China’s agricultural landscape can be summed up fairly simply: it has too little arable land, divided into too many tiny plots, tended by too many farmers, who are mostly too old. And much of the soil is contaminated.
Four-fifths of the nation’s farmland is divided up into plots of less than 3.3 hectares (8.2 acres) and most of those are even smaller—less than the size of a football field. These patches of earth are used mainly to grow cereals like rice and wheat on soil that farmers soak with government-subsidized chemicals to boost yields and keep state grain silos full.
To meet the ballooning demand from China’s newly wealthy middle class for a greater variety of foods such as meat, fruit and vegetables, China needs bigger, more efficient and safer farms. But that poses a huge dilemma for the state: if it allows all these little plots to be consolidated, it could put millions of rural workers out of a job.
Almost half the country’s population still lives in the countryside, said Hu Bingchuan, a researcher at the Rural Development Institute of the Chinese Academy of Social Sciences in Beijing. “If they can’t find jobs in the cities, it would create social unrest. Modern farms and small traditional household farming will co-exist for some time.”
China has taken steps to try to expand average farm size. Farmers can’t own land in China, but are allocated plots by a local collective, often on decades-long leases. In December, the government allowed the collectives to bundle together land rights and lease out bigger tracts to companies, who pay an annual rent.
It’s not aiming to create lots of mega-farms such as those found in the U.S., Canada or Australia, but by merging a few small plots, farmers can have enough land to efficiently use machinery and new technology. The Chinese government defines a “proper sized” family farm as around 7 to 13 hectares.
That presents a challenge for a new breed of farming entrepreneurs, who are leasing land or finding small spaces in cities to capitalize on the rising demand for untainted and varied produce.
“Many people are getting rich and they want safe farm products,” said Li Xiaojun, 42, who studied telecommunications at Zhejiang University, but decided to start rearing chickens because of concern about the quality of shop-bought meat.
Li leased about 7 hectares of land a decade ago to produce birds for his family and friends. But his chickens were so popular that he kept expanding and now has 666 hectares of free-range fowl that he sells direct to families as far away as Hangzhou, 100 kilometers from his farm. His chickens cost as much as four times the price of normal supermarket birds.
Food safety is the driving issue for most farming entrepreneurs in China. The nation’s first national pollution-source survey in 2010 showed that it was agriculture, not industry, that was the main cause of surface water pollution, according to a World Bank report.
Chinese consumers have been battered by a decade of food scandals that prompted many wealthier Chinese to favor foreign brands or small local and organic farms. They also want more exotic food and fresh fruit and vegetables throughout the year.
That presented an opportunity for Chen Jianming, a former auto-factory worker in Shaanxi province. Chen, 49, and his wife leased half a hectare to grow strawberries in greenhouses. The couple use imported fertilizer and plant seeds in August so the fruit is available in the winter.
“We don’t spread pesticides, and people love our strawberries,” said Chen, who charged about $10 a kilo during the Lunar New Year in February, with local residents harvesting the fruit themselves.
Such individual efforts are helping to redress the food imbalance in China and may slow the pace of rising imports. But for most crops and livestock China needs much bigger farms that can get the best out of its limited arable space.
That’s not easy. Even without the concerns over rural unemployment, the nation’s arable land varies widely, from small pockets of terraced rice in the mountains of Guangxi and Yunnan in the south and west, to the grain-producing black-earth belt of Dongbei in the northeast. Water in large parts of the north is scarce and often polluted by industries such as coal mining.
Much of the rich alluvial plains along the coast has been gobbled up by three decades of urbanization.
To solve the problem, the government is trying to move water from the south to the north through a massive network of dams and canals. It is clamping down on the loss of farmland to cities. And it is helping fund model large-scale farms that can test new techniques and systems for crops and livestock.
One of those farms is in Yantai, in Shandong Province, on a peninsula of land famous for its vineyards that juts into the Yellow Sea. Operated by Penglai Hesheng Agricultural Technology Development Co., it is huge by Chinese standards. The company leased 70,000 hectares and employs 400 workers. The project includes a food processing unit, a stud farm and a vineyard that produces 80,000 bottles a year.
Hesheng grows apples, strawberries, cherries, cucumbers and tomatoes using an automated irrigation system, and rears local breeds of pigs and goats without the use of antibiotics or hormones. It has a seed farm, a herd of spotted deer and 10 reservoirs full of fish.
The showcase project is one of three large organic farms funded by the Agricultural Development Bank of China, which provided $500,000 in finance, according to Hesheng's General Manager, Ma Xiuqing.
“While other farmers are doing only one product, we are doing comprehensive farming, covering agriculture, forests, fishery and animal husbandry,” Ma said. “Our ecological farming attracts lots of people to come and visit this place and becomes a model for others.”
The fastest-growing part of Hesheng’s business is making organic fertilizer.
The company hopes to lure more private enterprise down on the farm. More than a third of rural households have now transferred their land to be leased out under the new rules, Qu Dongyu, vice minister of agriculture, told a conference on April 20.
In parts of central and western provinces the transfers are as much a result of demographics as agricultural efficiency. Three decades of migration to the cities to find work left much of the land to be tended by old farmers, whose children are often unwilling to return and take over the farm.
A study in 2015 in Jiangsu province found that the average age of the main agricultural labor force was almost 57. If entrepreneurs don’t move in to take over production, China may lose even more arable land as it becomes abandoned.
“Many farmers quit their villages to work in cities and left behind elders and children who are unable to do the farming,” said Hu at the Rural Development Institute. “Some villages are empty.”
To contact Bloomberg News staff for this story: Shuping Niu in Beijing at [email protected]
To contact the editor responsible for this story: Adam Majendie at [email protected], Phoebe Sedgman
©2017 Bloomberg L.P.