Poor region explores collaborative business model to fight impoverishment

By Chen Qingqing in Liupanshui Source:Global Times Published: 2017/3/6 19:08:39

Path out of poverty

The fight against poverty has been one of the hottest topics at the ongoing two sessions of 2017, the major annual political event that takes place this week. In 2016, the rural population living under the poverty line declined by 12.4 million people as the central government put 100 billion yuan ($14.49 billion) into poverty alleviation, according to the government work report delivered on Sunday by Premier Li Keqiang at the opening of the annual session of the National People's Congress (NPC). The government vowed to continue to tackle poverty in 2017 by reducing the impoverished population by 10 million. The Global Times recently traveled to one of the poorest regions in the country, Southwest China's Guizhou Province, to look into how local authorities, companies and villagers are working together to fight poverty.

Villagers feed cattle on a farm in Yanjiao in Southwest China's Guizhou Province. Photo: Chen Qingqing/GT

On the way to Miluo village, southeast of Liupanshui, Southwest China's Guizhou Province, hundreds and thousands of trellises have been built to grow kiwis, one of the new industries to emerge in the region.

"During the summer, they will be covered with kiwi leaves, which make for beautiful scenery here," said Li Ruming, a 47-year-old villager who works for a local agriculture company in Miluo.

Three years ago, he lived below the poverty line. He owned a bit of arable land and had to go out to do odd jobs from time to time. "Now, things are totally different, I work as a manager on this kiwi farm and earn 3,000 yuan ($435.22) a month," Li told the Global Times on Wednesday.

3,000 yuan a month is considered a high salary in rural areas in the province, where the average annual income for rural residents was 8,090 yuan in 2016, the local news website gywb.cn reported in February.

Like Li, many people in the province have been struggling in poverty for generations, as the vulnerability of the karst environment has weighed on the region's development.

In 2015, 4.93 million people in the province lived below the poverty line, the most in the country, local news site gzdsw.com reported in October 2016.

Introducing industries like kiwi growing is part of the local government's strategy to lift people out of poverty. The strategy goes under the name of the "three transformations." Since 2014, local authorities in Liupanshui have been working to turn natural resources into assets, money into capital and villagers into shareholders by introducing collaborative business models, according to a document the local government provided to the Global Times on Wednesday.

Villagers can transfer their land to a collaborative corporation that they have a stake in. To motivate the villagers, the company contracts part of the business to them and distribute dividends at the year-end.

For example, in a village where a tea farming company has invested, local villagers who transfer their land to the company can work there and earn a monthly salary. Sometimes, they can earn dividends if the company institutes a performance-linked incentive program.

In Guizhou, there is 1.61 million mu (107,333 hectares) of contracted arable land and about 410,000 mu of collective land transferred into 29 agricultural projects, covering 1.6 million villagers, of which about 400,000 live in poverty, the document said.

Earning dividends

In Yanjiao county of Liuzhi, a special district of Liupanshui, rural people can become shareholders of a collective project in a village without transferring their land. 

A 44-year-old villager surnamed Liu said he used to be a butcher to support his family with three children. At that time, he also grew corn on his 5-mu plot of arable land, but he earned little.

"I received 10 calves in 2016 from a company investing in our village, and things are getting better now," he told the Global Times on February 28.

In the backyard of this house, a cow was ready to give birth.

"She [the cow] could bring me fortune," Liu said.

The company, Jiayao, which has been operating in the county since 2014, has distributed 648 calves to 308 households in October 2016, and signed three-year contracts with villagers.

"For example, if one calf is priced at 10,000 yuan in the market, we pay villagers 600 yuan to raise it for the first year, when the calf is reared into adulthood," Wu Yongsheng, the company's general manager, told the Global Times on February 28. "After it's sold at the market, we pay the villager more dividends."

As of the end of 2016, 30,169 people were lifted out of the poverty in this district thanks to the "three-transformations" policy, according to the local government.

Total investment in related agriculture projects amounted to 1.5 billion yuan, covering 498,000 rural people, including 83,200 living below the poverty line.

Who can participate

Villagers who have become shareholders of local agriculture projects now have stable incomes.

In Niujiao village, which is about a half-hour drive from Liuzhi district, 39-year-old villager Meng Bixiong transferred his 4-mu plot to a cherry orchard run by a company called Tianbao, which now pays him around 3,000 yuan a month.

Before he joined the project, Meng said he grew corn and worked occasionally as a truck driver, but it was not a stable income.

Although the "three-transformation" plan can lift villagers out of poverty, it still requires the villagers to work hard for a better life. In some projects, the number of people living below the poverty line accounted for a small proportion of participants.

The provincial government set the poverty line at an annual net income of 2,300 yuan in 2016, roughly 6.30 yuan per day.

For instance, in a collective rural tourism project on the outskirts of Liupanshui, most of the 1,700 villagers who became shareholders were not living in poverty.

"When we distributed calves to 308 households, only 21 were below the poverty line," Wu said, noting that the situation reflects a problem in doing poverty alleviation work in rural areas.

The reason why few poor people participate in these projects is the same reason why they are poor, the general manager said.

"It's simply because they are lazy," he said, noting that he wasn't referring to the elderly and the disabled.

Because villagers have access to more information these days, they have higher wage requirements, Wu explained. For example, a villager might ask for a wage of 100 yuan a day to work on a farm - the same amount as a construction worker in a first-tier city. 

"Rising labor costs also weigh on some rural projects," he said.



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