as sustainable, equitable and reduce land taking.  Feasible plans must conform to the present demands of the cadre management system by generating revenue for the county government in the short and long term.  The process for creating such plans begins on the ground with examining a village’s specific challenges and strengths.  What are the local government’s revenue needs?  Are the local conditions conducive to other, less destabilizing development models?  Such development alternatives can plug the revenue gap that typically necessitates land takings.

In Tianzhong, for example, sustainable, equitable development that addressed site-specific needs and worked from the village’s strengths would include cooperative farming, which could provide a means to raise and stabilize incomes on a large scale primarily by creating a single brand and eliminating competition and price-fixing middlemen.  A plan can be developed that ensures revenue is used to provide a basis for the kind of equitable and sustainable growth that provides true tenure security.

Large-scale land rights reform will not come quickly.  But the process can be expedited by providing a plan for how to increase land rights security on a small, site-specific basis, thus providing development alternatives that can lay the foundation for the kind of legal and political reform that cements those rights.  In so doing, we can more clearly articulate and powerfully advocate for our vision for the future, one wherein smallholder farmers in China have the ability to define success on their own as well as the means to achieve it.