Farming Structure Change Encouraged in 2013

The "Number 1 Document" will emphasize a transition to larger-scale farms next year, according to a reporter's posting on the Economy Reference News microblog.

The document will call for rural households to remain the primary operators of farms while encouraging innovations in arrangements that create large individual-operated farms, family farms, cooperatives, and contracting relationships between farmers and companies. However, commercial enterprises will be discouraged from renting large tracts of land from rural households or renting on a long-term basis in order to prevent them from converting land to non-grain or non-agricultural uses.

The campaign for new farming arrangements is motivated by the massive outmigration of rural laborers, aging rural population, the emerging dominance of part-time farming and the conundrum of "who will farm"? Against this background, fostering new-style farms has become more "urgent."

This is not a new strategy. A document on rural strategy issued by the third plenum of the 17th Party Congress in 2008 encouraged such explorations. Since then many local governments have been experimenting with setting up land rental markets and giving subsidies to large farms and awards for consolidating plots of land. Look for these to become national policies next year.

Don't plan on investing in Chinese farmland. At a meeting of the standing committee of the State Council this week it was pronounced that rural households are not only the appropriate operators in a fragmented small-farm system, but also appropriate as the main operators of commercial-scale farms. At an agricultural work meeting, Minister of Agriculture Han Changfu said commercial enterprises are welcome to invest in agriculture but they are not encouraged to enter into long-term land rentals.

Han said that 20 percent of rural land has been transferred (up from about 4 percent in the mid-2000s) and commercial-scale operation of farms has increased. He said that small-scale and larger-scale farms will coexist for a long time, presumably an assurance that farmers will not be forced off their land. Han said consolidation of land must be coordinated with rural peoples' employment, migration and urbanization. Companies, he said, must "pull along" rural people, not replace them as producers.