35126 v 3 Social Assessment Report for World Bank Financed China
Agricultural Technology Project
Public Disclosure Authorized Heilongjiang Sub-report
Contents
Chapter1 Project Background ...... 3 1.Agro-tech park ...... 3 2.Cow industry ...... 3 3.Live pig industry ...... 4 4.Soybean industry...... 4 5.Potato industry ...... 4
Public Disclosure Authorized 6.Protected agriculture ...... 5 Chapter 2. Introduction and Analysis of Established Projects...... 6 Section 1 Stockbreeding Projects ...... 6 A.Cow sex control project of Daqing City...... 6 B. Daqing Yinluo Dairy Industry Integrated Technological Demonstration Project...... 9 C. Cow Technological Demonstration Project of Fuyu County...... 11 D. Antibody-free milk project of Hulan County ...... 14 E. Harbin Sanyuan boar propagation and performance measurement project ...... 16 F. Cow technological popularization & integrated demonstration project of Shuangcheng City ...... 17 G. Cow project of Zhaodong Project...... 20 Public Disclosure Authorized Section 2 Planting Projects...... 22 A. Soybean project of Bin County ...... 22 B. Soybean active peptide fine processing project...... 24 C. High-oil soybean technological popularization & integrated demonstration project of Fujin City...... 26 D. Soybean project of Hailun City...... 29 E. Potato seed project of Nahe City ...... 32 F. Protected agriculture project of Daqing City ...... 34 G. Harbin Dongjin red grape production project...... 36 Section 3 Protected Agriculture...... 38 A. Harbin new energy integrated utilization and green product development project:...... 38 B. Vegetable seedling breeding & technological popularization project of Hailin City ...... 42
Public Disclosure Authorized Chapter 3 Exploration into Company + Farmer Pattern ...... 45 I. How can “company + farmer” avoid and cope with market and technical risks in agricultural industries with different distinctions...... 45 1. Source of seed and breeding ...... 45 2. Planting and stockbreeding ...... 46
1 3. Primary products and high-end products ...... 46 4. Conventional agriculture and protected agriculture...... 46 5. Division of labor and collaboration in industrial chain...... 47 II. Discussion of other organizations involved in company + farmer ...... 47 1. Government’s functions:...... 47 2. Major families:...... 48 3. Association...... 48 Chapter 4 Attitudes of Provincial Project Officials towards Project...... 49 Chapter 5 Attitudes of SA Team towards Project...... 49
2 Chapter1 Project Background
The Heilongjiang Provincial Agricultural Development Office has included the agro-tech park, cow, live pig, soybean, potato, ecological industries as the focus of support under the World Bank Financed Heilongjiang Agro-tech Development Project according to the actual situation of the province and the “10th 5-year Plan” for agricultural development. The selected projects cover key problems in advantaged agricultural industries and ecological environment building of the province. By combining technological development with demonstration, popularization, combining project construction with industrialized operation, this project is aimed to improve the technological level of agricultural production in Heilongjiang and the market competitive power of farm products, giving play to the demonstrative role of hi-tech. Faced with the new situation of China’s entry into the WTO, Heilongjiang will develop its advantaged industries, solve key technical problems in production, supply and marketing links, further strengthen the agro-tech advance and improve the market competitive power of farm products by virtue of the World Bank’s loan.
1.Agro-tech park
Aiming at the situation of low agro-tech level, slow popularization of technical achievements and inability of hi-tech to be popularized in time in Heilongjiang, the integrated agricultural modernization project will be executed in the Harbin Agro-tech Park to demonstrate farming and stockbreeding hi-tech, incubate hi-tech and potential technical achievements in the field of agriculture; allocate techniques, funds and policies with focus on leading enterprises, give full play to their driving action; conduct the agricultural structure optimization and industrial upgrading through an efficient organizing and operating mechanism in adaptation to the trend of globalization in economic development and market competition, practically increase the overall quality and benefit of agriculture; through the park’s training and education function, train agro-technicians and improve the technological level of farmers, in order to fulfill the objective of efficient, sustainable agriculture, increase income and competence of farmers.
2.Cow industry
One is to set up quality cow embryo production bases, which will help realize the grand goal that the stockbreeding of Heilongjiang takes up 50% in agriculture and the revitalization plan of the dairy industry, drive the provincial cow industry’s development with this demonstration zone, convert local resource advantages into economic and market advantages, promote the development of the dairy product processing industry, arrange rural surplus labor, increase the income of farmers, pull the local economic growth.
Another is to employ high biotechnologies, such as semen sorting, sex control, to develop the artificial cow sex control technique, doubly improve the cow production efficiency, accelerate the popularization of fine cow breeds and improve the fine breed ratio, raise the technological level of stockbreeding, enhance the international competitive power of stockbreeding of the province, improve the economic, social benefits of stockbreeding, speed up the development of stockbreeding.
3 Thirdly, improve the milk output and the forage grass utilization ratio, provide new ideas for the planting restructuring.
3.Live pig industry
Boar individual performance measurement is an important mark of normalized development of the live pig industry. However, by now, there are 4 measuring stations nationwide only with a measuring capacity of less than 10,000 heads. The live pig industry is an important industry in Heilongjiang, but there is not a boar individual performance measuring station yet. To change the current situation of long-standing insufficiency of fine boars in the province, promote the breed selection progress of boars and establish and perfect the 3-level fine boar breeding system, it is very necessary to establish systematic and standard boar performance measuring stations.
The artificial fertilization technique is a high-grade, simple boar improvement technique. The popularization of the pig artificial fertilization technique is an effective approach to increased economic benefit from pig raising and sustained growth of the pig raising industry.
4.Soybean industry
Heilongjiang is a major producing area, production and export base of soybean in China, also an important supplying province of commodity soybean. The seeded area and output account for 1/3 of the nationwide total, the trading volume accounts for 80% of the nationwide total. At present, the key problems in Heilongjiang’s soybean production are low oil content, low output, high cost, low comparative benefit and weak market competitive power of soybean commodities. The causes of the above problems are the unsound production system of special soybean varieties; low mechanization level and operational standardization level; imperfect capital construction of farmland, weak resistance to disasters; slow hi-tech popularization; there are many enterprises developing further processed products but few leading enterprises with competitive power.
It is the strategic choice to expand the cultivation of high-oil, high-protein soybean varieties, demonstrate and popularize efficient production technique, develop high-purity active peptide facing the challenge of entry into WTO, which will greatly enhance the market competitive power of high-oil soybean of China, satisfy the demand for quality soybean in the industrial and international market; it is very significant for the development of Heilongjiang’s soybean industry to develop high-purity active peptide to produce agriculture with industry, convert the resource advantage further into the new product advantage, make rational use of soybean resources.
5.Potato industry
It is imperative to expand the production of potato seed and popularization of special varieties. This is because: 1) with the planting restructuring, the potato area is increasing, in an urgent need fro high-quality potato seed in sufficient quantity; 2) the formation of the agricultural industrialization and the development of the local industry require special varieties, starch processing enterprises are in urgent need for high-starch potato raw materials (with 2-5% higher starch content), which will apparently drive up enterprises’ benefits; 3) the
4 present potato market is highly competitive and potato seed market is disordered, calling for high quality, high-standard potato seed that is adapted to the market need; 4) after China’s entry into the WTO, foreign enterprises have aimed at the Chinese potato market and some potato seeds have swarmed in. Accordingly, we must accelerate our development and take an active part in international competitions.
6.Protected agriculture
Heilongjiang is now turning from a major resource province to an economic strong province. In order to promote the agricultural economy’s restructuring and greatly develop the protected agriculture, produce anti-season farm products, change the present situation of few choices of farm products in winter in Heilongjiang, it is necessary to introduce more varieties to satisfy the market demand for diversified consumption of farm products.
The execution of the project and the expansion of the space of agricultural production have not only provided quality seedlings to the regional, professional and large-scale production of distinctive farm products, but also provided mature techniques and modes of production for the agricultural restructuring of Heilongjiang.
The universities and scientific research institutes on which the project is backed boast a full range of disciplines, strong teaching and research forces, including a multidisciplinary vital teaching and research echelon consisting of senior professors, researchers, young doctors and masters to cover planting, deep soybean processing, breeding, dairy industry, agroengineering, management and finance. This team has always been active on the forefront of agricultural production of Heilongjiang, undertaken a number of state-level, province-level and ministry- level tasks and projects from the “6th 5-year Plan” through the “9th 5-year Plan”, and has won technological prizes for many times, provided with the research experience and capability for major technological projects.
5 Chapter 2. Introduction and Analysis of Established Projects
The SA Team classified the projects in Heilongjiang into 3 classes by stockbreeding, planting and protected agriculture, and has assessed and analyzed every project
Section 1 Stockbreeding Projects
A.Cow sex control project of Daqing City
1. Project introduction
The undertaker of this project is Daqing Tianfeng Bioengineering Co., Ltd., a limited liability company contributed by natural person, founded in Oct 2001 with a registered capital of 5 million yuan. Its business scope is R&D of applied technology of bioengineering.
The project is constructing a “quality cow sex control breeding base”, now with a 2300m2 sex control embryo production and R&D building and 5000m2 cowshed available for use. (1) A quality cow sex control breeding center will be built, with a building area of 2300m2. When the project is commissioned up to the standard, it will have an annual capacity of 10000 doses of sex controlled cow frozen semen carrying X-chromosome and 10000 sex controlled cow embryos, cultivate 3000 cows of high-productivity core population and an average annual milk output of above 8000kg. (2) A fine cow breed registration system and high-productivity breeding technique system will be established. (3) Within 4 years, 10000 sex controlled cow embryos will be transplanted in Heilongjiang to obtain 4500 quality cows, at an average unit output of 8000kg. (4) Accelerate the fine cow breed selection and quick breeding to generally complete the milk industry technical innovation system and industrialized mode of production in Heilongjiang.
2. Participation mode of farmers
The project will be run in the operational management mode of scientific research—investor —farmer, taking product, fund and technique as the tie to give rise to the complementation of advantages.
The company will give technical training to farmers on hybridization, quarantine, treatment and technical inquiry. As for cow breeding, all cows will be transplanted with the sex control embryo. By employing modern quarantine and integrated supporting technique, the overall death rate within the affected area will be controlled below 1%.
Manner of unification: the company will invest 7.5 million yuan to purchase 1500 cow calves. On a voluntary basis, such calves will be presented free of charge to farmers for raising. Both parties will enter into a contract. When the calves is 16-20 months old, the company will grant embryo transplantation for sex controlled cow free of charge. The calves born after embryo reception will be recovered by the company, 2 chances of ovum collection will be provided to the company in 4 years, when the company will pay farmers an ovum collection fee of 1500 yuan each time. Afterwards, the income from born calves will be owned by farmers.
6 Steps of execution: a farmer applies for calf adoption voluntarily and offers a guarantor; the company examines the raising conditions of farmers and the guarantor’s qualification, if the conditions are met, both parties will enter into the “Farmer Free Calf Adoption Contract”, the farmer will draw the calf within half a month after the contract comes into effect.
For the poor who want to become rich by raising cow but do not have the required conditions, the company will take the following support measures: (1) the company will provide funds or material aids to the poor directly to help them attain the required conditions, when the poor have income afterwards, the company’s funds (including the equivalent of materials) will be recovered in installments without interest. (2) The company acts as a guarantor for the farmer to borrow a sum from the bank to invest in raising facilities. (3) For extremely poor farmers, the company will grant financial aids without compensation to help the adopter become rich.
The sex controlled cow embryo produced by the company will be priced with reference to the interest of farmers. Each embryo will be sold to farmers at a price of about 300 yuan lower. Meanwhile, for any farmer purchasing the company’s product, the company will provide inquiry on cow raising and epidemic prevention knowledge obligatorily.
3. Survey of affected area
(1) General situation of affected area
Tiedong Village is situated in Longfeng District, Daqing City, including 3 natural villages (i.e., villager teams). There are 877 families and 2673 people here, 157 families have land, 7- 11mu/ person on average. The remaining families without land consist mostly of migrants. In 1984, when field was allocated to each family, township enterprises developed quite well, so some villagers served as employees. Now the enterprises have closed down and the employees have become farmers without land.
The key sources of income of the villagers include working outside, cow raising and planting vegetables. There are 60-70 poor families with annual income of about 1000 yuan, few people are rich, who live mainly on cow raising. Generally, a family’s annual income is 5000-6000 yuan. Since there is too little tilled land available, most villagers live on working outside.
There is a very long history of cow raising here since 1964. Several years ago, the milk price was very low and the delay in payment was serious. The cows were bartered away then. Now an adult cow costs 10000-12000 yuan and produces milk at 18 months, a milk-producing cow costs about 20,000 yuan.
(2) Farmers’ attitudes towards project
Farmers are very active for the project. 6 families at the village have entered into agreement with Fengtian for cow adoption. The criteria for selecting such farmers include the mastery of breeding techniques, preference for poor families and women. A typical cow produces 4t milk a year, a Fengtian cow can produce 8t. The purchase price is 0.78 yuan/catty.
The milk output of a high-productivity cow is equivalent to the total of 2-4 low-productivity cows. Provided the total milk output is certain, the replacement of low-productivity cows with high-productivity ones can reduce the number of cows raised, raising costs and labor input
7 and increase the income of milk raisers. The project will help resettle unemployed workers at surrounding areas and rural surplus labor. If farmers can learn how to raise a cow through the demonstration of this project, a farmer can increase his income by 3000-5000 yuan for every cow raised.
(3) Case analysis
Presently, farmers whether directly dealing with calf breeding, cattle raising, milk production or forage planting, are effectively connected to a perfect industrial chain in the project design of Tianfeng to exert their own advantages in economic base and human resources, driving the efficient operation of the chain.
Case 1: Sun Cuiying, female, 33 years, villager of Tiedong Village, in a 3-member family. Her family has 3 heads of cattle. According to her, her village has raised cattle since 1960s. Since the rise in the fresh milk price, the cattle raising reached a new peak. In June this year, she has entered into an agreement for free calf adoption with Tianfeng Company for a term of 4 years. According to the contract, Tianfeng Company shall purchase quality calves and provide her family with cow raising technical services obligatorily, when the calves raised can meet the conditions of embryo transplantation, a sex control embryo transplantation shall be conducted in time. Her family needs to provide 2 ovum collection opportunities to the company at an interval of less than 1 year and may not sell the adopted cattle to anyone else.
Case 2: Wang Jirui, male, 33 years, in a 3-member family, with 5mu land at home, which is just enough for grain ration. Their income relies on stockbreeding only, formerly raising pigs and now raising cattle. There is an adult cow, a calf (3 months) and 50 pigs at home, earning a net income of 7000-8000 yuan a year. The annual average expenditure is 3000-4000 yuan, for food and the child’s education respectively. The annual average net average is 4000 yuan or so. His family has raised cow since 2002, a cow eats 8 catty bean cake, 4 catty wheat bran, 12 catty corn flour and 6 catty fine fodder, of which bean cake 0.8/catty, wheat bran 0.4/catty, corn flour 0.5/catty and fine fodder 68 yuan40km. His cows produce milk 80-90 catty daily and 4t annually. A dairy would come to purchase fresh milk every day at 0.78 yuan/catty. He hopes to adopt several calves to enlarge the scale of stockbreeding.
Case 3: villager Zhang Songyan of Tiedong Village, Longfeng District, Daqing, 39 years, his wife 37 years and child 14 years, at grade 1 of junior high school. His family has no land, the husband cannot labor all the year round, the wife do some odd jobs, such as tree planting and building to make a living at the pay of 20 yuan/day. She wants to adopt a Tianfeng calf to earn more and has entered into contract.
4. Comments of SA Team
The SA Team thinks: firstly, this project is adapted to the major trend of the cow industry and has promoted the cow breed improvement, farmers have got their own cows at low inputs.
Secondly, this project has given special concern for poor people and women groups, designed specially preferential conditions for them in order to support disadvantaged groups. This has also provided a solution to the employment problem of local surplus labor.
8 Thirdly, since this project belongs to hi-tech, the direct technical risks it faces include whether the technique is mature and once a more advanced emerges, it might be impacted; the market risk also includes it is directly affected by the development of the cow industry. The effective avoidance method must be improving its own technique and reducing the production costs in adaptation to the challenge of technical innovation and market fluctuations.
Fourthly, in the “company + farmer” pattern of this project, farmers undertake a greater part of cow cultivation work, the cow growth determines the embryo quality directly, it is also a part of the company’s means of production, once farmers’ cows are poorly raised or dead, the company will suffer great losses, which will also be a great impact on farmers. It is proposed to clearly define responsibilities in the contract to ensure both parties’ interests; the company must conduct meticulous guidance to farmers, because the cow quality is the vital source of the enterprise.
B. Daqing Yinluo Dairy Industry Integrated Technological Demonstration
Project
1. Project introduction
The undertaker of this project is Daqing Yinluo Dairy Industry Group, founded in Aug 2000, being a large nongovernmental backbone business that integrates pasture land construction, cow breeding, beef cattle breeding, forage production and dairy products processing, with a total assets value of 680 million yuan, under which there are pasture company, agriculture company, breeding company and many other enterprises, with 300,000mu natural and sown pastures, 100,000mu tilled land and 10800 cows.
This project’s construction covers: (1) establish a cow embryo transplantation center with an annual capacity of 20,000 embryos: organize a core population of 1000 high-output cows (introducing 400 cows with annual capacity of over 10t); (2) set up a nationwide cow trading market and a network system, a cattle trading plaza, a cattle trading hall and a cattle trading network maintenance center. Establish the largest cow, beef cattle and yellow cattle trading market in Northeast China with a daily turnover of 1000 heads; (3) establish a forage supply system. Set up a 3,000mu fine alfalfa production base, a 30,000mu silage base and 150,000m3 silo bins; (4) cow epidemic prevention center and 12 integrated cow service stations. Set up an epidemic prevention center and 12 integrated cow service stations. (5) Training center. Set up a cow production techniques training center to train above 10,000 men-times a year. 2. Mode of cooperation with farmers (1) Embryo transplantation
Yinluo Company will found an embryo transplantation center. It shall set up a core population with 1000 high-output cows to produce embryo, the company shall contribute 30000 embryos for transplantation into 3000 heads of cattle of farmers. The company shall recover the costs
9 only, farmers’ embryo transplantation charges will be returned to the company from the cow payment. (2) Calf feeding
When a calf is raised to 6 months, it will be raised by farmers. When it grows up, the milk must be sold to Yinluo Company at a price 0.05 yuan/catty higher than the market price. This applies mainly to farmers who are short of fund but can raise cattle. Technical guidance and training will be given to farmers to make them rich by raising cattle, the enterprise will make a profit through milk processing. (3) Silage plantation
Sign a silage corn and pasture planting contract in the form of order agriculture. (4) Form of training
In order that cattle raisers can raise cows well, the company has set up a training center for technical training to farmers and may arrange them to practice at its own cattle ranch. It has also set up a disease control center and 12 integrated cow service stations for cow healthcare. 3. Survey of affected area (1) General situation of affected area
The project location is Team 4 of the Daqing Development Zone Farm. Before 2001, it cost 1050 yuan to rent 1ha land, now it costs above 300 yuan; cows are run by 1050 families and 3700 people, there is 750ha tilled land. There are 4 natural teams, with totally 500 employees, the others are migrants moving here successively after the Reform and Opening. 300 families of the whole team raise cows. After Yinluo was settled there, 400 people worked at Yinluo, earning about 500 yuan a month, which is sufficient for the basic livelihood. (2) Case interview
Case 1: Zhang Xingqi, male, began to plant silage since 2002 and has entered into contract with Yinluo to plant 10ha land, the company purchases silage at the price of 150 yuan/t. The company offers seed and fertilizer, and reaper for full-mechanized gratuitous reaping. The net average income may attain 3000 yuan/ha. At that time, a friend of his was working at Yinluo and told him this message, he thereupon began to rent land for planting. Now many people want to deal with planting but no more land is available for renting.
Case 2: Li Wenxiang, female, ready to adopt calf. She has raised cows for 4 years, formerly ordinary cattle. In June 2003, she entered into contract with Yinluo, ready to adopt high-yield cattle. When raising female calves to 6 months resulting from embryo transplantation, Yinluo Company have them fostered at farmers’ family at the price of 6000 yuan (market price 7000 yuan). The calves may not be sold. When the cows have bred and born calves, the money will be repaid by selling milk to Yinluo Company at a price 0.05 yuan/catty higher than the market price. Meanwhile, the company shall provide technical guidance and training. Li thinks that the benefits of this practice include: when the cattle fall sick, they may contact the company’s technician by telephone and no cash is needed for the medical treatment for cattle.
10 Through the investigation on the affected area, we can see that a mature professional group of cattle raisers has formed there over historical evolution. Relative to other farmers with tilled land, they have the technical expertise on cattle raising but might be short of fund. The design of the alliance between the company and farmers has fully considered this difficulty and has taken on the mode of cattle compensation with milk. For farmers with planting experiences, their expertise can be exerted to develop forage grass; for less experienced farmers who want to raise cattle, a chance is provided to them for learning and practice.
4. Comments of SA Team
Firstly, from the perspective of fund and technical expertise, this project has paid attention to the stratified cooperation with farmers of different production capabilities for a wide range of participation.
Secondly, the cow raising industry is closely related to the planting industry, forage grass industry, forage processing industry and dairy products processing. The company’s role in the whole industrial chain is to unite all production links organically. A coordinated composition of the industrial chain may abate the impact from market fluctuations through the interaction and complementation of different links in risk resistance.
Thirdly, the key to handing calves to farmers for raising is whether they can well raise calves. It would take time for farmers to receive hi-tech, their mastery of techniques is undoubtedly proportional to the patience and effort paid by the enterprise, although farmer training cannot bring any direct benefit to the enterprise, however, from the long-run development of the cow industry chain, farmers’ enthusiasm is the source to keep the whole chain vigorous.
Fourthly, to avoid risks due to changes and guarantee both parties’ interests, it is suggested to cover insurance upon execution of the contract.
Fifthly, the government’s new policies on cattle raisers: guarantee the land use for forage and silage, grant loan for purchase of forage machinery and milking equipment, which has greatly promoted the participation of farmers.
C. Cow Technological Demonstration Project of Fuyu County
1. Project introduction
The undertaker of this project is Heilongjiang Guangming Songhe Dairy Products Limited, an enterprise held by Shanghai Guangming Dairy Industry Inc. This company now holds total assets of 350 million yuan and made a net profit of 8.1 million yuan in 2002. This company has independent import-export operations right. The technical support units are Heilongjiang Livestock Research Institute and Heilongjiang Veterinary Scientific Research Institute.
Coverage and scale of demonstration:
Set up a perfect county-level livestock veterinary technical service center; 2 township-level livestock veterinary integrated service stations; 8 village-level livestock veterinary integrated
11 service offices; gradually perfect the livestock veterinary technical service system at county, township and village levels, providing the technical guarantee of advanced science to all cow raisers in the affected area and the county.
2. Mode of cooperation with farmers
This project will guide farmers in regard of fine variety cultivation, disease control; planting of fine pasture, popularization of silage technique; perfection of informatization service system and production management system, setup of cow breeding and production files. Through the demonstration and popularization of advanced practical cow development techniques, it aims to gradually improve the technological sense of cow raiser; by setting up a socialized service system and epidemic disease monitoring system, it aims to improve the raw milk quality; the intensive cow breeding will save resources and costs, and promote the sustainable growth of ecological cows.
3. Survey of affected area
(1) Basic information
The affected area is located at Dengke Village under Dawoer, Manchu, Khalkhas Township in Fuyu County, with 334 families and 1134 people, divided into 3 hamlets. There is a minority population of 796 people, accounting for 74%, including 763 Dawoer people, 5 Ewenk people, 10 Khalkhas people, 5 Manchu people and 13 Mongolians.
This village has been preliminarily turned into a standard small zone with a standard cowshed area of 2400m2, a typical raiser raises 20 cows. Now villages with certain savings have built a 2400m2 standard courtyard with the cowshed integrated with the house.
For technical service on stockbreeding, a natural village is provided with an integrated service station, where the stockbreeding service personnel are generally trained from stockbreeding schools, having high technical and medical competencies. They serve in the form of part-time or individual under the control of the township or village.
The business and investment introduction work led by the county government commenced in 2002. The county’s preferential policy to set up a 500t silo pit and cowshed for every family with external funds, to which the finance will contribute a revolving fund of 100,000 yuan. Our village offers the land for cowshed construction and 2mu forage land gratuitously, also exempt cattle raisers from the grassland management fee for 6 years (20 yuan/year per head of cattle). They sell milk to Guangming Dairy Industry. Since the villagers have never gone out of the village, the introduction of large-scale standard major cow raisers is convenient for villagers’ study of advanced experience and can promote the local stockbreeding development. Farmers and the village will benefit in the long run despite of their temporary resources loss.
Since June 2002, external cow raisers began to settle here, all with their own technicians.
(2) Villagers’ intent
The villagers think that the advantages of developing stockbreeding science parks include: 1) being close to the Nenjiang River, with large-area pastures and abundant water resources; 2)
12 the county Party committee, county stockbreeding bureau and development office have made great investments in infrastructure, now there are 156 silage pits and 45 silage trenches at the village; and 3) there is a county demonstration zone and 3 business introduction projects at the village, with modern cultivation techniques and management experiences.
(3) Case interview
Case 1: Tao Guiying, female, Mongolian, living at a 5-member poor family in Dengke Village, with 3 children. She began to develop cattle raising this year. Since the family is poor, with the guarantee of the villager committee, she borrowed 12000 yuan from the credit cooperative and bought a cow. The loan will be repaid by deducting 40% from the monthly milk profit until the loan is paid off. She recognizes this practice, saying that it is impossible for her poor family to buy any cattle. Buying cattle on loan will at least relieve her family from paying any cash now. Through breeding, there are 3 cows at home, producing about 45 milk a year, sold at 1500 yuan/ton. Except raising cows, her family has also planted 20mu corn to provide cows with forage.
She thinks the greatest risk of cattle raising is heavy investment. Now the villager committee has helped her solved the problem in buying cattle, so her greatest worry that the cattle die of disease. If this comes true, she would suffer from a total loss. Her greatest expectation is to improve the milk output. She says the local cow technical service and medical service is very complete. There is an integrated cow service station, a breeding station, 3 veterinaries and 3 breeding worker at the village. The cow medical expense is not high, only the medicine cost is charged.
Case 2: He Lianzuo, Dawoer nationality, 28 years, living at a 5-member family. His house is 4 miles from the villager committee, with 9 cows (4 ones producing milk now). His household annual income is about 10,000 yuan, mainly used to build house. He prepares to build a yard in mid Jul 2003 and has purchased 60,000 pieces of brick.
In the family, whoever has leisure time would take care of the cows. There is 3ha land, used to plant corn and silage. At ordinary times, 1mu land can yield 4t silage.
4. Comments of SA Team
The SA Team has learnt the effort of the local government to increase farmers’ income by developing the cow industry, such as cattle purchase on loan and forage subsidy. However, farmers remain weak in technique, information and affordability of risks, which surely calls for effective channels of technical popularization. For the introduction of major raisers, the villages felt that these newcomers occupied their local resources at the beginning. However, these major raisers have brought tangible mature techniques and optimum management, and have helped people built up the confidence for cow raising. It can be said that this pattern of driving farmers with major raisers is actually a variant of the company + farmer pattern in adaptation to the local conditions, major raisers are actually directly introduced private tutors for cattle raising, whom people are learning from and competing with.
13 D. Antibody-free milk project of Hulan County
1. Project introduction
The project undertaker is Heilongjiang Rutai Bioengineering Limited, founded in 2000, with a registered capital of: 12 million yuan. The project coverage is: to set up 4 modern milking workshops with 500 cows available for milking, a technical training center for antibody-free milk and an antibody-free milk test center.
2. Mode of cooperation with farmers
The company helps contact cow purchasers and provides technical services. The company and farmers have entered into a supply and marketing contract, farmers shall raise cows as required by the company and deliver quality fresh milk to the company, the company shall purchase milk at a price higher than the market price.
3. Survey of affected area
(1) General situation of affected village
Qingnian Village is located northwest of Leye Town on the west bank of the Hulan River, 4km from the Ha-Hei Highway and connected with it with a sandy rural road. Most villagers are farmers of Shandong origin. There are 440 families, 1983 people, 14000mu arable land, a woodland area of 3000mu and a grassland area of 150mu. The land is mostly low-lying saline alkaline soil unsuitable for cash crops.
In recent years, the village has been developed on cow raising. There are 1780 heads of cattle, including 1223 breeding cows, 168 heads of Qingnian cattle, 210 heads of bred cattle and 179 calves. There are 216 heads of cattle suffering from obstetrical disease and 243 heads of cattle suffering from mastosis. Among the 636 women, 301 people are raising cattle, on average a woman raises 5 heads of cattle. The total current value of cows is 22.415 million yuan, the milk income in 2001 was 5.13 million yuan, that in 2002 was 6.22 million yuan, that in 2003 is estimated to be 9.6 million yuan.
In 2001, a mechanized milking station was set up with 500 cows available for milking with external investment; in 2002, a milking station of the same scale was built with self-financed fund. The villagers think that with the cow industry’s development, some cows should still be subject to artificial milking whose labor intensity is great. They expect to obtain systematic services by setting up a station under the project to abate the labor intensity.
(2) Case interview:
Case: Luo Qiaoyun, living at a 4-member family. The household income relies mainly on cow raising. There has been a cow raising history of 10 years. In the past, artificial milking was used, which was laborsome. There are now 4-5 cows now, yielding milk worth above 20,000 yuan a year.
She participated in the project since last spring, featuring high profitability, high technique, high milk quality and high milk output (3.5-3.6% fat content). There are 3 milk stations at the
14 village.
Labor intensity of artificial milking: 1) drinking water for cows, 6 buckets/cow a day, to be heated by firewood; 2) collecting excrement 3 times a day; 3) feeding cows and processing grass; 4) milking, 4 times a day, the most tiring labor.
Labor intensity sequencing from high to low: milking, heating water for cow drinking, cow feeding, excrement collection. These are mainly done by women.
Labor intensity sequencing provided with a milking station: milking, heating water, feeding water to cattle. These activities are repeated 3 times a day. In addition, she has to take care of the land at home. The milking station has undertaken the most tiring job—milking—in cattle raising. However, heating water to feed cattle will still take a long time with a high intensity. Rutai can relieve the labor intensity of cattle raisers, especially women by providing forage in place of farmers’ fodder cutting and heating water with solar energy. Each family needs to invest about 350 yuan, the company shall provide a subsidy of 50 yuan for breeding. There is a special veterinary service center for gratuitous service. Luo has just built a cowshed last year to accommodate 40-50 cows.
Now it would take money to see a village veterinary, once a head of cattle falls sick, it would cost 2000-3000 yuan, farmers are very worried about this.
(3) Basic analysis
Through the interview with farmers, especially through the contrast of labor intensity before and after the introduction of the antibody-free milk project, the driving effect of industrialized production on cattle raisers is visible. Meanwhile, the quality requirements of antibody-free milk have guaranteed the standard management in production links. The risk of cow disease is the greatest threat to farmers, for which there must be a technical guarantee.
4. Comments of SA Team
Firstly, the company has developed high-end products in the cow industry chain and realized the added value of primary products using local resources and its own technological strength. It is the leading force to drive the overall upgrading of the industrial chain.
Secondly, restricted by the traditional operating pattern, it will take time for farmers to accept new techniques and new modes. The company has to engage itself in lasting technical support to farmers and apply a stricter management standard that clearly defines responsibilities in production links.
Thirdly, hi-tech products, with a high added value, can easily avoid risks from fluctuations in the raw materials market. In case of a milk price fall, the company is expected to consider the interests of milk producers and apply a protective purchasing price. On the other hand, it shall actively develop the market, improve the manufacturing technology and open a new path of development for the dairy industry.
15 E. Harbin Sanyuan boar propagation and performance measurement project
1. Project introduction
The undertaker of this project is Harbin Sanyuan Animal Products Industrial Limited, founded in 1955, being a large state-level boar breeding base that integrates planting, raising and processing, gathering above 20 professionals in stockbreeding, epidemic control and forage nutrition, and a technical management team consisting of experienced stockbreeding experts and animal science doctors. The project covers: boar performance measurement station, boar measuring shed, pork quality test room and supporting equipment, etc.
2. Mode of cooperation with farmers
300,000 shares of fine boar semen can be popularized to farmers annually and 120,000 sows improved. The company has held above 100 training courses in the organizational form of the pig raising federation +technical service agency +pig raising farmers, covering some nearby provinces.
Federation mechanism: 12 base-demonstration families, covering 4000 families, purchasing piglet at the protective price, standardizing the pigsty, forage, waste treatment and epidemic prevention.
3. Survey of affected area
(1) Affected farmers’ perception of project
The World Bank project not benefits typical families only, it can radiate the whole province and improve the level in forage, live pig recovery, disease control and vaccine supply. The artificial breeding technique should be greatly meetings. The small base of pig raising shall drive the live pig recovery, breeding, forage supply and disease prevention of 10,000 families. The company shall provide fund support to set up grassroots artificial breeding stations.
Risk: 1) as for disease, if there is no regular disinfecting facility (twice a month) is available for effective vaccine epidemic prevention (specified vaccine), the pig raising can hardly make any effect; 2) as for variety, only high quality commodities can occupy the market; 3) as for technical training, basic professional skills shall be learnt; 4) as for market, there should be a recovery mechanism, because the market can hardly be controlled.
(2) Case interview
Case 1: Zhang Fuzhi, 59 years, at Dongqiao Village in Tangyuan Town, Tangyuan County. He began to raise boar in 1973 and has used many boar breeds, but the competition is fierce. In 1994, with a friend’s introduction, I introduced boars from Sanyuan for diversified hybrid. A boar can be used for one year only. To avoid inbreeding, a new breed in introduced every one year. Now there are 8 boars at home. A pig of 500-600 catty is sold at1200-1300 yuan, sometimes 1500 yuan. His boars cover 500-600 sows, the breeding charge is 50 yuan/head.
The effect of artificial fertilization is better than natural mating. Now I would bring the semen back from the company at a time, which can be kept for 14 days. My family raises 8 cows and
16 earns a lot. The gross income (excluding forage cost) on the boars and sows is 30,000-40,000 yuan. Pig raising families have 3 requirements, one is artificial fertilization is very good in its high productivity and health, but it is too effort consuming. By now, I have come to Sanyuan 3 times, having spending a lot of money and time on the way. I hope that the breeding station for artificial fertilization can be moved near us, so that we can get high-grade Sanyuan boars. The other is, farmers have undergone several fluctuation these years in pig raising, farmers have enough grain at hand but the pig raising benefit is poor. We expected there is a place to teach us scientific management skills and offer us genuine forage and drugs. The other is that the price hog is too low, ranging from 1.2 yuan/catty to 2.8 yuan. They have the urgent need for a unit that can organize this and provide good services. A leading enterprise should be responsible for the boar forage price and recovery, the expected profit on a hog is 80-90 yuan.
In my personal opinion, Sanyuan can undertake the project and is really doing something for farmers. Last time, I met with a customer from Zhaodong wanting to buy 500 pigs, Manager Lee said that its experience is not sufficient and persuaded it to raise 200 heads temporarily, the number will be increased gradually in the future with its experience.
4. Comments of SA Team
A feature of the interview of this project is that the interviewees come from greatly varying places. As demonstration families (major families) of the company, they have already brought the company’s service to a long distance. As members of the pig raising federation, they have gradually participated in the work of driving the local pig raising industry.
The company has conformed to the major market trend and set its hand from the most urgent issues of farmers. With its solid technical strength, it has provided find breed products at low prices. Meanwhile, the company has not fixed its eyesight on the profit only but has based itself on the industry’s development to gradually build up an independent, efficient and open industrial federation. It has actually linked its own interests with farmers’ proceeds and the industry’s development. For the company, there have been virtually many more helpers; for farmers, they can participate in the construction of this flourishing industry in an interactive manner.
In interview, farmers have raised many suggestions on the company’s business development. It can be seen that these are deliberate, urgent and practical problems. The integration of the industrial chain is believed to be pushed along in a planned way by the company.
F. Cow technological popularization & integrated demonstration project of
Shuangcheng City
1. Project introduction
One of this project’s undertakers is Shuangcheng Chenxi Dairy Industry Limited, founded in Mar 1999, with fixed assets of 5.08 million yuan, annual sales of 17.7 million yuan. Another undertaker is Shuangcheng Rongyao Forage Biotechnology Development Limited, founded in
17 Oct 1997, being a modern hi-tech enterprise integrating forage production and marketing. The company has a registered capital of 5 million yuan, the trademark “Rongyao” has been rated as a “famous brand of Harbin” and a “famous brand of Heilongjiang”. In 2002, the company was appraised as one of the “Top 100 forage enterprises of China” by the Forage Industrial Association of China as the sole forage enterprise in Heilongjiang. The project covers: train 150,000 men-times a year, including 1500 men-times of professionals, 148,500 men-times of cattle raisers; conduct artificial fertilization on 25,000 heads-times; conduct disease control on 40,000 heads-times; annually produce 60,000t silage; and set up an integrated cow production technical service and information management system.
2. Mode of cooperation with farmers
Dairy Industry Company has engaged experts to conduct gratuitous training to cattle raising farmers and technical service personnel; the disease control hospital and the breeding station offer compensated services, the forage company has signed a forage planting and purchase agreement with silage planting farmers and harvest silage corn for them free of charge. In the meanwhile, it enters into a feed supply contract with cattle raisers in the technical carrier of silage and fine fodder supplemented feed. Through after-sales service, it directly teaches the fully mixed daily grain feeding technique and standard cow raising procedure to cattle raisers.
3. Survey of affected area
(1) General situation of affected area
Jiuyuan Manchu Village, an affected village, is the seat of the township government, where there are 560 farmer families and 2700 people. Manchu people account for 90%, Han people 10%. There are many poor people, accounting for 40%. The annual per capita income is 700 yuan, those not dealing with stockbreeding can earn 150 yuan on 1mu land a year only. The key source of income is corn planting. Medium-income families account for 40%, there are 30 chicken raising families and 15 pig raising families (above 4-5 heads), 140-150families dealing with transport; 200 people are working outside, accounting for 6-7%. Rich families are mostly doing business, accounting for 2%, 200 families are raising pigs (846 heads).
Yuren Village under Tuanjie Township is 17km from Shuangcheng City, with 7746mu land, 1182 people, 253 families, per capita land 6.3mu. Living mainly on cow raising, the village has 2009 heads of adult cattle (1.7 heads per capita), 836 heads of quasi-adult cattle, cattle raisers account for 84% of the population. There are 11 service families that thresh feed and cut fodder for cattle raisers. Cattle raising began in 1984, where 12 families were dealing with this. 1996 witnessed the peak of cattle raising, where there were 194 heads of cattle. During 1996-1998, cattle brokers emerged (some villagers purchase cattle for farmers and sell cattle to farmers on credit partially or in full). The richest family at the village is a cattle raiser, which raises above 40 heads of cattle. This family has a cattle raising experience of 3-4 years only but it has the capital and manpower for raising. There are only 5-6 poor families at the village, mainly because they have no money or are unable to borrow money. The village, with per capita income of 5100 yuan, is a rich village in Shuangcheng. The annual milk output of a cow is less than 4t, the income is 6400 yuan, the cost is at least 3400 yuan and the net profit 3000 yuan. Mostly manual milking is used, only 4 families use mechanical milking.
18 1. Sequencing of priorities in cattle raising:
Raising Technique Breed Cowshed Feed cattle or improvement improvement expand scale Yan Shanqing 1 4 5 3 2 Dong Shiju 1 5 3 4 2 Fu Changbo 1 4 5 3 2 Fu Junheng 1 3 4 5 2 Ma Mingyan 1 4 2 5 3 Li Ligeng 4 1 5 3 2 It can be seen from the above sequencing that, for the whole village, the most desired things are: to become rich by raising cattle with low-interest loan and favorable policies; to expand the scale of fine-variety forage; good techniques; good cowshed; refined varieties.
(2) Case interview
Case 1: Li Ligeng, female, 50 years. He raises 6 heads of cattle, 1 head of cattle brings 4000 yuan income on average. A head of cattle is fed 7-8 catty dry straw and corn, 7-8 catty mixed feed and 1 catty wheat bran. He has raised cattle for 11 years.
He has heard of the silage project and knows Rongyao Company is responsible for purchase. He thought this was easy to get started because the seed is provided by the company. If there is loan from the State, he wants to raise more cattle.
Case 2: cow raiser Ma Mingyan, 40 years. He began to raise cattle in 1992, when he thought the economic benefit of cattle raising is good. The first head of cattle was bought with a loan of 2900 yuan. By 2002, he raised 9 heads, with average net income of 20,000 yuan, less than 3000 yuan per head. He wants to raise better breeds, because the current milk output rate is too low. The milk is purchased by Nestle at the 2 milk stations in the township. The purchase price depends on the grade, 0.8 yuan for Grade I, 0.75 yuan for Grade II, 0.65 yuan for Grade III, most milk is of Grade I.
There is a veterinary station at the village, operated by an individual. The former epidemic prevention station has been contracted. The annual medical expense per head of cattle is 300 yuan. Farmers may be exempted from taxes if silage is provided by the township government. There are many taxes now, but there is no tax on cattle raising.
4. Comments of SA Team
Firstly, the project has setup a chain of forage planting family +forage company +cattle raiser +dairy enterprise. The two companies are responsible for the infrastructure construction and management, the popularization of technology and provision of relevant services to farmers. This industrial chain may help solve the problem of shortage of dominant motive power and effective management in technical popularization.
Secondly, the construction of a perfect industrial chain helps abate the impact resulting from market fluctuations, realize efficient division of labor in the whole industrial chain, and make planned production that can predict market trends and effectively avoid risks. It is suggested
19 that the company and farmers involved in the industrial chain should not only consolidate the cooperative relationship in production, but also recognize the interest community as a whole conceptually, acutely master the dairy industry market, jointly make an adjustment plan that is the most advantageous to the adaptability of the industrial chain.
Thirdly, to drive farmers to learn and apply advanced technology forwardly, the company may set up an encourage bonus to promote the benefit optimization and strength consolidation of the whole industrial chain at a low cost.
G. Cow project of Zhaodong Project
1. Project introduction
This project is a new project, the executive unit of which is Songzhan Xinxing Stockbreeding Limited in Zhaodong, a state Class II enterprise. The brand Oasis has been appraised as one of the national Top 10 brands of dairy products and awarded a green food mark. The company has registered capital of 80 million yuan and total assets of 322.83 million yuan. This project will build a standard cowshed that can accommodate 200 high-output cows, a milking hall to realize the centralized milking of 2500 cows in the affected area, build a forage distribution center, including 4500m3 silo pit, 3200m2 fodder warehouse (storing quality hay and protein supplemented feed), a DHI test center to test milk output, quality and somatic cell count, etc, and an integrated cow feeding technical service center. The 20,000mu pasture production base can provide farmers with high quality leguminous and gramineous pasture. It will also purchase computer network system equipment that uses the cow production information and management system software to record production and guide farmers’ cow production. 2. Mode of cooperation with farmers
The Zhaodong Rural Cow Association will be founded, in which a cow will be a member unit. Cow raisers may apply for affiliation to the association on a voluntary basis. The pattern of cooperative business operation will be adopted to organize farmers’ cow production. Unified operation, accounting and profit sharing will be practiced according to the cow association’s articles of association. After joining in the association, a raiser may enjoy the “5 guarantees, one support and one insurance” preferential policy: “5 guarantees” refer to the guarantee to free training of cow raising and management skills, provision of technical data; the guarantee to provision of high quality forage, forage grass and fine cow breeds; the guarantee to disease prevention and treatment; the guarantee to breeding; and the guarantee to exclusive milk sales on the basis of the protective price. “One support” means if a specialized cattle raiser raises at least 5 cows, a low-interest loan of 1000 yuan will be provided to each cow. “One insurance” means: the association shall underwrite insurance for cows of all members with the insurance company. Through the cow association, cow raisers can obtain the quality service offered by the financial credit and technical service center. Through the organizational form of one local federation under a general federation of the rural cooperative, scattered cows in rural areas are gathered to the milking hall for milking, ensuring the quality of the milk processing. The company shall set up a board of supervisors,
20 which is responsible for settling any conflict of interest between the company and farmers, with a preferred solution of maintaining farmers’ interests. The association shall strengthen the interest relationship between the company and farmers by selling forage, purchasing milk, providing pre-production, mid-production and after-production services to cow raisers, making a profit by collecting service charges and promoting the technological exchanges among cow producers. 3. Survey of affected area 1) General situation of affected area
Ruiguang Village: 736 families, 3160 people, 14100mu land area, 13500mu grassland area, 3500mu range, 8 natural villages, 90% families are raising cattle, above 3 heads per family. 62 families are not raising cattle, mainly because of technical or financial difficulties. There are 21 poor families with little land. Few people are working outside. Except cattle raising, this village also grows 8000mu corn, 700mu soybean and 3000mu silage.
Songzhan Village: 7500mu pasture land, 1350 laborers, 1350 cows, 380 cattle raising families, accounting for 60%, other families grow vegetables, doing small business, deal with transport or faming. Cow raisers are the richest, the richest one raises above 110 cows. There is a cow association at the village, founded in 1994, headed by the village head, aiming to solve the forage problem coordinate the delivery of fresh milk. The association deals with the company, publicizes experiences for becoming rich and has affiliated 40 families. The main role of the villager committee in the project is to publicize the project.
2) Farmers’ perception of project:
27 families of this village have the intent to enter into contract with Xinxing Company, they become a shareholder with cattle and might enter the factory for work. This project is oriented to poor families. Xinxing Company has agreed with Yili Company that a loan of 5000 yuan shall be extended to each head of cattle, cowshed will be provided gratuitously, the breeding charge will halved. The milking station and technical training will be free of charge, and the purchase shall be made at the protective price of 1.4 yuan. Families with less land, sick person or per capita income of less than 1000 yuan will be given priority to.
This village has many people for land. There is a workshop of Yili at Songzhan under joint management with Oasis. The project’s execution can settle the rural surplus labor and help farmers become rich. A farmer can earn at least 4000 yuan from this project on average. If a calf is born, the income would be above 10000 yuan.
3) Case interview:
Case 1: Yu Cuiping has bought 2 heads of cattle this year, which have not made a profit yet, each costing 13,000 yuan.
Women deal with farming, breeding and housework at home. Cattle raising is costly. Xinxing Company has provided a loan (1/3 of the cattle price), techniques and market outlet.
Women can raise cattle and men can work outside and till land. The company offers special training to teach breeding, raising and disease control skills. If there is any question, they can
21 contact the village cow association at any time. The integrated stockbreeding station is subject to follow-up service by the company. Yu’s family was affiliated to the cow association earlier this year, which has helped the family solved some technical problems. The cow association holds meetings irregularly for 2-3 times a year.
Cattle raising activities undertaken by women: cattle feeding: once every 8 hours, excrement removal, water drinking, herding, cowshed cleaning, buying forage or planting fodder (fine forage is needed when a cow lactates, including bean, corn flour, wheat bran, microelement, etc) and milking. Yu thinks the job of cattle raising can be easily done by women.
4. Comments of SA Team
The operating pattern “company +base +association +farmers”, especially the “5 guarantees, support and insurance” advocated by the cattle raising association have solved difficulties of cattle raisers in forage, disease prevent, breeding, technical support and source of information. The support measures for minor families, poor people and the avoidance measures of cattle raising risks in the form of insurance are very practical.
Firstly, the construction of the cattle raising zone has effectively improved the local raising environment, machinery milking has guaranteed the milk quality and the zone’s operation is directly connected to the service quality it offers. It can be said that the idea of cow industry improvement in Zhaodong begins with the establishment and perfection of the service system, which has been turned into a profitable operating entity that connects the dairy products enterprise and cattle raisers, ensuring the quality control over the production links.
Secondly, the base and association act as the intermediate links to connect the dairy products enterprise and cattle raisers. It is suggested to further their role in coordinating and ensuring the interests of both parties.
Section 2 Planting Projects
A. Soybean project of Bin County
1. Project introduction
This project is a new project, the executive unit is Longfeng Seed Industry Company in Bin County. The predecessor of this company was Bin County Seed Company, with a history of 35 years, which was reorganized in Jan 2003 into a joint-stock company. The company has good credit in seed production, product inspection and technical service. The project prepares to construct a 20,000mu cultivation base high oil, high protein fine breed soybean to annually yield 330,000kg original seed and 3,160,000kg fine variety seed. The project has been started in June 2002 and has made a preliminary progress with the technical support of the Northeast Agriculture University and the Harbin Hefeng Agricultural Hi-tech Development Limited.
2. Mode of cooperation with farmers
22 This project is run in the pattern of “scientific research unit +company +farmer association” and pursues the mode of operation of order agriculture to realize the operating mechanism of driving the base with the seed industry company. This project involves 1100 farmer families, including 100 farmer families in the original seed cultivation base and 1000 farmer families in the fine variety cultivation base. Families under technological demonstration in the base are responsible for soybean land preparation, field management and harvest, and shall receive the technical training. The agriculture machinery, electromechanical wells and farmland capital construction are managed by the farmer association and commonly used by families under technological demonstration, these families shall profit from the cultivation of original fine breed. When the project is completed, it can drive 40000 families outside the affected area to deal with the production of high oil, high protein soybean.
3. Survey of affected area
1) General situation of affected village
Fuhe Village under Juren Town is located at north of the town, with a total area of 18,200m2, 6 natural villages, 789 families, 3084 people, 10557mu tilled land (3.4mu per capita, 85% is dry land). In recent years, there has been serious soil loss, deteriorating the environment. The single structure grain output has restricted the development of the rural economy. In 2002, the total grain output was 4.29 million catty, per capita output 695kg, per capita net income 1216 yuan. There are 200 poor families and 704 poor people, accounting for 25% and 23% of the total number of families and the total population respectively.
Comparison of cattle raising, working outside and soybean planting industries by farmers: cattle raising: time consuming, risky, high investment, high technical requirements, unsuitable for each family. However, farmers thinks that the stockbreeding project is the most profitable. Working outside: it’s uneasy to find a job and earn much money (50 yuan/day for skilled jobs, 20 yuan/day for labor jobs). There will be insufficient manpower at home in busy seasons, but there is nothing to do at home in slack seasons. Soybean planting: the labor time is less than 2 months, market outlet is guaranteed, farmland infrastructure can be improved, farmers do not have to input cash, so soybean planting has the highest integrated cost-effectiveness.
2) Farmers’ perception of project
Most villagers knew the project in June last year and that the pattern of company plus farmer would be employed. 300 farmers from 5 natural villages will be organized to participate in the project, mostly from poor families. Poor villagers are very concerned about the project’s progress.
Farmers’ benefits from the project: the per mu yield has risen from 150kg to 185kg, with an income increase of 50-70 yuan per mu. The seed company will purchase soybean at a price 10%-20% higher than the market price, the total increase of income will be about 120-150 yuan. The company may supply seed, prepare land, mix seed, fertilize in a unified manner.
Farmers are very active for the project. Since there is the standard practice of crop rotation in soybean production, farmers not in the round are waiting patiently for their own plots to be brought into the planning. The key reason for the low profit of farm products is the absence of
23 a steady market outlet. In the production process, since farmers have a limited mastery of the information and techniques, and their risk resistance is poor, the company will then provide a guarantee on these links, so that farmers can earn money with a peace in mind.
3) Case analysis
In the following case, we can see that the key reasons for poverty is little labor, heavy family burden, lack of the fund to change the structure of operation and poor resistance to risks. The preferential policy granted by the company to poor people gave him an opportunity to change the present situation.
Wu Guozhong, 49 years, with 27mu land, 16mu growing high oil soybean and the remaining growing corn. His family has 6 people, his wife is sick, costing over 2000 yuan a year. He has 2 children, with one studying at junior high school, costing 2000 yuan a year. In 2000, he borrowed 5500 yuan from a rich family, the interest was as high as 170 yuan/1000 yuan. Rich families have members working outside with annual income of about 5000 yuan. Now only a small number of people is working outside. Reasons for his poverty: less labor, his wife being sick, inability to work outside. He is satisfied with the project, especially because the project can well construct infrastructure. Main risks are undertaken by the company. As long as there is no major natural disasters, farmers’ income can at least guarantee their minimum needs.
4. Comments of SA Team
The soybean fine variety cultivation project has made use of the local agricultural advantages, grasped the decisive occasion of soybean market proliferation, enhanced the momentum for the soybean industry to develop in a specialized, large-scale and intensive way. In the design of the cooperative mode with farmers, it is suggested to first consider practical difficulties of poor families and women in development and take corresponding measures for support. In the meantime, make sure demonstration families, the farmer association can be combined with farmers organically. The “6 centralizations and 1 decentralization” production management style explored under the project in cooperation with farmers, may help integrate manpower, financial, material and technological resources, grasp the best junction in time and space of profit increment. It is a beneficial trial to tailor measures to the local conditions, develop and improve the degree of agricultural industrialization in a benign way. The market risks borne on the enterprise can be avoided by perfecting the soybean industrial chain of fine variety cultivation-production-marketing-processing and developing the connection with industries related to stockbreeding.
B. Soybean active peptide fine processing project
1. Project introduction
This project is an expansion project, the construction unit is Heilongjiang Leneng Biological Inc, founded in Oct 2002, with a registered capital of 79.4 million yuan, being the largest soybean active peptide production plant in Asia.
24 The existing scale of production is the annual capacity of 2000t soybean active peptide. The technical support unit is the Heilongjiang Light Industry Scientific Research Institute. When this project has been put into production, it can produce 1000t refined active peptide flour per annum; the purchase contract for Dongnong 42# soybean has been entered into with farmers at an annual demand of 20000t. This company shall provide original seed and the technical support in planting. A stable product and raw materials supply system will be established.
2. Mode of cooperation with farmers
Heilongjiang Leneng Biological Inc has formed a close cooperative relationship with farmers by founding a quality soybean planting base and a soybean deep processing enterprise under shared risks and interests. The company has signed a soybean planting contract with farmers. The company shall provide high quality Dongnong 42# soybean seed, after autumn, it shall purchase all soybean meeting the quality requirement at a price 0.1 yuan/catty higher than the prevailing market price. This company shall also provide technical training on planting, to make sure that farmers can grow high quality soybean. By establishing a good cooperative relationship between the enterprise and farmers, farmers’ planting risks will be minimized.
3. Survey of affected area
1) General situation of affected area
This project’s area is located at Fuhe Village under Juren Town, Bin County. This village has an area of 18,000km2, 6 natural villages, 789 families and 3084 people, per capita land of 3.4mu, 85% being drying land, and 200 poor families. The per capita net income in 2001 was 1216 yuan. Reasons for poverty include uncontrollable soil loss, low technological level, poor infrastructure, low resistance to natural disasters. Above 95% farmers at the village deal with the operating pattern with focus on grain. There is no water conservancy work to resist spring drought and summer flood. The per mu grain yield is 150kg, planting corn and soybean. From 1999 through 2002, the soybean area was 4500mu, per mu of high oil soybean is given a state subsidy of 8-10 yuan.
2) Case interview
In the case interview, we concentrated on the form of participation of farmers under the large scale production of soybean; the advantage of soybean planting over other crops is the high profit, little manpower input and small risk. Whether poor families, women or major planters have responded actively to soybean planting. See Case 1 and 2.
Case 1: Shao Xiuhua, female, 51 years, living at a 4-member family. Her family has 13mu land, growing soybean (6mu) and corn (7mu), the per capita annual income is less than 500 yuan. Now there is a loan of 5000 yuan borrowed since 2001 at the interest of 6%. 80-90% farmers at the village are on debt for planting. The soybean output was originally 250-300 catty, the average price in the last year was 1.1 yuan/catty, purchased by visiting dealers or sold by ourselves. Since 2000, the price has been relatively stable at about 1 yuan/catty. We began to plant high oil soybean since the last year, according to the soybean revitalizing plan, the price would be 15% higher than ordinary soybean, the output would be 180km/mu, the product will be sold to the oil plant.
25 For her family’s regional restrictions, she is unable to participate in the projects. She is very eager for the seed and techniques to be provided by the company to make her able to deal with soybean planting.
Case 2: Xia Qingfu, male, 39 years, in a 3-member family. There is 12mu land and no paddy field at home, planting corn and soybean. His family raises pig at ordinary times and would does some jobs sometimes. Longfeng Seed Company offers poor people free seed, techniques, fertilizer and regular technical guidance.
4. Comments of SA Team
1) This project aims to develop high-end soybean products using local soybean resources. It is expected to develop fine processing and improve the overall operating level of the industrial chain by developing the end market of the soybean industrial chain.
2) In the combination with farmers, try to fully bring along groups of different conditions in poor rural areas, solve problems in production facilities and technical popularization practically and guarantee purchase at preferential prices. Apply special support policies on women and poor people.
3) Since this product needs to further develop the market. There should be an allowance in price adaptation to effectively avoid market risks.
C. High-oil soybean technological popularization & integrated demonstration project of Fujin City
1. Project introduction
This project is a new project, the executive unit is Fujin Meiya Seed Limited. This company is a nongovernmental hi-tech business dealing with seed cultivation, technical popularization, with its business scope covering 12 provinces of China, boasting strong technological strength, R&D capability and a perfect marketing network. The project will construct a 2,000mu high oil soybean original seed base and a 20,000mu fine breed base to produce 330t high oil soybean original seed and 3300t fine breed a year. The soybean production shall be subject to unified seed supply and standard cultivation. The technical support unit of this project is the Northeast Agricultural University.
2. Mode of cooperation with farmers
This project involves above 1000 farmers and will be run in the pattern “scientific research unit +company +farmer association”. The production equipment shall be managed by the planting industry association, farmers shall become a shareholder with means of production. The company’s technical personnel shall be retained to organize, unify the production process. Original seed will be supplied at the half price, the purchase price will be 15% higher than the market price of commodity grain. The association is responsible for the support services to centralized planting and unified production.
26 The winter training of farmers shall be carried out in a centralized or decentralized manner, or with different media (TV, broadcast, publicity materials) in the production process.
3. Survey of affected area
(1) General situation of affected village and sequencing
Background of Desheng Village in Changan Town: 940ha land, 205 families, 946 people, per capita income 2000 yuan. 50-60 families are relatively poor, 1/3 medium families and 1/3 rich families. Last year, 70 families attended the the soybean project on a land continuity basis. The government selected this place because the land is continuous and the public’s activity is high. A farmer association has been set up to provide planting and sales services to farmers. It has already held 2 meetings, attended by affected farmers, mainly discussing the planting process.
Sequencing of different species
Sequencing (excluding labor costs):
Labor time Labor intensity Risk Soybean 4 4 2 Wheat 5 5 4 Corn 3 3 3 Paddy rice 1 1 5 Beet 2 2 1 Through the overall benefit sequencing, we can see that paddy rice ranks first in both labor time and labor intensity; soybean costs relatively less labor cost, soybean is relatively reliable in resistance to risks arising from price fluctuations, which is directly related to the output and soybean’s quality. As to benefit, paddy rice ranks first, soybean ranks 3rd. It can be seen from this sequencing that, the key factors restricting the local soybean development include the absence of a stable market and low soybean quality. If these 2 problems have been solved, the overall benefit of soybean planting will be the highest, it will surely mobilize the activity of farmers.
Sequencing on standard of living:
Background of poor people in Desheng Village:
Criterion Percent Reason Remarks (%) Good With savings 5 Strong ability, good fortune The state will Medium Without farming on 20 Good luck grant a loan loan only with the Poor Farming on loan, if 70 Bad fortune, low benefit of joint guarantee without the state loan, planting, without sideline; of 3 families no way of farming high costs of marriage and and mortgage of (most fundamental education; nothing to do at property, criterion) leisure time; lack of leading to a technology, low literacy vicious circle Extremely Unable to maintain the 5 Natural and manmade poor basic livelihood disasters
27 Farmers’ suggestions for further development of the village: 1) develop high oil soybean; 2) provide money, preferably the state extends more loan; 3) technical guidance, special support, increase the output with technology and agriculture machinery; 4) there should be investment in agriculture infrastructure (water conservancy work, large field machinery); 5) solve the problem of slack season in farming, develop some other industries in addition to the planting industry; 6) how to find a place for storage and drying, preferably the harvest can be directly handed to the company, which is willing to provide spaces for drying yard and warehouse.
(2) Case analysis
It can be seen from the following case that owing to the heavy family burden, the agricultural income effect of farmers is low. Once the family bears debts or suffers from a risk, it would take a long time for adjustment. The soybean project can effectively avoid risks in production and market links, bring along farmers to get on the approach to industrialized operation and change the current situation of weak risk resistance of the small-scale farmer economy.
Zhang Qiang, 53 years, with 3 children (2 female, 1 male). The dowry for each daughter is 5000 yuan, the expenses for the son to taking a wife are 30,000 yuan. A sum of 40,000 yuan was borrowed and is to be paid off in 10 years. The daughters got married in 1993 and 1996, the son got married in 1999. The income then came from farming, including beet (key source of income), soybean, corn and wheat. At that time, the whole village lived on beet. Later, due to natural disasters, it was no longer suitable for growing beet. In 1999, we replanted soybean on a larger scale. In late 1990s, there was 4ha land and income of 6000 yuan, other expenses are made up by borrowings for the purpose of farming.
Well-off state in his mind: there is always steamed bread to eat, there is oil every meal, there is clothing in winter, the house has no rain leak. Goal: no loan, financial self-sufficiency. The high oil the soybean project can meet this goal.
He has not planted soybean yet, because his family is not in the development zone. By 2004, high oil soybean will be planted to relieve poverty. There are 2 pigs, the cost and net profit of each are 450 yuan and 150 yuan respectively. However, there is no investment to enlarge the scale.
4. Comments of SA Team
Firstly, the project company has a widespread seed marketing network and high goodwill. It should establish a mutual-trust, mutual-benefit cooperative relationship with farmers using its existing advantages and experiences in the soybean project.
Secondly, owing to the strict requirement on the fine variety’s quality, the soybean production links must be standardized, which certainly requires mechanized tillage, unified management. The enterprise must take quality as its first priority, well conduct the training and production management on farmers patiently and meticulous.
Thirdly, beneficial experiences in popularization should be timely summarized to realize the benign interaction and joint development between the enterprise and farmers.
28 D. Soybean project of Hailun City
1. Project introduction
(1) Hailun City is a state-level green soybean production base, renowned as the “native place of quality soybean of China”, abounding in high oil high protein soybean;
(2) There is also a nationwide soybean trading market. The soybean planted area is above 1000,000mu, ranking first among counties nationwide. The idea to develop the soybean industry of Hailun City is: 1) fine variety: 22%-23% oil-yielding rate, the high oil high protein fine variety is suitable for industrialized processing; 2) fertile land: give play to the advantage of natural conditions, driving the quality regionalization with ecological regionalization; 3) good method: realize high output and high efficiency; and 4) benefit maximization: a mechanism with the company in charge and industrialized operation.
(3) The project is a new project, whose executive unit is Hailun Dongsheng Seed Limited, restructured into a joint-stock enterprise in 2002, now it has grown into one of the Top 100 seed enterprises nationwide. The project prepares to build: a 2000mu original seed base, with annual output of 300,000kg original seed; a 20,000mu fine variety base, with annual output of 3 million kg fine variety; fully covering 1000,000mu the fine variety soybean production in the whole city.
2. Mode of cooperation with farmers
(1) Company-driven: train 8000 men-times in the core area in 4 years, improve farmers’ sense of hi-tech and make them use advanced technology automatically via the training on machinery and practical techniques. From Nov through Mar, experts taught lessons in the slack season, oriented to cadres, technical personnel and farmers.
(2) Farmers are responsible for soybean land preparation, field management, harvesting and other agricultural production jobs, and receive technological training. The agriculture machinery, electromechanical wells and farmland capital construction are managed by the farmer association, original seed and fine variety are used by farmers in a unified manner, farmers make a profit by cultivating the original fine variety.
(3) Form of order agriculture: contracting with farmer, purchase of original seed and fine variety at the protective price, which floats with the market price.
3. Survey of affected area
(1) General situation of affected village
Leye Village, with 5 hamlets, a tilled land area of 11650mu, 1810 people, 185 families, of which rich families take a half, the per family income is 8000-9000 yuan from farming and work outside, 30 poor families. It is planned to develop 3750mu soybean fine variety, 140kg ordinary soybean and 180kg original seed soybean. The existing agriculture infrastructure is
29 not matching, especially water conservancy works. Reasons for farmers’ willingness: 1) low investment, centralized land preparation, reducing cost by 15 yuan/mu, tractors are contracted to farmers; 2) easy to manage, under the unified management, the technological level can be kept up; 3) good economic benefit. In the past, people couldn’t understand high oil soybean; with unified management, almost every family can make a profit; 4) professional variety with high benefit, increasing income by 0.15 yuan/catty.
A soybean association (headed by the village head) and a farm machinery association (headed by the secretary of the Party branch) have been set up in Leye Village to play the role of daily training, farmer mobilization, project publicity and coordination.
The concerns in project execution include, 1) technical forces, quality and output, especially mode of cultivation; and 2) agricultural base and supporting facilities, including roads, wells, bridges, culverts, etc.
(2) Case interview
Case 1: Zhang Yagen, female, 55 years, lives in an 11-member family. She has 3 married sons and 3 grandsons. 5 of the 11 members are working outside, in which a son earns 10,000 yuan a year. According to her, Hamlet 2 is the most active one in the project, where there is a per capita land of 6mu and above half men are working outside, women mostly take care of housework and field at home. In addition to Hailun City, villagers are also working in Harbin, Heihe, Sanjiang and even Russia. Their jobs include builder, small business, vegetable planter, etc. For a builder, the daily pay for ordinary physical labor is 20 yuan, a skilled worker can earn 40 yuan a day.
Except working outside, the family’s key source of income is agriculture. There is 4ha land at home, growing corn, potato and soybean, of which soybean is planted on 3ha land. Since the family failed to reach an agreement, the family didn’t participate in the soybean project until this year. As for whether to take part in the project, the couple has made a joint decision. She is willing to attend the World Bank project, mainly because the soybean variety popularized by the project is fine and suitable for the locality with high output. Dongsheng Company has also promised a price markup of 0.15 yuan for 1 catty soybean. Farmers at this village have attended the soybean project for 2 years, everyone has seen the output and income increase effect as a result of the project. She estimates that the planting of the fine variety soybean will increase income by 700-800 yuan/ha, which can just offset the agricultural tax and other costs on 1ha field. She is presently planting commodity soybean. The per ha yield of an ordinary soybean variety may be 3600-3700 catty. If the fine variety soybean is planted, the yield will be nearly 5000 catty, thus:
The commodity soybean price last year was 1.2 yuan/catty. The costs for planting commodity soybean include: agricultural tax of 400 yuan/ha, mechanical tillage expenses of 300 yuan/ha, fertilizer cost of 700 yuan/ha, seed cost of 240 yuan/ha, 2640 yuan/ha in total. Her family has planted 3ha land, there are also incidental costs of about 1000 yuan, the total cost will be 5920 yuan. The high-yield soybean can attain the harvest of 5000 catty/ha and 3ha land can attain 15000 catty, if it is sold at 1.2 yuan/catty, the gross income would be 18000 yuan. If the cost of 6000 yuan is subtracted, the profit is 12000 yuan.
30 She thinks that there is no technical problem in participating in the World Bank project, she is satisfied with the technical service offered by Dongsheng. She says, Dongsheng practices full course technical service, field training and door-to-door technical guidance, which will surely ensure the technical qualification in fine variety and original seed planting. Since the World Bank’s loan is not in place yet, this project is not formally started in this village, villagers just have the intent to cooperate with the company but have not entered into a contract. Farmers do not have a formal contract sample yet. Farmers know about the company’ commitment to them: the company promises that the minimum protective price of soybean fine variety is 1 yuan/catty, that of original seed is not known yet, the company has also promised to purchase at a price 0.15 yuan/catty over the year’s purchase price. Since the project company practices centralized planning, the planting location will be selected according to the local conditions. Farmers to be involved shall be determined by their land location, whether the location fits the planting of fine variety or original seed, so the farmers attending the forum do not know whether their land will be planned for fine variety or original seed. However, everyone is very clear that, the price of original seed is higher than fine variety, they all want to plant original seed.
Since many men are working outside, women staying home undertake a great amount of field labor and housework. Women say that, since the implementation of the contract system with remuneration linked to output, especially in the past 5 years, their labor intensity is higher and higher. However, all of them say that they have no choice. The situation is, it is impossible to earn much from agriculture to support children’s education and improve their living standard. Accordingly, they must earn money by both working outside and dealing with the planting industry. Zhang says that, excluding the productive investment, the living expenses and other incidental costs of her family amounts to 7000-8000 yuan a year. The family is seriously short of money.
When speaking of the risks in participating in this project, farmers say, the project company has addressed their greatest concerns in marketing of farm products and technological service; there is almost no other risk. Zhang has proposed the irrigation problem in this project. There are 12 wells at Hamlet 2, but there is one set of nozzle tube equipment only, the irrigation equipment is scanty; the farm machinery problem: the technical requirement for planting fine variety and original seed is high, the present soil drilling depth is not enough, there is urgent need for soil drilling machines and other agriculture machinery.
4. Comments of SA Team
Firstly, the company has shown concern for the interests of poor people and women, allowing them to attend the mass production, avoiding the problems that they would possible meet with in individual operation due to the shortage of labor, fund and technique.
Secondly, the company’s considerations in running the project include: 1) standard supply of seed; 2) large-scale operation; 3) standard cultivation; and 4) “1 main factors and 3 auxiliary factors” in cooperation with farmers: the main line of company-base-farmers; support with technical support unit and policies, assistance from farm machinery and soybean association. The company cannot fully represent farmers’ interests and need the association’ supervision (a sound local agriculture association has been developed) and unified coordination.
31 Thirdly, a new operating organizational form has been explored, generating a variety of forms of industrialization organizations, e.g., leading enterprise +cooperative economic organization +farmers, leading enterprise +broker +farmers, leading enterprise +operating company + farmers.
E. Potato seed project of Nahe City
1. Project introduction
This project is a new project. The project location of Nahe City is the “native place of potato of China”, whose potato planting area ranks first among counties nationwide. The executive company is Nahe Xinfeng Seed Limited, a joint-stock enterprise integrating detoxified potato seed cultivation, production and marketing, with total assets of 12 million yuan and tilled land of 3400mu, one of the largest county-level seed companies in Heilongjiang. The technical support unit is the Northeast Agricultural University and the construction location is Tongxin Township under Nahe City. The project plans to construct a detoxified potato fine breed base. When the project is completed, the company may produce 140t detoxified potato original seed, 1870t original seed first generation potato and 30000t original seed second generation potato a year.
2. Mode of cooperation with farmers
This company has united into the industrial community of “company +base +farmers” in its long-term cooperation with potato planters based on its technological advantages, industrial advantages and market advantages.
This project employs the marketing mode of company + farmers. The detoxified tube potato seedling and original seed are sold inside the company at an internally fixed price. The first generation of original seed is sold to potato planters at 2000 yuan/t, potato planters may make partial payment or fully on credit, the payment will be deducted from the profit when the 2nd generation of potato original seed is recovered in autumn. The recovery price is 400 yuan/t, the export price is 600 yuan/t.
5000 men-times of farmers are trained annually, so that every potato seed family will have a member that masters the potato seed production and planting technique.
3. Survey of affected area
The affected area is located at Tongxin Township under Nahe City, with an area of 29400mu, including 3400mu potato original seed yard. Wenguang Village under Tongxin Township has an area of 26000mu, including a tilled land area of 23400mu, accounting for 80% of the total area; 3000mu woodland, accounting for 10%. The tilled land is completely dry land, growing soybean, potato, beet and beans. From the perspective of land utilization, the tilled land area is great, farmers’ income comes mainly from the planting industry. This village is a typical dry farming area.
32 Wenguang Village, one of the affected villages has 800 families, 4000 people, 6 hamlets and grew 5000mu potato in 2002, 8000mu in 2003, will grow 15000mu in 2004. There are 700 potato planting families, all under a contract, including 300-400 commodity potato planting families. Compared to commodity potato, the planting of potato seed can earn 50-100 yuan more, farmers’ sense of participation in the project is being updated gradually, because they have seen the apparent benefit from potato seed planting. 30-40 villagers are working at the potato original seed plant, paid 10-15 yuan/day.
Through the comparison with other crops in benefit, production difficulty and market risks, the reasons for farmers’ actively participating in the project can been seen, see Case 1.
Case 1: Sun Jianjiang, male, 36 years, living in a 3-member family, his child is just 2 years old this year. His family has 35mu land, of which 15mu is the contracted land after allocation of field to family, 20mu is subcontracted from others, for which a contracting fee of 130 yuan /mu should be paid to the original contractor of the land before the spring seeding every year. The main crops are soybean and commodity potato. According to him, the per mu net profit of soybean is 100 yuan, the net profit of commodity potato is slightly higher than soybean, generally 0.1 yuan/catty. He family also raises 2 pigs, each can be sold at 500-600 yuan. Last year, he worked 3 months at Xinfeng Seed Company (paid 300 yuan monthly, 30-40 people of this village are working there, more than a half being women). Since the original seed quantity offered by Xinfeng Company is limited, his family was unable to attend the project this year. He prepares to attend this project in 2004, plans to plant 20mu potato seed, the cost input per mu is about 300-400 yuan, which higher than commodity potato, but the survival rate of potato seed is above 95%; in contrast, the survival rate of commodity potato is 50% only. The company also offers full course technical service and technical training, solving the greatest technical problem. Moreover, the company guarantees the recovery of all potato seed, solving the farm product marketing problem, which is the greatest concern of farmers.
4. Comments of SA Team
Firstly, this project is based on the local potato industry’ advantages and has accurate market positioning.
Secondly, this project requires less investment and is quick-acting, producing a direct driivng effect on relevant industries.
Thirdly, in the cooperation with farmers, the advantages of the company + farmer pattern has been exerted, attention has been drawn to support disadvantaged groups. While farmers are obtaining significant proceeds with help, they’re gradually accepting new skills and new concepts.
Fourthly, since this project directly relates to the quality of farm products, it is suggested to well conduct the technical monitoring in potato seed cultivation. Meanwhile, to effectively avoid purchase risks due to price fluctuations, it’s necessary for both parties to enter into a definite contract, lest one party’s change brings losses to the other party.
33 F. Protected agriculture project of Daqing City
1. Project introduction
The project undertaker is Lvfeng Technologies Development Limited in Daqing Hi-tech Zone, the company was founded in 2001 as a hi-tech joint-stock enterprise, with a registered capital of 5 million yuan. This project is an integrated demonstration zone development project that integrates vegetable production, forest seedling, gardening and resistant seedling cultivation. When the project is put into production, it will yield 1443000 seedlings, 1485000kg green organic vegetable, realize an output value of 5,302,900 yuan. This project is technically based on the Northeast Agriculture University and Northeast Forestry University.
2. Mode of cooperation with farmers
This project applies the organizational form of “company + farmers”. After its completion, the project will be a facility agriculture technical demonstration example. The company shall undertake large infrastructure for use by farmers all the year round, cultivate fine seedling and means of production to be provided to farmers gratuitously at preferential prices. Any supporting technique for protected agriculture shall be taught to farmers through the annual technical training and technical services. There are 3 modes of cooperation with farmers: 1) direct participation of farmers: farmers shall conduct vegetable production by contracting a greenhouse at the affected area, involving 50 farmer families; 2) contractual farmers: the company shall enter into contract with farmers, the company shall provide technical services and technical guidance gratuitously, provide farmers with seedling and means of production at preferential prices, involving 400 farmer families; 3) radiated farmers: the company shall provide technical services and technical guidance gratuitously, provide farmers with seedling and means of production at preferential prices, involving 4000 farmer families.
3. Survey of affected area
(1) General situation of affected village
The first farm of the Daqing Hi-tech Industry Development Zone borders on the Hongqipao Reservoir on the east and National Highway 301 on the west, with the geographic coordinate of E125°11’; N46°37’. It is 4km from the location of the Daqing Government, located at the outskirt, enjoying convenient traffic. The first farm has 88 families, 343 people, 98 registered employees and 33 retired workers.
The farm’s land is state owned. Each family is allocated with 2ha land (30mu), mainly used to grow corn.
At present, the first batch of farmers of the first farm has participated in the project. About 10 farmers are practicing at Lvfeng Company’s greenhouse. Some of them are prepared to deal with greenhouse planting after the practice and enter into contract with the company to apply the greenhouse and other agricultural facilities freely granted by the project for production. The company shall provide seedlings and means of production, the produced products shall be recovered by the company. The company shall treat, pack recovered seedlings, vegetables
34 and other products for unified distribution. The net sales income shall be equally shared by the company and farmers.
(2) Farmers’ perception of project
The mode of participation in the project selected by the farm is recommendation of applicants according to their household financial situation and their own learning ability to Lvfeng for practice.
There are 3 modes in which farmers participate:
Directly involved farmers: farmers shall study and work at Lvfeng’s greenhouse and then deal with greenhouse back home.
Contractual farmers: farmers that have directly attended the training must enter into contract with the company, the company shall provide technical services and technical guidance, offer them seedling and means of production at preferential prices, when the project is completed, there will be 400 involved farmer families a year. These farmers will save costs by above 20% and improve the product output by above 15% compared to the former mode of production, the quality will also be greatly improved, the selling price will be above 20% higher than before. The products produced will be recovered, treated, packaged by the company in the unified way for distribution.
Radiated farmers: the affected area’ construction will surely drive farmers around the area, the company shall provide technical services, market information, quality seedling and other means of production all the year round to help them raise the technical level in production. This mode will involve 4000 farmer families.
(3) Case interview
Wang Guirong, female, 38 years. Her family has 4 members, her daughter is 14 years, her son 13 years, who has suspended his schooling for 1 year for sickness and spent medical expenses of 10,000 yuan. There is above 10mu corn land at home, per mu yield being 700-800 catty. If the cost is counted in, the income is 60 yuan/mu only. She has the cattle raising experience of above 3 years. The family raises 15 heads of beef cattle presently and sold 10 heads last year, earning above 10,000 yuan. She says, grass is short there for cattle, so cattle raising cannot reach a large scale there. There are frequent droughts there, especially in spring. The ravage of drought is especially serious this year, affecting crops greatly.
In Mar 2003, she entered into contract with Lvfeng Company and is now receiving training on seedling cultivation skills at the company. The company shall contribute seedlings, skills and places, farmers shall contribute labor at a monthly pay of 400 yuan. After the training is completed, the company shall provide seedlings at the fair price and advance the payment for seedlings, which shall be paid after harvest. The company also offers free technical training and low-price agricultural materials, purchases seedlings. According to her, a seedling can be cut 3-4 sections a year, each 12cm long and worth 0.04-0.05 yuan, each section of main root is worth 0.1 yuan. Thus, the gross profit per mu will be above 3000 yuan.
35 She has not participated in the project of greenhouse vegetable plantation because the input cost is too high, the greenhouse area planned by the company is relatively limited and the price of gardened seedling is stable. However, greenhouse planting will be more profitable, the per mu gross profit will be above 10000 yuan.
4. Comments of SA Team
Firstly, the project has developed green agriculture and overcome the disadvantages in local agriculture, such as coldness, salina, pollution and low management level, contributed to the building of a sustainable community environment and industrialized agriculture.
Secondly, the company offers 3 forms under the “company + farmer” pattern: for farmers without fund or technique, they may work at the base first; for farmers with fund but without technique, they may develop greenhouse planting automatically; with technical popularization, it is still possible to attract richer farmers to construct greenhouses, providing broad spaces for the best combination of manpower, financial and material resources.
Thirdly, since the project has a high technological level and its operation is complex, farmers have a slow perception of it, the enterprise should pay attention to the strength of publicity; the construction of the affected area should give full play the advantages of joint construction between the government and enterprise, between the locality and university, between farmers and the enterprise, coordinate the relationship between the enterprise behavior and economic revitalization.
G. Harbin Dongjin red grape production project
1. Project introduction
The undertaker of this project is Harbin Dongjin Modern Gardening Limited. This company is a leading enterprise of Heilongjiang in agricultural industrialization and the largest closed ecological planting base of high-grade fruits and vegetables in China by now that has won the certificate for nuisance free farm products. The company has total assets of 120 million yuan, mainly dealing with red grape planting, vegetable production, processing and storage of local distinctive farm products. Since 2001, 2000mu red grape planting land has been completed by now. It is estimated that grape that enters the full fruit period will complete sales income of 15 million yuan this year.
2. Mode of cooperation with farmers
(1) Through quota operation, the company ensures that farmers can collect 200 yuan from per mu land a year. The land use is managed by the company, farmers may deal with processing jobs at the company to earn wage (monthly average 460 yuan/person).
(2) The land use is managed by farmers, who shall obtain fine variety, fertilizer and field management techniques from the company;
36 (3) Farmers place orders with the company, conduct planting as required by the company and the company shall purchase fruits punctually at the fixed price.
(4) Among the 176 farmer families involved in quota operation, 152 families are engaged in order planting. The company pays the training charge and organizes them for theoretical study and practical guidance, especially in leisure time. Attendees of lectures are paid a wage and those outstanding are rewarded, which has greatly mobilized farmers’ activity in learning science and technology to improve their own qualifications. They have thus become knowledgeable, skilled agricultural workers.
3. Survey of affected area
(1) General situation of affected village
Wanbao Village, one of the affected villages, has 613 families, 7123mu land, 2165 people, 488 women laborers and 3 natural villages, per capita land of less than 3mu. At present, the per capita income is 3500 yuan, that in 2000 was per capita income 2185 yuan; that in 2001 2195 yuan, that in 2002 3150 yuan. There are 27 poor families, with per capita income of 800 yuan, mostly aged or sick. The per capita income of rich families is nearly 20000 yuan. The richest one deals with passenger transport and contracts 80 bus routes. The company employs 100 workers, the 80 women workers are each paid 400 yuan/month, a man worker is paid 500 yuan/month. About 100 villagers are working outside the province.
(2) Farmers’ perception of project.
During Jul-Aug 2000, with the government’s help, a cooperative relationship was established with Dongjin Company to drive the agricultural restructuring. The Phase I construction in 2000 covered 36 farmer families, 224mu land at an investment of 10 million yuan, building 208 cold sheds and 110,000 seedlings. In 2001, the project covered 45 families, 443mu land at an investment of 18 million yuan, building 308 cold sheds and planted 200,000 red grape seedlings.
The Phase 3 quota operation in 2002 covers 92 families, 850mu land, 560 greenhouse at an investment of 30 million yuan, planting 260,000 seedlings. In the order corn project in 2002, 152 farmer families placed an order, 1500mu quality corn was planted, increasing income by 300 yuan per mu land. The above 2 projects cover 324 farmer families, accounting for 53%.
The company publicizes the market prospect to farmers in an equal negotiation relationship. For centralized planting, an association will be established this year on a voluntary basis. The project’s introduction has updated farmers’ concept. Previously, farmers dealt mainly with big corn, big eggplant and big cayenne, now farmers may work outside and there is a good beginning of order agriculture, the annual net income on per mu ordered corn can be 500 yuan. The company rents land from farmers at the rent of 230 yuan/mu.
(3) Case interview
Case 1: Wang Kun, male, 37 years, in a 14-member family. The family has 20mu paddy field, previously grown with paddy rice. The family later contracted 80mu land from the village collective at the contracting fee of 15.6 yuan/mu/year, the per mu yield of paddy reached 800
37 catty. With the villager committee’s introduction, the family began to grow corn in together with Dongjin Company. The company advances funds (for seed, fertilizer, etc, to be deducted after the autumn harvest). The company finds market outlets, Grade I corn is 0.28 yuan/catty, Grade II 0.25; Grade III 0.18; Grade IV 0.15; Off Grade 0.5. In the whole process, farmers do not have to pay cash. The company also provides technical services. Per mu costs in corn planting: fertilizer, above 40 yuan; seed: 20 yuan; pesticide: 1-1.5 yuan; farm manure: 7-8t. The harvest can be 2700-2800 spikes/mu, the per mu input is about 100 yuan. In the harvest, 40% is Grade I, 50% Grade I and 10% others. The company’s purchase price is 0.17-0.18 yuan per spike, the per mu net income may be 350-400 yuan. Although there is about 100mu land at home, he thinks he and his wife can completely serve the land using mechanical aids. In the slack season of above 9 months, they can still work at the company, attend the technical training, learn grape planting and other planting techniques. Men usually undertake heavier physical labors, such as watering, land leveling, weeding and pesticide spraying, women are responsible for management and harvesting.
Through the interview with farmers, there is the following common understanding as regards the project’s influences on farmers: 1) change the rural planting structure, reduce farmers’ investment, solve their difficulty in farming and marketing; 2) the company’s purchase price is reasonable, increasing farmers’ income by 150-200 yuan/mu; 3) promote the agricultural production of affected villages, the income increase of tens of order families have set a good example for village-wide planting families; and 4) the company has driven the progress of agricultural industrialization.
4. Comments of SA Team
Firstly, this project is significantly characterized by the core capability of the enterprise in the company + farmer pattern, namely preventing the market and preliminary investment risks for farmers.
Secondly, the 2 modes designed by the company, namely order mode and base mode, feature definite property right, commercialized factors and free operation.
Thirdly, in the company + farmer pattern, the participation of the government, enterprise and farmers is essential, they can exert their own advantages: the government’s policy orientation involves numerous families and provides the credit guarantee; farmers participate actively; the injection of the enterprise’s financial resources.
Section 3 Protected Agriculture
A. Harbin new energy integrated utilization and green product development project:
1. Project introduction
38 This project consists of 3 subjects: Harbin edible fungi project, Haishun cultivation project, solar energy greenhouse and biomass energy gasification integrated utilization project; undertaken respectively by Heilongjiang Yufeng Fungi Industry Co., Heilongjiang Haishun Cultivation Limited, Harbin Jingjing Agro-tech Development Limited and Heilongjiang Lvxiangcun Integrated Agricultural Development Limited.
(1) Build 7000m2 fungus cultivation and mushroom rooms at an investment of 1.4 million yuan for farmers. The enterprise newly builds 800m2 fungus seed center and processing center. It is planned to an edible fungi hi-tech demonstration base with annual output of 100t processed dry edible fungi and 670t fresh products in 4 years.
(2) 4400m2 cowshed supports works, including 6 silo bin (572m3/bin×6=3432m3) and civil work for 440m2 milking hall; 20000m2 pigsty; 5000m2 forage processing plant (including raw materials warehouse, finished goods warehouse and processing room); and 2250m2 excrement treatment and organic fertilizer processing plant; and 2) purchase 300 hostelns; import 380 pigs; 400 cow embryos, 6000 frozen semen particles; 15000kg fine forage grass seed (planting 6000mu forage grassland)
(3) 10ha demonstration zone, including 20 solar energy/wind energy seedling greenhouses with a building area of 8400m2, each building 420m2. In the biomass energy gasification integrated utilization project, the green food dehydration processing plant occupies area of 2000m2, building area of 600m2, the ecological popular agricultural science education base is 10000m2, the sweet corn cultivation base 2500mu,vegetable 2500mu.
(4) The scale of the seed cultivation demonstration base subproject is 13380m2, of which the base construction 9200m2, enterprise construction 4180m2. When the project is put into production, it will cultivate 670,000 quality seedlings, 7.65 million sections of spikes, 6 million seedlings and produce 25 million CIS base blocks per annum.
2. Mode of cooperation with farmers
(1) Yufeng Fungi Industry’s cooperation with farmers
Farmers and the company are in a mutually beneficial cooperative relationship, other than an affiliation, they keep separate accounts and develop interactively. The company sells fungus seed and relevant materials to farmers at the cost price, farmers shall conduct mechanical blending, bagging, disinfecting at the disinfecting center according to the company’s technical guidance. When fungus seeds have sprouted, farmers shall carry cultivation bags to their own mushrooming shed for fungus cultivation and mushrooming. Upon mushrooming, farmers shall collect mushroom according to the contractual standard and the company shall purchase mushroom at the contract price.
With the support of the local civil administration authorities, farmers (mushroom planters) planting edible fungi are organized into an association of mushroom planters to enter into a production and distribution contract with the company on behalf of planters, organize planters to exchange production experiences and attend the technical coaching and seminars held by the company’s technical. Mushroom planters either produce family by family or cooperate with each other.
39 (2) Haishun Cultivation’s cooperation with farmers:
Through the project’s execution, 150 poor families will be basically relieved of poverty in 4 years. Through order agriculture, 6000mu forage grass will be planted annually, to increase the per mu income of planters by 150 yuan; the nuisance free excrement treatment, production and application of organic fertilizer will improve the environment and the quality of farm products, and increase farmers’ income.
(3) Jingjing Company’s cooperation with farmers
The project mainly serves farmers at its location to provide them with quality seedlings and ecological gardening techniques, greenhouse techniques, green food test service, technical training and purchase of farmers’ green products. In step with the construction of the project, special technological training and popular science education will be given in the from of Web multimedia, audio-visual instruction, broadcast/TV lecture, distribution of technical materials, spot technical guidance. The project plans to train 2000 men-times of farmers in 4 years, set up a backbone technical team of 200 people. For the operating period of 11 years, the project will train 10,000 men-times of farmers and set up backbone technical team of 1000 people.
(4) Cooperation of Lvxiang Village with farmers
The company provides land, water, seedling, fertilizer, pesticide, equipment, labor training and technical guidance to farmers free of charge; qualified seedlings cultivated by farmers shall be recovered and distributed by the company at a price equal or higher than the market price.
3.Survey of affected area
(1) General situation of affected village
The affected area is located at Dongsheng Village under Hongqi Township, Nangang District, Harbin, with 800 families, 3200 people, 12000mu tilled land, 4 natural villages and 2 villager committees, having introduced 4 leading enterprises. The income comes from cultivation, the per capita income is 3700 yuan. There was an enterprise at the village, which has closed down now and the employees have become villagers.
(2) Case interview:
Case 1: Wang Hongxia, female, 34 years, in a 3-menber family. She prepares to participate in Yufeng Company’s project in the second half of the year. There are over 20 families planting edible fungi at the village. She planned to grow edible fungi when she had seen others making money by planting edible fungi. At ordinary times, she would learn basic knowledge at the park of Yufeng Company. Yufeng Company also publicizes that edible fungi planting is a job suitable for women. She wants to plant edible fungi at home, because she can give attention to the field and family. To conduct planting at home, it’s necessary to build a simple greenhouse, which requires the investment of 12,000-14,000 yuan. She may learn skills and buy fungus seed from the company. Wang’s suggestion is that the company provides full- course services and advances a part of the investment for her for later repayment.
40 Case 2: Li Shuyan, 42 years, in a 5-member family. Her family has 10mu land, growing corn. The couple would work for 2-3 months at the park every summer, each paid 10 yuan a day. Lvxiangcun Company is located at Jinxing Village and has entered into a contract for sapling planting at the park with some farmers of this village since this March. These farmers have become typical farmers supported by Lvxiangcun, with the villager committee’ introduction, these farmers have entered into a 3-year contract with the company, where the company shall provide seedlings, techniques and tools, farmers shall contribute labor. The income will be shared at the ratio of 4:6. 10 families of the village have participated in the project, assigning women for labor at the park. There will be income by the end of October. Lvxiangcun has rent 360mu land at this village at the annual rent of 300 yuan/mu, farmers may also work at the plant. Farmers agree with the company’s practice. She says, there are several benefits:: 1) farmers contribute labor without paying money; 2) the park is in the village, close to their houses, so they can also take care of their own field; 3) absorb women for employment.
June is their busiest month, when their daily living chart is:
5:00am, getting up
5:00-8:00, breakfast, housework
8:00-11:30, work at garden, weeding, fertilization, watering
11:30-1:00pm, lunch, housework
1:00-6, 7:00, work at garden, weeding, fertilization, watering
7:00-8:00, supper
8:00-9:00, watch TV, chat
After 9:00, sleep.
Case 3: Lang Wencai, 57 years, dealing with pig raising, his children are working outside, he and his wife raise pig and plant 30mu corn and soybean. In pig raising, Haishun offers piglets and assists in epidemic prevention, the family raises pigs and assists in forage formulation, pigs will be purchased by the company at a price 0.2 yuan higher than the market price. Pigs are raised 3 times a year, 40-50 heads at a time. The cost of a piglet is 120-140 yuan, bought on credit. It takes 3-4 months to raise a pig, which can make a net profit of 120-140 yuan.
Case 4: Tian Zhongxuan, female, 51 years, having planted corn for 2 years in cooperation with Jingjing, living in a 6-member family. Her husband plants 24mu corn and raise 3 cows, with annual income of 20,000 yuan. I support my husband by herding cattle at the field or riverside. The company offers seed, mulching film, organic fertilizer and techniques. The net income on 1mu land is 450 yuan. Her daughters works at a new supermarket in the town, paid 700-800 yuan a month.
It can be seen that villagers are already participating in the project.
4. Comments of SA Team
41 The 4 subprojects under this project have played the advantages of enterprise operation: build up famous brand and develop market with technology; be oriented to farmers in many ways, including the provision of quality services both before and after production; retain experts to develop the industry in alliance with farmers.
In the execution process, the project has adhered to the organic combination with farmers: industrial operation, cooperative development and direct preference, specific ways include order production, joint-stock cooperation, integrated development, foundation of cooperative organization, absorbing farmers to work at the enterprise, etc.
B. Vegetable seedling breeding & technological popularization project of Hailin
City
1. Project introduction
This project’ executive unit is Hailin Sijichun Green Industry Limited, with registered capital of 13.42 million yuan. The project technical support unit the Planning & Design Institute of the Ministry of Agriculture. By introducing 28 varieties of fruits and vegetables both at home and abroad, this project implements seedling industrialization, has produced 8 million high quality vegetable seedlings and set up an efficient agro-tech demonstration base with annual sales of 4.32 million yuan. The affected area is located at the Hailin Ecological Agricultural Development Zone in Heilongjiang. At the vegetable village in the zone, greenhouses and sheds of 2000mu have been built.
2. Mode of cooperation with farmers
This project is based on specialized greenhouse vegetable production families, tied by the seedling company, operated in the mode of order agriculture. The company produces quality nuisance free vegetable seedlings, transfer profit to farmers; farmers, having received the company’s technical training, shall be responsible for production management and become the company’s production workshop. Products are sold on the market or recovered by the company, which will ensure the interests of farmers and increase their income; the company is responsible for seedling breeding, product processing, distribution, becoming the guarantee of technique, fund and marketing to farmers.
3. Survey of affected area
(1) General situation of affected area
Hailin City has a tilled land area of 67,00ha, accounting for 10.3% of its total area. In recent years, the vegetable base has increased its area steadily. In 2002, the city’s exposed vegetable area was 4.90,000mu, accounting for 8% of the city’s tilled land area; the city’s greenhouse vegetable area has reached 4300mu.
42 The affected area is 12km from Mudanjiang City, 180km from the Suifen River Port, 280km from Harbin, 20km from the Mudan River Int’l Airport, run through by the Sui-Fen Railway and National Highway 301.
There are 1642 families and nearly 7000 people at the vegetable village, with a land area of 11000mu and 6400mu vegetable field, of which the greenhouse area is 2040mu and per capita tilled land 1.6mu. The whole village’s revenue is above 30 million yuan, per capita income 3115 yuan. 60% villagers plant vegetables, 40% villagers deal with the primary industry, few are planting grain. Vegetables are mainly sold to Mudanjiang City (above 50 million catty) and exported to Russia (10 million catty).
(2) Farmers’ perception of project
Aiming at the local seedling and variety problems, the project has entered into an intentional contract. The company enters into contract with the village, villagers reports the quantity of seedlings needed, involving nearly 800 families, including all vegetable planters. The other 300 families till on field or deal with the tertiary industry. As reflected by villagers, a seedling cultivation and processing plant can conduct unified seedling cultivation and offer assuring varieties, reduce costs and labor. Farmers may pay 30% first and pay the balance after their harvest. The company has its own seedling cultivation base, the village simply buys seedlings from the company.
(3) Case interview
Case 1: Wei Jinyou, 43 years, in a 4-member family, with 2 children studying at high school, costing above 10,000 yuan a year. The greenhouse is used to grow vegetable, with an annual gross profit of 80,000-90,000 yuan and net profit of 60,000 yuan. Costs: film, seed, pesticide, fertilizer and labor. He has been growing vegetables and selling them to Russia via the village sales agency. Now vegetables are undersupplied, there has been little market fluctuation in the past 10 years. In vegetable planting, the seed selection is especially important. The seedling cultivation plant can solve this problem. We can delay in payment. The company provides the technical training. The village has organized villagers to visit other vegetable bases, such as Songyuan in Jilin Province and Shouguang in Shandong, once-twice a year. However, it is impossible for the village to organize all villagers for a visit. The seedling cultivation plant has given every family a chance to learn advanced planting techniques.
Wei is chairman of the vegetable association. Now, 7-8 families in the vegetable association would buy some seeds for trial planting and then popularize their experience to other farmers to share their risks. The association helps farmers build greenhouses, sell products, deliver information, publicize the project and organize techniques.
Seedling cultivation: germination, stimulation of germination, insemination, field planting at 2 months. The whole seedling cultivation process lasts 70-80 days.
For the first round of seedling cultivation in Dec-Mar, heating, heat preservation, watering and pesticide application are necessary. The investment in 5mu land of seedling is 3000 yuan.
For the second round of seedling cultivation in Jun-Jul, no heating is needed, the labor is not so intensive.
43 Seedling cultivation is the most labor-intensive job in vegetable planting, which must be done by both men and women. When the seedling cultivation problem is solved, land and labor can be saved and the seedling cultivation cost reduced. The temperature, germination hastening, disease control and variety selection are very difficult and risky. Vegetable planting relies on manpower mainly, a couple can deal with 4-5mu land. Sometimes it’s necessary to employ a worker.
According to the above case, we can learn that previously, families cultivated seedlings and purchased seeds separately, wasting a lot of time and effort. The centralized standard seedling cultivation by the company can shorten the seedling cultivation time and increase the survival rate and output. The production conditions are improved and the content of harmful matters in vegetables is reduced.
5. Comments of SA Team
Firstly, the project is based on the practical situation of little tilled land to develop vegetables, especially greenhouse anti-season vegetables, radiating the peripheral areas or directly export overseas, opening a path of agricultural industrialization that meets the local distinction.
Secondly, the project’s execution engage some idle farmers in vegetable planting, relieving the pressure of demand of local idle rural labor for social reemployment.
Thirdly, the project is focused on the intensive seed cultivation link of farmers in production, activating the whole production flow and can be said to achieve the result with half efforts. So it is greatly welcome by farmers.
Fourthly, the company must control the quality on the seed cultivation link, so that farmers can plant assuring seedlings. In market development, it can learn more experiences and create a sound brand.
44 Chapter 3 Exploration into Company + Farmer Pattern
I. How can “company + farmer” avoid and cope with market and technical risks in agricultural industries with different distinctions
The most concerned issues for the company + farmer pattern include, 1) whether this pattern is more adapted to the requirements of market economy and more effectively avoid market risks than any form before; 2) whether this pattern can better promote the role of technology in agricultural industrialization and reduce technical risks. From the project investigation, we can see different ideas of different projects in perfecting the industrial chain and driving the industrialization process, as well as various forms of company + farmer. Hereunder, we will make a specific analysis of key industries of Heilongjiang from the perspectives of source of seed and breeding, plantation and stockbreeding, primary products and high-end products, conventional agriculture and protected agriculture, division of labor and cooperation in the industrial chain. The adaptability of company + farmer pattern will be discussed to sum up a patterns that contributes to the avoidance of market and technical risks and the popularization of technologies.
1. Source of seed and breeding
We can see from the project design that, in order to improve the agricultural current situation of Heilongjiang, the development idea of improving the production efficiency and the market competitive power radically has been proposed whether in planting or stockbreeding.
Planting: for soybean, potato, vegetable seedlings and forest seedlings, some are directly run by seed companies, some are indirectly driven by hi-tech enterprises (peptide in Bin County). Stockbreeding: some are radiated by hi-tech breeding companies (Daqing Tianfeng, Sanyuan boar, Hulan antibody-free milk), some are supported by dairy product enterprises for breeding and improvement. From farmers’ feedback, we can see such projects based on fine varieties and fine-breed livestock are the most beneficial to farmers and the most welcome by them.
As for the seed production, the key is a company’s technical competitive power. For this purpose, a company has to develop improved varieties, promote the technical maturation and reduce costs to avoid market risks.
Under the company + farmer pattern, the key to the success of such projects is the guarantee to farmers’ participation of the seed quality assurance process, which is also an effective avoidance of technical risks in breeding. This requires a company to provide farmers with technical guidance based on technical support units and strictly control the production process and clearly define quality responsibilities. This can be done by giving play to the advantages of associations, major families, other grassroots organs in production coordination, publicity, dispute settlement, hand-to-hand coaching and supervision. For example, the original seed production of soybean, potato, etc requires a large planting area objectively. On the technical links of embryo transplantation and artificial fertilization, technicians and major families will be replied upon to achieve the best effect.
45 2. Planting and stockbreeding
Planting and stockbreeding show different degrees of adaptation to the market: the planting industry features relatively shorter production cycle, less investment and higher flexibility, the stockbreeding features longer production cycle, complex production links, higher investment and weaker adaptation to the market. Under the traditional decentralized operation, farmers, short of information, can hardly master the market trend and are blind to what to plant; when the milk price falls, they are at a loss and often sell their cows reluctantly. The introduction of the company + farmers pattern aims that the enterprise is relatively accurate and foreseeable in mastering the market trend and may arrange the production according to market conditions and reduce farmers’ market risks.
To better avoid market risks, for the planting industry, an enterprise should make a forecast and production plan timely according to the market situation in the last year. If it’s necessary to reduce the scale, it must notify this to farmers and raise beneficiary suggestions to change varieties to farmers. For stockbreeding, since the investment in fixed assets is very large, the enterprise shall try to draw a risk fund from both parties’ profit at a certain proportion; it shall also set out its procurement plan according to the market demand and when necessary, notify milk operators to compress the output (by changing the forage mix ratio), so that farmers can reduce losses by reducing costs and will not sell their cows due to a too big contrast. The key is that farmers and the company must reach a common understanding that they are an interest community, especially the company cannot transfer any crisis blindly in case of a risk, which might prejudice its credit and its long-run development.
3. Primary products and high-end products
In the soybean peptide and milk peptide projects, primary products are bought form farmers and processed with hi-tech into high added value light industry products. For such enterprises, technical competition will be primary; only by improving the technology and reducing costs can they effectively avoid technical risks. Owing to the high added value, fluctuations in the market of primary products, will not affect their benefits greatly. It is suggested to apply the protective price when the milk price falls to maintain farmers’ production activity. However, the market risk for enterprises lies in the limited market receptivity. Enterprises are suggested to develop products of different levels of adaptation using their processing capability, so as to effectively reduce market risks.
4. Conventional agriculture and protected agriculture
The significance of protected agriculture is to change the time, spatial and variety distribution of farm products with technologies, and reduce production costs, give play to the scale benefit and promote the sustainable agricultural growth in conjunction with the integrated utilization of resources and energies. It can be said to be directly aimed at market and technical risks in agricultural production and guarantee the leadership of agriculture with its own mobility and
46 hi-tech. Compared to traditional agriculture: the former is the base and main body, the latter is an improvement and beneficial supplement; in market competition, they have their respective spaces. Products of protected agriculture are used to fill up time, spatial, variety distribution gaps of conventional farm products, but the investment is not affordable by ordinary farmers. On this basis, the company + farmer pattern in protected agriculture is mainly embodied in that farmers work at the base as agricultural workers, plant refined rare varieties provided by the company pursuant to the production specifications that meet the market requirements, or when they have certain funds and techniques, lease production facilities for self-production. Whichever mode is adopted, the seedling and market should be offered by the company. The greatest advantage of protected agriculture is the planned-ness and adaptability of production, which is very demanding for the enterprise’s information and logistic capabilities. In process of participation, farmers have learnt advanced production techniques and management skills. The direct influence of industrialized operation is very beneficial to changing their business philosophy. In the form of agricultural factory, protected agriculture can allocate manpower, financial resources and material resources more flexibly and provide more opportunities for farmers to change their present situation.
5. Division of labor and collaboration in industrial chain
The industrial chain represented by the cow industry is the most complete and typical: it can effectively integrate planting, breeder breeding, cultivation, forage, fertilizer, dairy industry, epidemic prevention and high-end product sectors. Like the biological chain in nature, from lower levels to higher levels, the number decreases and the energy consumption increases; the longer the chain is, the more replaceable branch links are. Even if one or more links meet with a problem, the whole chain will have the space of adjustment. Similarly, in a same industrial chain, all links are in a coexistent and cooperative relationship. As the opening of this chain, farmers are disadvantaged in possession of funds, techniques and information, but they are the foundation of the whole chain. Once their activity is frustrated, there will be inestimable losses to the whole industry. The deeper significant of the company + farmer pattern from a human-cultural perspective lies in the collaboration of different production links and offering of channels of understanding and communication.
II. Discussion of other organizations involved in company + farmer
1. Government’s functions:
1) Make publicity for and provide guarantee to powerful enterprises using its authority among the public, to promote the successful execution of company + farmer.
2) Provide policy support to enterprises, support farmers with special difficulties, give greater spaces of development to enterprises and farmers.
3) Coordinate the cooperative relationship of company + farmer, arbitrate disputes, particularly protect farmers’ legal interests, such as setting up a report hotline.
4) Promote the alliance among industries.
47 5) Conduct macro-control over key industries using the financial lever.
6) Bridges enterprises with domestic and international markets and organize experts to conduct industrial strategic development studies.
1. Technical support units:
1) Realize the sharing of interests and risks with enterprises by means of share-holding with technology, inject the most direct impetus into technological popularization.
2) Apply a competitive job mechanism, apply quantitative indices to the performance of technician.
2. Major families:
1) Play the demonstrative role to guide and supervise the production program.
2) Solve specific problems in the technical and purchasing links as service stations and agents under the company.
3) Promote the communication between enterprises and farmers, coordinate relations of production, give counsel to the market development and the improvement of the mode of cooperation with farmers.
4) Organize an association if conditions permit.
3. Association
Driven by major families or service sectors that connect production links, such as farm machinery company, milking service center, with a relatively neutral standing, also play the role of production coordination.
48 Chapter 4 Attitudes of Provincial Project Officials towards Project
For the first time of undertaking a World Bank project, the provincial project office has used the World Bank’s procedure as a reference for its managerial approach. In project selection, it has given first priority to farmers. Secondly, the project is very comprehensive. The previous focus was the renovation of low/medium-yield farmland, enhancing the capital construction of farmland and guaranteeing the grain security of the state. Now, in the new era, the project is well combined with the agricultural industrialization and restructuring to support leading enterprises, construct bases and improve the technological level, which is a very important matter now. For example, the inter-row soybean film covering technique (maximum per mu yield 230km, average per mu yield 200km, including Hailun and Bin County) has been put into advantaged professional production and an industrial belt has emerged. The competition of soybean is focused on price, quality, output and production cost. In the project selection process, the criteria included development potential, suitability to local layout and the ability to realize the agro-tech popularization. The World Bank project has introduced funds and an advanced management style.
Suggestions of the provincial project officials for popularization of the project: 1) to introduce an insurance mechanism. For industries in which affected families invest heavily, a guarantee shall be given to farmers: pig (Fuyu County) and cow. The government shall contact with the insurance company and act as the guarantor to ensure farmers can benefit from the project in the specified range of benefits. 2) Support typical and major families to drive minor families. Farmers would invest only when they have seen others had an effect, which is an adaptation process. 3) In the project design and preparation stages, the government shall play a leading role and exit in the project operation process. The government will undertake the service and project management function.
Chapter 5 Attitudes of SA Team towards Project
The SA Team thinks the project selection in Heilongjiang is very pertinent on the ground of a clear and deep perception of the advantages and disadvantages of the province’s agricultural development. The government’s macroeconomic control and strategic study of this region’s industrial development should also be established on this basis. With focus on soybean, cow, potato and other advantageous industries, take full advantage of the existing resources and industrial advantages and focus on the most difficult problems in the industrialization process to enlarge and strengthen the industrial chain. Most project undertaking companies have solid strength, rich experiences in market operations and enterprise management. As the dominant role under the company + farmer pattern, they have developed many industrial operation and technological popularization modes that fit their respective industrial characteristics and local conditions, providing a lot of beneficial ideas to us. Meanwhile, in the project design, in the light of the World Bank’s spirit, practical solutions have been exerted to address the practical
49 difficulties of disadvantaged groups in development. The interview with farmers is the very focus of our investigation. Some expansion projects have shown their superiority in existing company + farmer experiences, such as the driving action of Dongjin agriculture for poverty relief and the radiating action of Sanyuan boar. Fine variety breeding and breed improvement have been specially favored. It could be seen that farmers’ activity for participation is very high, both enterprises and the government should not let down such trust.
In sum, we propose the following suggestions:
Firstly, companies should build up the sense of quality for survival and technology as the first driving force and radiate such sense to farmers through productive cooperation.
Secondly, build a good faith in cooperation. Whether for farmers, enterprise, the government or technical support units, establishing a good market environment is the precondition to the long-run development. When the environment is polluted, all will suffer.
Thirdly, though the government has taken a second seat, it is still concerned with the practical interest of farmers. It is suggested to open a dedicated channel to listen to the public’s voice, promote the communication and the improvement of the enterprise. Only by maintaining the relative balance between farmers and the enterprise can we ensure the healthy development of the company + farmer pattern. On this sense, the government, the enterprise and farmers share common interests radically.
Fourthly, pay attention to the lateral and longitudinal unification between different industries and regions. We should not settle on the division of sphere of influence, but should develop constructive cooperation and organize a combined fleet to develop the global market.
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