China's agricultural sector is made up of scattered, fragmented peasant farmers who have an average of about 1 acre of land broken up into 4-to-5 small plots. The government's "agricultural industrialization" strategy involves linking up these small farmers with strong agribusiness companies who provide them with a marketing channel and a source of technical and market information.
These agribusiness companies are called "dragon head" enterprises. The dragon is a benevolent creature in Chinese mythology, and "dragon head" refers to the traditional dragon dance in which a series of dancers insider the dragon costume follows the dragon head in a nice orderly line. The company is a "dragon head" that leads the farmers into the market. The farmers don't need to know where they're going; they just follow the dragon head wherever it goes.
The government designates companies that meet criteria for size, success, technical capability, and promise for "pulling along" farmers in the dragon dance by giving them a market for their products and providing technical information. (Each class of "dragon heads" no doubt also represents hundreds of banquets and gallons of liquor as well.) There are dragon heads with designation at the national, provincial, and city level.
There are hundreds of national-level dragon heads. A new set of 59 companies were named national-level dragon heads in October. The Ministry of Agriculture has a monitoring and assessment system that checks up on dragon heads every two years and adds new companies or removes the designation from those that no longer qualify. The new set of dragon heads are from just about all provinces, but seems to be heavily weighted toward the northeast. There are 16 from the three northeastern provinces while many other provinces only have one or two. They include various meat, rice, flour, fruit juice, milk, "food," "biological," and pharmaceutical companies. Most seem to be based in small cities. It includes a poultry company in Da'an City of Jilin Province, the New Star pork company in Zigong City of Sichuan, and the North Andrew company in Yantai of Shandong, one of the top four apple juice exporters.
The dragon heads are an example of China's curious approach that uses private companies to carry out government policies and strategies. The announcement of the new dragon heads states " it is hoped that these enterprises...will seriously study implementation of the communist party central committee and state council’s projects and policies for advancing agricultural industrialized management."
The final paragraph reads like a laundry list of China's new economic strategies. The dragon heads are supposed to compile experience from the world financial crisis and ways to help farmers increase their incomes. They are to help change the mode of development, "stabilizing" the external (foreign) market and expanding the domestic market, upgrading product structure, innovating, and absorbing new technology. They are instructed to improve product quality and safety, build industrial chains, develop standardized production, and pay attention to farmers' interests.
The dragon heads are to strengthen their ability to "pull along" farmers from an expanding radius, promote stable agricultural development and rural prosperity and harmony.
The dragon "dance" may be an apt metaphor. To some extent it is a choreographed dance for show since dragon heads often just go through the motions in their assigned responsibility to help farmers.