Sunday, April 13, 2014

Subsidizing Factory-Style Rice Farming

China's official strategy for addressing agricultural problems is to replace traditional peasant-style farming with an industrial-style model of standardized mass production. The transformation is taking place gradually, one link in the supply chain at a time. One key strategy is to standardize products by concentrating the supply of inputs like breeding stock and seedlings on large-scale factory-style operations, often with subsidies.

An example is a 2-year-old campaign to promote concentrated seedling (集中育秧) farms as a strategy to promote double-cropping of rice. Dim sums blog reported on the initiation of this program in 2012 with a 100 million yuan fund supplemented by provincial funds. The program gives subsidies to centralized companies, cooperatives and large farms that grow large volumes of rice seedlings in greenhouses or plastic tunnels that are supplied to local farmers and transplanted--preferably with machines--in the early spring. This "early rice" is harvested in mid-summer and followed by a second rice crop harvested late in the fall.
Rice seedlings are grown in trays in "factory"-style greenhouses 
with controlled temperature and irrigation...

 ...or in concentrated plots

The program was prompted by concern that many farmers had given up double-cropping rice because the early rice crop requires too much labor to transplant. Most people don't like the taste of the early rice anyway. Officials obsessed with numbers and quotas are desperate to maximize rice output, even if the product is not really wanted. Early rice has always been largely a policy crop. It was over-produced during an earlier panic in the 1990s; then its production was discouraged in the early 2000s; now it's being encouraged again.

Guangxi Province's Xing'an County has established its first "factory-ized" (工厂花) seedling production base with strong support from upper levels of government and the joint efforts of various departments. The project is described as a response to the "Number 1 Document's" directive to explore new methods and technologies for increasing grain production and farmers' incomes. The base reportedly supplies seedlings for over 5000 mu of rice fields (820 acres), and the rice crop got started two weeks earlier than usual.
The trays of seedlings may be transplanted to fields by machine...saving labor...

...or they may be transplanted by hand.

Like many Chinese programs, the seedling-supply effort has been ramped up rapidly by mobilizing the communist party organization using a combination of carrots and sticks. In January, Hubei Province agricultural officials formulated a plan and ordered each county and prefecture to make plans to increase the area covered by the early-rice concentrated-farm seedlings. Each township had to sign a responsibility agreement to reach a goal for "concentrated rice-transplanting." Performance on the rice-transplanting campaign was included in the work-performance evaluations for local officials. In Jianli County, officials set a target that would boost area covered by the program by 8% this year, and they set a goal to start 17 new farmer "cooperatives" to supply the seedlings. Hubei Province says area supplied with seedlings by the "concentrated" bases increased 25% this year.

Subsidy funds come from various sources. Major grain-producing Hubei counties received "award" payments totaling 15.9 million yuan ($2.5 million) to fund 52 key county-level seedling supply bases. Some local governments kicked in their own funds. Jianli county budgeted 150 million yuan "from various sources," and several counties gave special awards of 2-to-3 million yuan. Yangxin County allocated 30% of its central government award (for being a major grain-supplying county) to support the program and allocated an additional 500,000 yuan to buy machinery.

Each locality in Hubei picked a main seedling supplier to support, and urged farmers to sign agreements to purchase the seedlings from that supplier early in the year. This contrasts with farmers' customary method of going to a market and haggling over seed prices. In Jianli County, each "seedling factory" (育秧工厂) signed contracts to supply fields covering 130,000 mu (21,415 acres). Officials are "exploring" ways of unifying purchase of seeds by members of grain-planting cooperatives and machinery cooperatives, family farms and large-scale rice farms.

Provincial and local governments are offering training classes and advisory services to boost implementation of the seedling-supply program. Counties took advantage of the slow winter months when farmers aren't busy to hold training sessions. There are multi-level trainings--classes at the county level, T.V. programs, explanatory materials, township training, face-to-face training and advisory services over the telephone.
Banner reads: "Implement concentrated seedlings; strengthen grain production." 
The desperation to boost rice production numbers as villagers stream out of their fields to work in factories and construction sites is the driving force behind the program.

China's "industrialization" (产业化) of agriculture is a strange hybrid of communism and capitalism. "Industrialization" can easily be mistaken for a "capitalist" endeavor, but it has been a sacred mantra of communists since the days of Stalin and Mao.

China's unique melding of politics and business and its vast bureaucracy appears to have the capacity to ramp up big programs in a short time. In reality, it's a big cat-and-mouse game. Subsidies come from all directions to support Potemkin-style structures and machinery. Targets, quotas and agreements are sent down from one level to the next until they finally reach the farmers. Farmers are rounded up for a meeting where they become instant members of a "cooperative," or officials go door to door pressuring villagers to sign contracts to buy seedlings. The farmers make a show of complying by submitting fake statistics and planting fields along the road where officials can easily see them from their caravans of shiny black sedans. Farmers then continue to go about their business after the officials go home or move on to the next campaign. The result is chaos, confusion, and acrimony--exactly the opposite of the order (序), "information-ization" (信息化), and harmony (和谐) the communist party is supposedly trying to achieve.

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