Co-ops fattening farmer's wallets
By Qin Jize (China Daily)
Updated: 2004-07-08 02:06

The watermelon growers in Wenling City in East China's Zhejiang Province are expected to sell record numbers of watermelons this year, thanks to the successful operation of a new melon co-operative.

The co-operative, consisting of 129 farmers, has developed eight production bases in four provinces and established more than 50 wholesale networks across the country.

Last year, the group's sales income reached 57.34 million yuan (US$7 million).

This is a very successful example of how a specialized economic co-operative can become a key to increasing money in the pocketbooks of Chinese farmers.

Zhu Peikang, vice-chairman of the Central Committee of Revolutionary Committee of the Chinese Kuomingtang, said the development of agricultural co-operatives is seen as a step toward transforming Chinese farming. They allow agricultural products to compete on a more market-based footing.

Zhu made the point at the ongoing sixth Standing Committee meeting of the 10th Chinese People's Political Consultative Conference (CPPCC) National Committee.

The farmers' co-operative, also known as industry association or stock co-operative enterprise, evolved on the basis of the rural system of family farm starting in the 1980s.

To pursue bigger profits, farmers who grow similar crops form a co-operative to work together by jointly purchasing, producing and marketing their goods.

To join or to leave the co-operative is completely one's own decision, and the farmers' ownership rights of his or her assets are affected since they hold shares in the overall operation based upon what they've put in.

Zhu, also a senior engineer, came to his conclusions after conducting a recent survey on farmers specialized economic co-operatives in East China's Zhejiang Province.

"More and more farmers have benefited a lot from the successful operations of various farmers' specialized economic co-operatives," he said.

Another example is a fruit and vegetable co-operative in Shaoxing City in Zhejiang Province. Its membership grew to 4,662 people, while land growing crops reached a stunning 57,450 mu (3838 hectares).

The co-operative, involving Zhejiang Province and Northeast China's Heilongjiang Province, grew to enjoy an income of 15.06 million yuan(US$1.8 million).

The fact that small-scale farmers, who occupy 70 per cent of the country's agricultural population, have faced many bottle necks as they and the government have sought to increase farmers' income.

Alone, they must toil with all their might to bring their land to productivity without having the individual knowledge or the opportunity to sell their product at a favourable price.

The co-operative, however, guided with the latest ideas, encourages farmers to work together and with the benefit of connections to scientific institutes to apply the technological results in daily production.

It helps farmers realize the best use of theirs and their neighbours' labour along with the concept of market trading, thus helping them to create a competitive crop base with good returns.

National and local agricultural authorities earlier this year said that they are willing to found pilot co-operatives to promote the idea to farmers nationwide.

Co-operatives will have access to get support from central financial authorities, an ambiguous phrase that could raise the eyebrows of many farmers, Xinhua reported.

According to Zhu, problems with the legal position of the co-operative have stood out and hampered their development.

Due to the lack of the concept of "legal person of the co-operative," the farmers specialized economic co-operative are not qualified to enjoy tax exemptions.

He said the Standing Committee of the National People's Congress has started to legalize farmers specialized economic co-operatives and this will greatly help the healthy development of such entities.

Co-operatives have become very popular farming and economic devices in western countries, officials noted.

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