Cloud-based Farming Scams Proliferate in China

Four Chinese government departments issued a warning about “cloud-based" farming scams ahead of the lunar new year holiday this week. 

The warning posted jointly by the Ministry of Agriculture and Rural Affairs, Bank Supervision authority, public security bureau, and State Administration of Market Supervision alerted Chinese citizens that cloud-based cattle, fish, tea, and vegetable farming frauds have become rampant. The Ministry of Agriculture issued a similar warning about cloud-based farming frauds last September.

A "cloud cattle farm" in Ningxia Autonomous Region
featured on China Central TV (reposted on Youtube).

One scheme featured in a November article invited investors in Shanghai's posh Xuhui District to invest RMB 5000 to own a cow on an overseas farm with the promise of high returns. Investors were invited to view videos of the farm and monitor their cow's daily life on a video feed. One investor raised his investment to RMB 3 million before he learned that "his" cattle had been bought back by the company in exchange for coupons giving him ownership of 60,000 pounds of beef he had no way of redeeming. The company let him put the beef up for sale on consignment but there were no takers. Shanghai police found that the farm did not actually exist and the video footage had been borrowed from elsewhere. 

According to this week's warning, the frauds often hype science and technology-based farming and other hot topics like rural life, organic ecology, smart agriculture using forged videos and pictures of farms and ranches to fabricate or exaggerate the actual production conditions. They promise low risk and unrealistic high returns. The fraudsters use the Internet and mobile apps to conduct operations and collect and disburse funds. Some operate like a ponzi or multi-level marketing scheme by paying off early investors with money from later investors or inducing participants to recruit more people to join to expand the pool of funds. 

Illustration from a November article warning against
fraudulent online farming investment schemes.

Ironically, China's agriculture departments have used similar fraudulent approaches to promote agricultural ventures for decades. The Internet is littered with shiny images of space-age-looking farming ventures. Agricultural officials constantly hype high-tech farming practices by installing highly subsidized equipment and facilities on model farms and demonstration villages. They then bring in teams of village officials on sponsored tours to observe the new techniques. Officials then borrow money to build the facilities in their home villages which promptly fail because they are unviable without subsidies received by model farms. Failed techniques and farming enterprises have been promoted with staged, doctored, or photoshopped images since the Great Leap Forward and Dazhai, including schemes to feeding wheat straw to cows, communal livestock-raising compounds decimated by disease, seed subsidies used to push lousy seeds from a local monopoly, fake farmer cooperatives set up by officials to meet quotas or run by companies to get tax breaks, intercropping corn and soybeans, and countless abandoned greenhouses.