Taking the countryside: why agribusiness may reap profits and problems for China – Geoff Dyer

From Financial Times:

…… As a result, the introduction of industrial agriculture raises difficult questions about the status of land ownership in rural China. This has become an explosive issue in recent years as property has been seized to make way for factories and apartments. If farmers are bullied off their land to make way for larger operations, the advance of agribusiness could add to already simmering social tensions and accelerate migration to the fast-growing cities.

The dilemma goes back to the early days of economic reform in China in the late 1970s. One of Deng Xiaoping’s first decisions was to break up the system of communal farms and distribute land on an equal basis to rural families. Residents did not gain ownership of the land but typically received a 30-year lease from their village.

The initial results were spectacular. Not only did farm incomes rise quickly but China avoided some of the problems of landless rural workers that have afflicted many developing countries undergoing industrialisation. However, the new land system also had considerable limitations. It left China with millions of tiny, inefficient producers – there are around 200m household farms with an average size of 1.5 acres, which cannot be sold. While incomes in the coastal cities soared in the 1990s, rural incomes rose much more slowly, in part because of the low output per worker on Chinese farms.

This creaking rural system stands in contrast to China’s fast-growing modern retail network. Supermarkets and hypermarkets are multiplying rapidly as new middle-class consumers look for higher-quality food and more comfortable surroundings. There are now 16,000 supermarkets and hypermarkets, including both foreign and domestic operators, as well as large restaurant chains – KFC has around 2,000 outlets in China and McDonald’s some 800. [Full Text]

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