A Study on Jiangxi Rural Development Strategy

ADB Technical Assistance Project TA 7036-PRC Package 2: Jiangxi Development Strategy

Jiangxi Rural Development Strategy Project Consulting Team Team leader: Wu Guobao

© 2010 Asian Development Bank All rights reserved. Published 2010. Printed in the People's Republic of China

The views expressed in this book are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank or its Board of Governors or the governments they represent. The Asian Development Bank does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. Use of the term “country” does not imply any judgment by the authors or the Asian Development Bank as to the legal or other status of any territorial entity.

Contents Acknowledgements .................................................................................. v Contributors ............................................................................................. vi Abbreviations ..........................................................................................viii Executive Summary .................................................................................. 1 I. Introduction .......................................................................................... 15 1. Context of the Study .......................................................................... 15 2. Objectives and Scope of the Study .................................................... 20 3. Approaches and Methodologies......................................................... 20 II. Current Status of Rural Development in Jiangxi .............................. 23 1. Current Status of Rural Economic Development in Jiangxi ................ 23 2. Rural Physical Infrastructure and Village Renovation ........................ 55 3. The Status Quo of the Rural Public Service System .......................... 61 4. The Status Quo of Grassroots Organizations ..................................... 69 5. Current Situations of Environmental Protection in Rural Jiangxi ........ 84 6. Overall Assessment of the Rural Development in Jiangxi .................. 93 III. Comparative Advantages and Disadvantage Facing to the Rural Economic Development in Jiangxi ...................................................... 119 1. Locational Conditions and Macro Economic Environments.............. 119 2. Comparative Advantages, Constraints and Potentials...................... 129 IV. Strategies Proposed for Rural Development in Jiangxi Province 153 1. Overall Strategic Goals for Rural Development in Jiangxi by 2020 .. 153 2. Strategy for Income Growth of Rural Residents in Jiangxi ............... 154 3. Strategy for Rural Industries Development in Jiangxi ....................... 160 4. Strategy for Rural Public Services Development .............................. 165 5. Strategy for Rural Environment Protection ....................................... 165 6. Strategy for Rural Governance ........................................................ 165 V. Recommendations ............................................................................ 167 1. Organizational Innovations .............................................................. 167 2. Institutional Innovation and Improvement ........................................ 169 3. Financing Innovations...................................................................... 171 4. Institutional Innovations Required for Scientific and Technological Supports .............................................................................................. 173 5. Infrastructure Construction and Management .................................. 174 6. Policy Suggestions .......................................................................... 174

Appendix: International Experiences for Jiangxi Rural Development Strategy ................................................................................................. 183 1. Land Tenure Policies for Optimising Agricultural Production ............ 183 2. Processing and Logistics of Agricultural Products ............................ 193 3. Financial Services to Agriculture ...................................................... 195 4. Quality and Safety of Agricultural and Food Products ...................... 197 5. Promotion of Quality and High Value-added Products ..................... 208 6. Towards A Comprehensive Approach to Rural Development Planning ............................................................................................................ 211 7. Enhancing the Capacity and Efficiency of R&D, Extension and Information Services ............................................................................ 218 8. Enhancing Public Participation ........................................................ 221 9. Farmer Cooperatives ....................................................................... 231 References ............................................................................................ 239

Acknowledgements Jiangxi Rural Development Strategy is one of the two packages in ADB TA 7036-PRC: Provincial Development Strategies for Selected Provinces in the Central Region. It is financed by the Asian Development Bank (ADB). The consulting firm, Rural Development Institute at the Chinese Academy of Social Sciences, formed a team composed of national and international experts to implement the project. Per request of Jiangxi provincial government, the Jiangxi development strategy study focused on the research of rural development in the context of rural-urban coordinated development. The team has made comprehensive and in-depth analysis on the comparative advantages and disadvantages, potentials and constraints for rural development in Jiangxi based on the overall and 10 subject studies. The 10 subject studies are: (i) rural industries development; (ii) agricultural product standard and safety; (iii) rural land property right reform; (iv) rural infrastructure development; (v) rural logistics development, (vi) rural environment and ecology; (vii) rural public services; (viii) rural grassroots governance and organizational reforms; (ix) rural vocational training; and (x) institutional innovation and reforms. Overall and sector specific strategic goals and approaches are proposed for the rural development in Jiangxi Province by 2020. The team has also made recommendations on the required institutional innovations and policy changes to guarantee and support the realization of the proposed strategies for rural development. The TA was incepted in Nanchang, the capital city of Jiangxi Province in November 2008. Senior officers from Jiangxi provincial government, the Department of International Cooperation at the Ministry of Finance, Jiangxi provincial Department of Finance, and ADB PRC Resident Mission, have been keeping concerns about and providing guidance and advice for the TA implementation. The concerned government departments at provincial, prefecture and county level in Jiangxi Province provided helpful advice and assistance in the process of consultations and field visits. Participants who attended the Inception Workshop, Mid-Term Report Review Workshop and Final Report Review Workshop made important contributions to the preparation and revision of the main report and sub-reports. The consulting team would like to extend sincere thanks to al of them for their strong supports and valuable contributions.

Team leader: WU Guobao

Contributors Asian Development Bank Kanokpan Lao-Araya Economist ZHUANG Jian Senior Economics Officer GAN Mei Assistant Project Analyst TA Project Executive Agency MAO Zuxun Director of the TA Project Management Office, Deputy Director General, Jiangxi Department of Finance ZHANG Sheng

Project officer, Division Department of Finance

director,

Jiangxi

FANG Hua

Project officer, Division Department of Finance

director,

Jiangxi

ZENG Wenquan

Project officer, Division Department of Finance

director,

Jiangxi

SU Changping

Project officer Deputy division director, Jiangxi Department of Finance

TA Consulting Team WU Guobao

Team leader, professor of Rural Development Institute, Chinese Academy of Social Sciences

LI Zhou

Environmental protection specialist, deputy director and professor, Rural Development Institute, Chinese Academy of Social Sciences

DU Zhixiong,

Rural industry development specialist, professor of Rural Development Institute, Chinese Academy of Social Sciences

JIANG Jingfa

Rural governance and public service specialist, vice president and professor of Jiangxi University of Finance and Economics

MO Rong

Rural vocational training specialist, Deputy Director and professor of Institute for Labor vi

Sciences, Ministry of Human Resources and Social Protection CHEN Yunjuan

Rural logistics expert, professor of Nanchang University

ZHANG Liguo

Agricultural standard and safety specialist, professor of Jiangxi University of Finance and Economics

YANG Feng

Rural land property expert, professor of Jiangxi University of Finance and Economics

LUO Xiandong

Rural infrastructure expert, associate professor of the Center for Finance Studies at Jiangxi Department of Finance

Sylvie Dideron

International expert for rural industry development

Tim Zachernuk

International expert for rural governance

Independent Experts SU Ming

LI Wanping

Independent Finance and Taxation Expert, Deputy Director and Professor of the Institute for Finance Science, Ministry of Finance Independent Finance and Taxation Expert, Professor of the Center for Finance Studies at Jiangxi Department of Finance

vii

Abbreviations ADB AOC APL CCP CCPC CNY COD EDI EU FAO FSWOS GAP GDP GI GIS GPS ICA ISO NBS NCCP NGO NRCMS OECD PLEEZP POS PRC RCC RDI R&D TA TVE VC

Asian Development Bank Automatic Operations Control Agricultural product logistics Chinese Communist Party Chinese Communist Party Committee Yuan, PRC currency unit Chemical Oxygen Demand Electronic Data Interchange European Union Food and Agricultural Organization Full scale well-off society Good Agricultural Practices Gross Domestic Product Global Illumination Geographic Information System Global Positioning System International Cooperative Association International Organization for Standards National Bureau of Statistics of China New countryside construction program Non-government Organization New Type of Rural Cooperative Medical System Organization for Economic Cooperation and Development Poyang Lake Ecological Economic Zone Planning Point of sale People’s Republic of China Rural Credit Cooperative Rural Development Institute, Chinese Academy of Social Sciences Research and Development Technical assistance Township and village enterprise Vertical coordination

viii

Executive Summary I.

Goals and Approaches of the Study The Jiangxi Rural Development Strategy Study is one of the two packages under ADB TA 7036-PRC: Provincial Development Strategies for Selected Provinces in the Central Region. It is an attempt to assist provincial governments to develop the provincial rural development strategy in the framework of the new countryside concept. The TA study aims to help with promoting the new socialist countryside construction and faster the development of the central regions, in particular in Jiangxi province. The objectives of the study are to assist in formulating development strategies for rural areas of Jiangxi in line with the national policies on rural development and reform, and with the long-term development plan of Jiangxi Province to achieve inclusive, sustainable, balanced and pro-poor socio-economic development in the rural areas. The approaches adopted to study Jiangxi rural development strategy are integrated or multidimensional, multi-sectorial, multidisciplinary approach; open, rural-urban linkage approach; historic and dynamic approach; and participatory and stakeholders-centered approach. II.

Regional Location Conditions and Macro Environments Location. Jiangxi Province has a unique regional location. Three out of four national economic zones and two out of six national reform experimental zones are around Jiangxi. Therefore, Jiangxi is able to share the economic benefits and experiences of reform experiments through geographically and culturally closed linkages and trickle down effect. Urbanization. Although Jiangxi has made large progress in urbanization since 1978, its urbanization rate in 2008 was still 4.32 percentage points lower than national average. Without the supports from the urbanization in other regions, Jiangxi needs to increase its urbanization rate from 39.8% now to 55.45% to sustain its recent income generation and employment. Accelerating the urbanization, therefore, is an important prerequisite for achieving the goals for rural development in Jiangxi in the coming decade. Local Fiscal Capacity. The total fiscal revenue of Jiangxi province has risen 16% annually from 1994 to 2008, which was much higher than the GDP growth rate during the same period in Jiangxi. But its per capita budgetary revenue in 2008 was only equivalent to 43.2% of the national average, lower than all central provinces except for Anhui. Therefore, it is difficult for Jiangxi local finance to provide sufficient supports for the rural development in the province even if the proportion of fiscal expenditure on agriculture and rural areas can be raised. Financing. The supports from financing on agriculture and rural development in Jiangxi have been improved since 1996 by means of financial institutional reforms and innovation of financial products and 1

services. However, it is found that only 15.1% of the borrowed funds of farmers’ households in 2008 were provided by banks and credit cooperatives. The farmers had to seek financial support from informal financing channels. Term of trade. Jiangxi has had a lower foreign trade dependency rate compared with the provinces in coast regions. However, the low foreign trade dependency rate in Jiangxi may conceal the actual dependency of Jiangxi economies on domestic and foreign trade. In general, Jiangxi has been an economy based on primary products and services. In addition, the rural development in Jiangxi is also facing the opportunities and challenges generated by the transformation of national economic development pattern, aging of population, global climate change and science and technological innovations. III. Comparative Advantages and Disadvantages Facing to the Rural Economic Development in Jiangxi The comparative advantages of land resources Jiangxi has cultivated land areas of 2.17 million ha, accounted for 1.65% of the country. The location quotient of cultivated land in Jiangxi was 0.46, indicating the cultivated land resources in Jiangxi are of significantly comparative disadvantage in the country. The agricultural development in Jiangxi should control the land intensive products. But Jiangxi has location quotient of 1.68 and 2.64 in forestry land and inland water, therefore, very large comparative advantages in forestry and fishery development. Crop production The rice, rape seeds, sesame and citrus in Jiangxi has been of comparative advantages among the major agricultural products. In particular, the rice and citrus in Jiangxi had location quotient of 2.93 and 3.22 respectively in 2008. But the two largest crops in terms of sowing areas in Jiangxi, rice and rape seed were lower in land productivities than the national average. The yield per hectare of rice and rape seeds in Jiangxi in 2008 was 87.2% and 57.8% of the national average respectively. The major problems of crop planting development in Jiangxi are (i) agricultural production pattern of small scale, extensiveness and low efficiency, (ii) lacking division of labors and professional services for agricultural production, (iii) the cropping structure is not diversified, and (iv) low proportion of agricultural products being processed. Forestry development Jiangxi has had strong comparative advantages in forestry development. Except for that for forestry lands, Jiangxi has had also strong comparative advantages in timber, camellia seed, bamboo, turpentine, Tung oil seed and raw lacquer. In particular, the camellia seed in Jiangxi accounted for 19.33% of the national output, had an absolute advantage in the country. 2

The main constraints facing to forestry development in Jiangxi are (i) small scale, scatter and extensive forestry production, (ii) constraints for the transfer of forestry property, (iii) slow progress made in cooperative development in forestry, and (iv) no effective ways for addressing the financing of forestry development Livestock development Jiangxi has had no comparative advantages in livestock except for pigs. But relatively livestock in Jiangxi was a more mature industry. The major constrains facing to the livestock development in Jiangxi are: (i) the livestock dragon-head enterprises in Jiangxi have been weak in the economic linkage with farmers’ income generation; (ii) the insurance for livestock has been underdeveloped, which makes the development of livestock in Jiangxi unable to insist the natural and market shocks; and (iii) the capacities of processing and refrigeration for livestock products has been very limited in Jiangxi. Aquatic products development Jiangxi has strong comparative advantages in inland water resources and aquatic products. In particular, its fresh water aquatic products were of large comparative advantages in the country with location quotient of 2.5. The constraints in aquatic development are (i) low productivity; (ii) scatter regional distribution; (iii) no unified national brand for aquatic products has been developed; and (iv) only 13.5% of aquatic products in Jiangxi in 2007 had been processed. Safety of agricultural products The comparative advantages in the safety of agricultural products in Jiangxi are of abundant ecological resources and beautiful environment. Its disadvantages are in low safe production consciousness of farm households, no perfect market of agricultural products of safe quality, and unreasonable utilization of farm chemicals. Agricultural product logistics Jiangxi has advantageous resources and production bases for developing agricultural product logistics and developed a road transport network good for APL development. The major problems in modernizing the logistics for agricultural products are (i) disperse anticipators, small-scale, single function, low degree of organization; (ii) lack of coordination and integration mechanism; (iii) lack of driving force for investment on specialized assets of anticipators; (iv) absence of core enterprise as leaders in modern APL; and (v) inadequate supporting system. Vocational training Jiangxi province has already established a well functioned organizational framework and vocational training network. The major problems existing in vocational training are (i) unsatisfactory Implementation of Policies; (ii) insufficient funds allocating for the vocational training of 3

farmers; and (iii) no good linkage of the vocational training policies with the needs of farmers. IV. Rural Public Services, Environmental Protection and Governance Public Services. Jiangxi has made marked progress in improving the public services in rural areas since 2000 especially after the new countryside construction pilots initiated and expanded. But there exist some problems in the rural public service system in Jiangxi, including (i) blur responsibilities in the supply of rural public services; (ii) insufficient public resources allocated; (iii) irrational rural public service supply structure and decision-making mechanisms; and (iv) poor coordinated public resources. Environmental Protection. Jiangxi has a unique ecological advantage, including high air and water quality, higher proportion of the land covered by wetland and forestry. The major problems include overused chemical fertilizer, pollution in the irrigation water, contamination of livestock excretion, untreated domestic garbage and poor forestry quality Governance. Jiangxi has piloted some innovative ways for improving the rural governance in recent years, including development of villagers’ councils in around 40,000 rural communities during the process of new countryside construction since 2004 and pilot in cooperation with the ADB on exploring the effective partnership of government with civil organizations in the village development planning for poverty alleviation. These innovated experiments have accumulated valuable assets for the improvement in rural grassroots governance in Jiangxi in the future. The problems existed in public governance in rural Jiangxi are (i) government’s functions have not been fundamentally changed; (ii) "Townships finance supervised by county" and “Village finance supervised by townships” weakened the capacity of public administration of grass-roots government; (iii) no effective ways found for addressing the issues troubled township department reforms; (iv) weak and narrow participation of civil society organizations; and (v) public administration in rural areas has been not good for the play of villagers self-management capability. V.

Strategies Proposed for Rural Development in Jiangxi province 1. Overall strategic goals for rural development in Jiangxi by 2020 Based on the decided national and provincial long-term development strategies and plans in rural areas and the comparative advantages Jiangxi has in rural development, overall strategic goals for rural development in Jiangxi are to proposed as building rural Jiangxi into a prosperous and civilized green rural society of affluence, harmony, and full of vitality by 2020. Building an affluent rural Jiangxi is the central and fundamental strategic goal for Jiangxi rural development by 2020. The targets set for building an affluent rural Jiangxi are (i) the productive capacities for food and 4

other major agricultural products are improved largely; (ii) the per capita net income of rural residents in Jiangxi by 2020 will grow up to CNY10,000 or by more than one fold than that in 2008; and (iii) the income inequality among rural residents will be controlled and absolute rural poverty will be eradicated fundamentally. These targets will be elaborated and explained in the coming sections. Building a harmonious rural Jiangxi is to adopt inclusive and coordinated rural development approach. It compose of: (i) building up harmonious relation between urban and rural areas by equalizing the primary public services, (ii) building up harmonious relations among rural areas and rural residents by equalizing the access to primary public services and social security, and (iii) building up more mutually trustable relation between grassroots government and rural residents by transforming the grassroots governments and organizations into ones centered on supplying services needed. Building a civilized rural Jiangxi is to improve the grassroots democracy and governance by moving forward the grassroots democracy and autonomous administration, to establish healthy and lively rural society by increasing the quality of living of rural residents and developing rural cultural and sport undertakings, and to promote conservation culture by improving the living and ecological environment of rural residents. Building a green rural Jiangxi should be taken not only as one goal for the rural development in Jiangxi but also as a core value which will be adhered to through the whole process of rural development. The green rural development includes the adoption of environmentally friendly production and technologies and low-carbon lifestyle, and generation and maintenance of sustainable eco-system. Rural Jiangxi will be full of vitality socio-economically and politically as long as rural Jiangxi has been built into a prosperous and civilized green rural society of affluence and harmony. 2. Strategy for income growth of rural residents in Jiangxi Strategic goals set for income growth of rural residents in Jiangxi by 2020 are to establish the institutions and infrastructure necessary for sustained income growth of rural residents, to transform the ways for income growth, and to increase the per capita net income of rural residents to over CNY10,000, and to control the income gaps as well as to fundamentally eradicate rural absolute poverty. Priorities proposed to accomplish the targets set for income growth of rural residents in Jiangxi are to transform the ways for income generation, including: (i) transforming the low-efficiency ways for agricultural income generation to higher efficient ones; (ii) transforming the income growth in agriculture from mainly depending on the increase in the output to that with more dependence on the improvement in the quality and standards of agricultural products; (iii) transforming the income generation earned mainly 5

from raw agricultural production to that earned from both agricultural production and increased value added by extending the industry chain to include grading, package, transportation and processing of agricultural products; (iv) transforming the income generation of the rural migrants from mainly relying on unskilled and unprofessional employment to increasing the migrants’ income by improving their professional skills; (v) developing the small businesses in rural areas to make it become the third income growth point after agriculture and migration; and (vi) increasing the income of rural residents from land property owned by supporting the transfer of cultivated lands and forestry lands in Jiangxi. Expected change in income sources. It is forecasted the per capita net income of rural residents in Jiangxi will increase to CNY10,162 in 2008 price, among which 41.6% will be from agricultural income, off-farm business and migration will contribute 11% and 36% respectively, the income from property, direct transfer from government and social welfare together will contribute 7.3% of the total net income Based on the forecasted income change in rural Jiangxi by 2020, the shares in forestry and fishery and from property income and social welfare transfer will rise largely while those in crop production and livestock will decrease. 3. Overall strategy for rural industries development in Jiangxi The overall strategic goals are to largely increase the productive capacities of food and other agricultural products of importance for national food security and to steadily raise the income of rural residents in Jiangxi by improving the ways for rural industries development. Overall strategic approaches proposed for supporting rural industries development in Jiangxi are: (i) applying industry chain oriented rural industries development strategy to optimize the production, logistics and processing of the major agricultural products which are of comparative advantage in Jiangxi; (ii) adopting green agricultural development strategy to take better use of the eco-environmental advantage in Jiangxi and to generate value added from the production of safe agricultural products; (iii) adopting agricultural development strategy with better economy of scale and specialization by accelerating the development of farmers’ cooperatives and specialized commercial farms; (iv) undertaking brands based agricultural development strategy; and (v) adopting economically efficient agricultural development strategy. 4. Strategies for development of key rural industries Food industry The strategy proposed for food industry in Jiangxi by 2020 is to raise the quality and safety standards of food, to increase the output of grain to 25 million ton or increase by 18% more than that in 2008, and to largely improve the economical efficiency of food industry by application of applicable technologies and increasing the scale of food production. Edible oil industry 6

It is expected that the output of edible oil in Jiangxi will increase to 900,000 ton by 2020 or 3.5 times as high as that in 2008, by which the output value of edible oil industry in the province will grow up to CNY28 billion by 2020. The major strategic measures proposed to achieve the goals set for edible oil industry development are to develop high yield camellia seeds lands of 982,700 hectares, which will produce 558,700 ton camellia oil and generate output value of CNY25 billion, and to increase the productivity of rapeseed by application of new seeds and technologies and by increasing the specification and scale of production. Fruit and vegetable Jiangxi provincial government has formulated the Planning of High Quality Vegetable in the Poyang Lake Ecological and Economical Zone, by which the vegetable in Jiangxi province will generate CNY40 billion by 2020 and raise the per capita income of vegetable farmers by over CNY1,500. Citrus in Jiangxi is of absolute advantage in terms of the natural conditions and output in the country. It is suggested that top priority for citrus development in Jiangxi be given to increasing the quality and standardization of the products and to development of citrus processing by increasing the output of citrus suitable for processing and strengthening the R&D capacities. Forestry The 61% of Jiangxi lands is covered by forestry, which makes Jiangxi province one of the provinces with best living environment in the country. But the forestry in Jiangxi has not yet been transformed into economic asset and a large industry. The strategy proposed for forestry development in Jiangxi is to foster the development of forestry industry and to double the contribution of forestry industry to farmers’ income while efforts continue to be made on stabilizing and strengthening the function of forestry ecologic system. Proposed measures are: (i) transforming the priority of forestry production to increasing the quality of forestry and drawing attention to nurture of planted trees; (ii) transforming to the situation where a small part of farmers and enterprises are specialized at managing the forestry and all owners of the forestry land can benefit from the forestry development by transfer of contracted forestry land property and specification of forestry management, which will generate a win-win mechanism; (iii) transforming the scatter distribution of small forestry processing enterprises to relatively concentration of forestry processing; and (iv) transforming the forestry production and processing from traditional technology based status to higher technological levels by enhancing the R&D of forestry production and processing. Livestock Livestock has been the second largest sources of agricultural income in Jiangxi. Pig and waterfowl are two types of livestock of comparative 7

advantage in the country. In particular, the number of waterfowls, mainly ducks and gooses in Jiangxi stand on the top eight provinces. The strategic goals for livestock development in Jiangxi are recommended to steadily increase the supply of livestock products while attention is drawn to the improvement in the quality and safety standard of livestock products and to increase the contribution of livestock to income generation of farmers. It is suggested that efforts be made to improve the quality and safety of livestock products by enlarging the scale of livestock production and to facilitate the processing and refrigeration of livestock products. Aquatic products The aquatic product development in Jiangxi is of large potential in terms of the market share and inland fresh water resources. But it is also confronting with the challenge in water body pollution and low productivity. It is recommended that green and high efficiency aquatic product development system is established in Jiangxi to increase the competitive strength of the aquatic products and to double the share of aquatic product production income in the farmers’ income by 2020. Rural logistics The underdevelopment of rural logistics has been one bottleneck for the rural industries development in Jiangxi. Establishing a modern rural logistics system is the solution proposed to address the logistics constraint in rural Jiangxi. 5. Strategy for employment of rural labors in Jiangxi A new strategy for employment of rural labors is recommended to Jiangxi based on the change in labor market demand and the supply of labor resources. The priorities suggested for employment of rural labors in Jiangxi are to reduce the proportion of labors engaged in self-employment in subsistence agriculture and increase the share of labors in running businesses as well as to improve the stability and quality of migrated employment. In order to support the employment strategy, it is necessary to improve the vocational training provided for rural labors. Proposed strategy focus on establishing vocational training system opened for all rural labors, intensifying the roles of townships in organizing training and distribution training information, and developing vocational training models adapted to the context of Jiangxi. 6. Strategy for rural public services It is believed that the national strategic objectives set up for rural public service development by 2020 are applicable to Jiangxi. In order to achieve the objectives, main recommended measures are (i) enlarging the coverage of rural public services to improve the accessibility and availability of all rural residents; (ii) improving the quality of the rural public services stably; (iii) continuing the reform of the financial system below the provincial level with the guidance of the equalization of basic public services; (iv) establishing a 8

“bottom-up” and “top-down” combined mechanisms of decision-making and performance evaluation for the public services in rural areas in Jiangxi to improve the quality of public services; (v) strengthening the platform of rural community centers in providing rural public services by integrating the resources available for public service development; and (vi) setting up an effective supply system for the rural public services which is demand-oriented. 7. Strategy for rural environment protection The strategic objectives suggested for rural environment protection in Jiangxi by 2020 are: rural production and living pollution has been effectively curbed, production and living environment of the farmers significantly improved, ecological conditions in rural areas further optimized, the environmental supervision capacity of rural areas observably increased, the relationship between economic and social development and ecological and environmental protection more harmonious and become the country's leading green province. In order to realize the objectives, special programs should be formulated in the concerned areas. Special efforts should be made for the rural environment protection in Poyang Lake Ecological Economic Zone. 8. Strategy for rural governance The strategic objectives for rural governance in Jiangxi are to effectively protect the democratic rights of rural residents by improving the governance of grassroots organizations and perfecting the villagers’ autonomy system. In order to realize the strategic objectives for rural governance suggested fro Jiangxi, following measures are recommended: (i) decentralizing the power for decision making and management of rural public administration down to county government; (ii) strengthening the rural democratic system by taking the lead in electing county People’s Congress representatives according to the same proportion of population in urban and rural areas; (iii) improving the organizational structure and system to protect the democratic rights of farmers, including establishing sound democratic decision-making mechanisms to protect the democratic rights of farmers, improving the democratic management and the villager autonomy regime, strengthening democratic supervision, and developing a sound contact system for village cadres to listen to public opinion sufficiently; and (iv) improving the system of villagers’ autonomy. VI. Recommendations 1. Organizational innovations Trans-departmental rural development coordination agency should be established at provincial level to coordinate the planning and policy making regarding rural development and to reduce the inconsistence and conflicts among departmental based policies and planning. Similar organizations should be established at municipal and county level. 9

Advisory committee for rural development at provincial level can be established to strengthen the capacities of Jiangxi province for policy making and planning making on rural development. Such a committee can be formed utilizing the research resources distributed in Jiangxi. Industry associations related to rural industry development should restore the nature of industry association as clubs of member organizations and be strengthened. Farmers’ professional cooperatives perform imperative actors in achieving economies of scale, supporting the development of standardized and brand based green agriculture, organizing and undertaking training of agricultural technology for farmers, and facilitating the grassroots democracy and governance in current situations. Jiangxi province can borrow from other countries in organizing and promoting farmers’ cooperatives with the supports of professional promoters. 2. Institutional Innovation and improvement A set of institutional innovations are recommended so as to guarantee the accomplishment of the proposed strategic goals.  Land property transfer system should be modified to support the transfer of land property when the interests of the owners and contractors of the lands are protected, including the transaction market of land property, information management system for the registration and transaction of land property, institutional arrangements for consulting, evaluation and pricing of land property transfer.  The coverage and operation of rural social security system and public services should be improved to provide basic social safety and public services for all rural residents.  The rural grassroots democracy system should be modified and strengthened to protect the democratic rights of rural residents.  The regulations and legislations regarding green agricultural development should be made and modified, including the regulation on standardized production, inspection and testing, authorization management, law enforcement, and green technology promotion system, and information release system.  Vocational training system serving for all rural labors should be established to provide necessary training and education for all rural labors.  Sustainable utilization and management system for rural infrastructure should be developed and modified.  The laws, regulations and standard system on rural environment protection should be amended to provide more effective institutional supports for rural environmental protection. 10

3. Institutional innovations required for scientific and technological supports  Build and increase the capacities for research and development for the production, processing and logistics of major agricultural products in Jiangxi  Strengthen the research on the standard relating to rural development  Establish a workable agricultural technical extension network  Establish a system of providing training for all rural labors 4. Financing innovations Public finance. The public finance should prioritize the expenditure on public services and social security in rural areas. Public finance should play leverage roles of seed money by setting up venture funds and guaranty funds for supporting the brand development of green agricultural products of comparative advantage and giving bonus to the innovation in agricultural development. Financing. First, efforts should be made to develop new style of rural financing institutions, such micro-credit, community development fund and agricultural insurance while continuing the reform on rural credit cooperatives and other formal financing institutions. Secondly, the innovation of financing products and services should be encouraged and supported to improve the financing services for rural development in Jiangxi. Possible directions include innovating the collateral and guaranty for landing on the base of risk evaluation, such as using the contract of product sales, contracted land property and expected income as collateral to increase the credit lines for agricultural development; innovating the terms of loans according to the production cycle and cash flow and increasing the terms of loans for forestry and fruit development; setting up special guaranty funds for some important green agricultural products in Jiangxi by the government to share risks when financing institutions make loans to the producers and marketing enterprises of these products; and innovating the agricultural insurance supported by policies. Private investment. Efforts should be made to support large leading agricultural production and processing enterprises to directly raise funds from stock market and to improve investment environments for private investors from within and beyond Jiangxi province to make investment in rural industries development. Investment of local farmers. The government should formulate more favorable policies to encourage and support the local farmers, in particular, those retired from migration, to make investment in rural industries development. Financing support for the Poyang Lake Ecological Economic Zone 11

Planning. The financing mechanisms should be innovated to adapt to the needs of the Poyang Lake Ecological Economic Zone Planning. The recommended measures include consummating horizontal financing networks standardized within the region, expanding funding sources and channels to promote the commercial banks of regional center cities to cooperate for formulating regional banking group, business financing institutions. The financial products and services should be innovated by setting up agricultural industry development fund, proving necessary interest subsidies, grants and other financing supports to attract more financial resources investing in the Poyang Lake areas. In addition, government should increase the capital investment to support the development of environment friendly agriculture and agriculture industrialization. 5. Infrastructure The priorities of rural infrastructure development in Jiangxi are recommended to be in five areas: (i) developing rural information infrastructure and information platform to provide timely and sufficient information necessary for rural economic and social development and management; (ii) strengthening rural water conservancy infrastructure, in particular the small irrigation, and establishing sustainable operation and management institutional arrangement; (iii) further accelerating the construction of rural drinking water facilities to ensure the access of rural residents to safety drinking water; (iv) Developing rural road infrastructure to improve the road access of farmers; and (v) improving the rural logistics infrastructure, including storage, refrigeration, transportation and logistics parks. 6. Policy Suggestions Establish and perfect modern agriculture and rural development supportive policy system in following areas:  Ensuring stable increase of public finance expenditure used for agricultural development. The top priority should be given to effectively identify and standardize channels of financial support for agriculture and rural development so that each policy can be carried out in the end.  Buttressing development of important agricultural products of comparative advantage  Support large-scale irrigation projects and small irrigation facilities such as ponds, dams, canals and small reservoirs.  Popularize science and technology for agriculture.  Encourage and support the transfer of land property by linking the land transfer to the provision of training, pension insurance and allowing the farmers use their land for share-holding businesses. 12

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Diminish the threshold for starting enterprise and cooperative and simplifying the procedures for registration and appraisal. Support rural social undertakings. Recommendations are to develop and improve the long-term guarantee mechanism for rural compulsory education expenditure, to increase expenditure of public finance on rural public health, and to improve the coverage and service of rural social security system with focuses on rural minimum living protection scheme and pension insurance. Deepen the reform of financial system in counties and townships. Policies should be modified to improve the financial system in which provincial finance take direct charge of the finance at county level in a comprehensive way, to establish basic financial security system at the county level step by step, and to proactively eliminate debts owed grassroots government. Innovate the ways for integrating rural development related funds. Efforts should be made to decentralize decision-making of fund allocation and utilization down to county governments and to raise the proportion of general transfer payment while that of special projects decreased, to integrate special funds by the central finance, and to encourage funds integration by county governments. Establish demand-oriented decision making mechanism for rural public goods. It is suggested to identify the priorities of farmers’ demands for public goods, and allocating the funds available based on the orders of priorities, and improve the grassroots decision making mechanism and give farmers says on public goods supply Develop sustainable mechanism for supporting the rural development in Poyang Lake Ecological and Economic Zone. The suggested policies include innovating ecological protection mechanism and enhance ecological construction and environmental protection, coordinating ecological improvement and economic development and transform the ecological advantages into economic advantages, and giving full play to the leverage finance and taxation and develop win-win pattern between ecological protection and economic development.

13

I.

Introduction

1. Context of the Study 1.1 Government policies During the last two decades the rising disparities between rural and urban areas, between the coastal regions and western and central regions, and contradiction between environmental sustainability and economic development in the PRC has increasingly become the most important challenge for sustainable development of the country. In order to address the unbalanced development issues that emerged during the development process, the Government of PRC made a lot of efforts to transform the distorted development pattern in recent years. The major measures taken to date are the adoption of the principles of a balanced people-centered scientific development and a harmonious society development, the promotion of development in western and central regions, the elaboration and implementation of a program for the building of a new socialist countryside construction, and the implementation of an environment friendly development strategy. The 3rd session of the 17th Chinese Communist Party (CPC) national congress held in October, 2008, put forward the “Decision on Some Major Issues Relating to the Reform and Development in Rural Areas”, which further specified the national policies and development goals for rural reform and development by 2020. The key goals and tasks of the special program for building a New Socialist Countryside, as defined by the government, are to boost rural productivity, to improve rural infrastructure, to promote social development and to deepen democracy in the countryside as well as to increase the living standards of farmers. During the 3rd session of the 17th CPC national congress held in October, 2008, the Central Committee of the CPC set up more specific goals to achieve in the field of rural development by 2020. These include (i) improving the fundamental economic system in rural areas and the establishment of a system to harmonize the development between rural and urban areas; (ii) increasing the global productive capacity of agriculture in order to ensure the country food security; (iii) doubling of farmers’ income, the improvement of farmers’ consumption, and eradication of absolute poverty; (iv) further strengthening the construction of rural grassroots organizations and enhancement of the System of Villagers’ Autonomy to truly ensure the farmers’ right for democracy; (v) speeding up the process of providing equal access to public services to both the farmers and the urban citizens, developing the culture in rural areas and ensuring the farmers’ right for basic culture, ensuring all rural citizen enjoy the right and opportunities to access to good education, improving the basic health protection system and basic medical and health care system as well as the social management system in rural areas; and (vi) building up a resource saving and environment friendly agricultural production system, greatly 15

improving the living conditions of farmers and the ecological and environmental situation in rural areas to continuously improve the sustainable development capacities. The government’s new policies for rural reform and development have drawn a picture of PRC’s national rural areas development up to 2020. However, there are a lot of things to be done to translate the national goals into practical and feasible regional rural development strategies adapted to local conditions, which would build on local advantages and improve the local sustainable development capacity. In some sense, the national policies for rural development just defined long-run goals. It is now even more important to draw a road map to reach the defined goals taking into account the local conditions. The ADB supported Technical Assistance (TA) for the elaboration of the Jiangxi Province Rural Development Strategy is one attempt to assist provincial governments to develop the provincial rural development strategy in the framework of the new socialist countryside construction concept. The TA study aims to help with promoting the new socialist countryside construction and faster the development of the central regions, in particular in Jiangxi Province. 1.2 Context of the Study Area 1.2.1 Locations and Natural Conditions Located on the southern bank of the middle and lower reaches of the Yangtze River, Jiangxi Province is adjacent to Zhejiang, Fujian, Guangdong, Hunan, Hubei and Anhui Provinces. Its specific geographical location, close to the three of the four economic growth centers in the PRC, namely the Yangtze River Delta, the Pearl River Delta and West Straits Economic Zone, enables Jiangxi to take advantage of the effects of these three economic development poles in the PRC, and to gain more and better development opportunities. The total area of Jiangxi Province is 166,900 square kilometers, 36% of which are covered by mountains, 42% are hilly areas, and 22% are plains and water surfaces. Cultivated land accounts for 2,126,700 ha, forest land 8,716,900 ha, and fresh water utilized for fisheries 379,500 ha. Jiangxi enjoys a sub-tropical humid monsoon climate with an annual mean temperature of 18°C, and an average annual rainfall of 1,637.9 mm. A total of 2,400 rivers flow into the Yangtze River through Poyang Lake—the largest fresh water lake in the PRC. Water resources are plentiful with 141.6 billion cubic meters of water and a water surface of 1,670,000 ha, accounting for 10% of the total fresh water areas in the country. Jiangxi Province has 19 districts in cities and 80 Counties among which there are 10 county level districts and 70 counties, distributed in 11 prefecture level cities. There were 177,081 rural natural villages 1 1

Natural village refers to the rural community or settlement with close social and cultural

16

distributed in 17,235 administrative villages of 1,404 townships by the end of 2008. Its population was 44 million at the end of 2008 of which 58.6% lives in rural areas. Map 1: Geographic position of Jiangxi in the PRC

1.2.2 Economic development in Jiangxi since 2000 The economy of Jiangxi is in the stage of industrialization. In 2008, the per capita GDP was CNY14,781, and the total GDP was CNY648 billion, of which the agriculture GDP accounted for 16.4% while the secondary and third sectors accounted for 51.7% and 31.9% respectively. The private sector contributed to 52.2% GDP of the Province. Between 1978 and 2008, the provincial GDP was multiplied by 16.92, the agricultural GDP and the GDP per capita multiplied by 3.93 and 10.52 respectively (Figure 1). Since 2000, Jiangxi Province has achieved a fast economic growth with average GDP annual growth rate of 12% from 2000 to 2008. In the meantime, the value added in agriculture and the GDP per capita had grown 5.1% and 11.2% annually respectively. In spite of fast growth of the economy achieved in Jiangxi Province, Jiangxi was still standing on number 26 among the 31 provinces of the country in terms of contacts in PRC. Usually, several natural villages form an administrative village in Jiangxi.

17

per capita GDP in 2008. Jiangxi has also achieved outstanding growth in the agricultural sector since 2000. The agriculture gross output value had increased by 5% annually from 2000 to 2008. Among the sub-sectors of agriculture, the gross output value in forestry and fishery sectors had increased 7.1% and 7% annually over the period, much faster than the crop production and livestock sectors. Between 2000 and 2008, grain production has increased by 17.9%, from 16.15 million tons in 2000 to 19.04 million tons. During the same period, meat production increased by 28.6% from 1.923 million tons to 2.47 million tons. Figure 1: Economic Development in Jiangxi over1978-2008 1800.0 1600.0

Growth rate %

1400.0 1200.0 1000.0 800.0 600.0 400.0 200.0

2008

2006

2004

2002

2000

1998

1996

1994

1992

1990

1988

1986

1984

1982

1980

1978

0.0

Year GDP

Value added in the agriculure

GDP per capita

Data source: Jiangxi provincial Bureau of Statistics. 2009. Jiangxi Statistics Yearbook 2009. China Statistics Press.

The per capita net income and living expenditure of farmers increased by 6.54% and 5.32% annually respectively from 2000 to 2008. During the period, the per capita housing areas for farmers had increased from 27.79 square meters to 37.56 square meters. The number of TV sets, motorcycles and cell phones owned per 100 farmers’ households increased from 30.16, 17.47 and 1.43, to 95.76, 50.65 and 106.98 respectively over the same period. The physical infrastructure and living conditions of farmers in rural Jiangxi by the end of 2006 were in general comparable to the average 18

situation in the whole country and in the central region. The facilities for transportation, education, health care and communication in rural areas of Jiangxi were better than the average conditions observed in the whole country as well as in the central region while indoor sanitary facilities and environmental facilities were slightly below the national average and central regional average. 1.2.3 The New Countryside Construction Program in Jiangxi Province Jiangxi was one of the pilot provinces for the New Socialist Countryside Construction program in the PRC. In September 2004, Ganzhou municipal government in Jiangxi firstly launched the pilot for New Countryside Construction in some villages, which won the appreciation and supports from provincial and central government. From 2005 to 2008, Jiangxi Province has implemented the New Countryside Construction program in about 40,000 natural villages, becoming the province with the largest numbers of pilot villages in the country. Good practices experimented and proved in Jiangxi Province as a pioneer of the New Countryside Construction Program in the PRC have been borrowed and adopted by other provinces. These include taking the natural village as the basic unit for organizing rural development activities, forming villagers’ council at community level, starting the New Countryside Construction by improving living conditions, focusing on the development of village based specialized products (“one village, one product”), and consolidating the earmarked investments for rural development. 1.2.4 Poyang Lake Ecological Economic Zone Planning The Poyang Lake Ecological Economic Zone Planning (PLEEZP) was officially approved by the state council as a national strategic planning on December 12, 2009. The planning zone located in the north Jiangxi around Poyang Lake, covers 38 counties (districts) in nine prefecture level cities and 30% of the total land areas and about 50% of the total GDP in Jiangxi Province. The PLEEZP identified the strategic roles of the Poyang Lake Ecological Economic Zone as: (i) the demonstration zone for national comprehensive development of the Great Lakes watershed, (ii) the Yangtze River water ecological safety and security zone, (iii) an important impetus to accelerate the rising of the central region, and (iv) an important platform for launching international ecological and economic cooperation. Correspondingly, the PLEEZP puts forward the strategic tasks of the Poyang Lake Ecological Economic Zone development during the construction period from 2009 to 2015 and long-term outlook to 2020, including (i) constructing sustainable ecological system, (ii) developing ecologically and environmentally friendly economic system, and (iii) building 19

up an ecologically civilized society in the planning zone. Following the PLEEZP, Jiangxi provincial government has formulated a set of sectorial development plans, such as the Vegetable Development Plan, the Forestry Development Plan, the Industry Development Plan. It is hold by the Jiangxi provincial government that the PLEEZP will be taken as the center and basis for formulating the provincial 12th five-year plan in the province. 2. Objectives and Scope of the Study 2.1 Objectives of the Study The objectives of the study are to assist in formulating development strategies for rural areas of Jiangxi in line with the national policies on rural development and reform, and with the long-term development plan of Jiangxi Province to achieve inclusive, sustainable, balanced and pro-poor socio-economic development in the rural areas. 2.2 Scope of the study The study is expected to contribute to the improvement of the strategic planning for rural areas in Jiangxi and to achieving inclusive, sustainable, balanced and pro-poor socio-economic development in the rural areas. The major outputs of the study include (i) a complete development strategy in line with the national policies on rural development and reform and with the long-term development plan of Jiangxi Province based on consultations with the stakeholders and comprehensive studies of the comparative economic advantages, constraints and potentials of Jiangxi rural areas; and (ii) a package of policies and institutional recommendations for ensuring the implementation of the proposed strategy. The study covers (i) analyses of the present situation regarding the socio-economic development status, grassroots organizations structure, and environment and ecology in rural Jiangxi; (ii) a comparison of rural Jiangxi’s economic comparative advantages and disadvantages with those of other provinces in the central region; (iii) proposes for the goals, targets, and strategies for rural development in Jiangxi Province by 2020; and (iv) policy recommendations. Though the study covers all the important issues relating to rural development, but it focus on but not confine to nine major sub areas in order to support the overall strategic study on rural development in Jiangxi Province. Nine sub areas are (i) rural industries development, (ii) rural land property right reform, (iii) rural infrastructure development, (iv) rural logistics development, (v) rural environment and ecology, (vi) rural public services, (vii) rural grassroots governance and organizational reforms, (viii) rural vocational training, and (ix) institutional innovation and reforms. 3.

Approaches and Methodologies 20

3.1 Approaches Adopted for the Study Rural development is a dynamic process aimed to improve the quality of life of farmers and to increase the capacity for sustainable development in rural areas. The approaches adopted to study Jiangxi rural development strategy are integrated, multidisciplinary and participatory ones, and will consider the historic context and evolution. An integrated approach, or multidimensional, multisectorial, multidisciplinary approach, is utilized to analyze the rural development situation and issues in Jiangxi. Such a multi-folds approach is necessary because rural development covers various dimensions including economy, sociology, politics, culture and environment, and also considers the changes that occur in these different fields. Moreover, the economic development in rural areas comprises different sectors, such as agriculture, industry, services. Therefore, only a multidisciplinary approach can contribute to understand the actual situations and issues in rural areas, and to identify effective solutions to rural development. An open, rural-urban linkage approach is adopted for the study. Rural development in Jiangxi cannot be isolated from the situation and changes going-on in urban areas and from the situation in other Chinese provinces. As a consequence, the development strategy for rural Jiangxi needs to be considered from an open and rural urban linkage angle. A historic and dynamic approach is applied because the recent development in rural Jiangxi cannot go without its historical evolution which affects the selection of development path and solutions. Similarly, any development cannot jump one step to the end. It must go through a dynamic process. A participatory and stakeholders-centered approach is adopted when preparing the rural development strategy because farmers and other stakeholders know much more about the history, context, situation and demand than any other outside expert or organization. The demands of farmers and other stakeholders should be taken into account when formulating the rural development strategies. Therefore, consultations with stakeholders will take place through the whole research process during this study. Macro-micro linkage approach is adopted for the study. Though the provincial development strategy for rural Jiangxi mainly aims to address the macro development at the province level, it is impossible to come up with any meaningful strategic solutions without taking into account of the situations and demands in rural communities and inter-regional differences. 3.2 Methodologies Applied to Accomplish the Tasks The selected methodologies aim to complete the tasks set for the study. We employ the following methods to carry out the study based on our tentative analysis and understanding of the Terms of References. 21

SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis method is applied to assess the strengths and weaknesses of the existing development strategies and approaches in rural Jiangxi, and to analyze the possible development options and the risks involved. This method has been used for the overall and sectorial studies for the rural development strategy. Statistical and econometric analysis has been the extensively used method for this study. Statistical methods are used to compare and analyze the development status and major constraints, comparative economic advantages and disadvantages in rural Jiangxi over other provinces, and the gaps between the demands for future development and the resources and capabilities available. The statistical analyses mainly use the secondary data for Jiangxi and other central regions over time while first hand data of 463 sample households and 35 villages in seven sample counties have been collected. Case studies are undertaken to assess and analyze the performance of rural development, resources available for future development, major constraints, existing institutional arrangements and policy settings, and demands for development in selected representative counties and communities. Case studies are also used to analyze and identify the best practices in rural Jiangxi. Seven counties located in mountainous areas, hilly areas, lake areas, plains and suburbs of large cities have been investigated to represent major types of rural development contexts and models. Participatory assessment and stakeholder consultation are applied to assess the performance and effectiveness of the existing development strategies and policies, analyze the constraints to development, discuss and analyze the feasibility of and problems involved in the proposed strategies and action plans as well as policy and institutional recommendations. Except for the above methods for the overall study, some other methods have been employed for sectorial analysis. For instance, value chain analysis is used in the agricultural production, industrial development and logistics development sectors.

22

II. Current Status of Rural Development in Jiangxi Complete and facts based assessment of the current status of rural development in Jiangxi is the prerequisite for proposing feasible options for rural development in the province. The assessments made in this chapter cover the status of rural economies, public services, grassroots governance and environmental protection in rural Jiangxi. 1. Current Status of Rural Economic Development in Jiangxi 1.1 Agricultural development from the perspective of size, efficiency, safety and regional disparity 1.1.1 Agricultural development in Jiangxi The agriculture in Jiangxi has made impressive progress since 1978. The value added in real term generated by agricultural sector has multiplied by 3.7 times, or 139% as high as the national average during the period. The annual growth rate of agricultural value added in Jiangxi since 1999 has been higher than that of the national average as showed in Figure 2.

and the Country over 1978-2008 Growth rate 500.0 450.0 400.0 350.0 300.0 250.0 200.0 150.0 100.0 50.0 0.0 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 Year National

Jiangxi

Data source: NBS. 2009. China Statistics Yearbook 2009. China Statistics Press; Jiangxi Bureau of Statistics. 2009. Jiangxi Statistics Yearbook 2009. China Statistics Press.

The major agricultural products in Jiangxi have increased largely in 23

Jiangxi from 1978 to 2008. The most popular products in Jiangxi, rice and pigs, have increased 1.9% and 8% annually (Table 1). Fruit, silkworm and aquatic products have grown fastest among the major agricultural products in Jiangxi, with annual growth rate of 16.4%, 14.3% and 12.5% respectively during the period. In addition, tobacco and cotton have also increased steadily since 2000. The output of fruit, silkworm, aquatic products, tobacco and cotton in Jiangxi have increased 26.4%, 11.6%, 6.1%, 12.8% and 6.4% annually respectively from 2000 to 2008. The higher growth of the five agricultural products with high commercialization degree does not only help improve the structure of the agriculture in Jiangxi, but also help maintain a quite high growth rate of the agricultural sector when the two most popular agricultural products, grain and pigs, have grown slowly during the period.

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Table 1: Agricultural Development in Jiangxi over 1978-2008 1978

1980

1990

2000

2008

Growth (%) in 1978- 2008

Value added in Agricultural 3.6 4.8 17.6 48.5 106.0 5.5 sector (CNY billion) Gross output value of 4.9 6.8 25.5 74.1 168.1 5.5 agriculture (CNY billion) Grain (million ton) 11.3 12.4 16.6 16.2 19.6 1.9 Cotton (1,000 ton) 348.0 430.0 570.0 680.0 1,119.0 4 Oil crops (1000 ton) 1,349.0 1,376.0 5,489.0 9,673.0 9,119.0 6.6 Tobacco (1,000 ton) 61.0 37.0 231.0 182.0 478.0 7.1 Tea (ton) 8,878.0 10,385.0 19,415.0 15,703.0 22,977.0 3.2 Silk worm (ton) 143.0 181.0 2,639.0 3,266.0 7,833.0 14.3 Sugar cane (1,000 ton) 682.9 857.4 1,942.9 1,368.1 642.1 -0.2 Fruit (1,000 ton) 29.2 56.1 233.0 423.4 2,753.6 16.4 Output of meat(1,000 ton) 262.7 380.5 1,117.4 1,923.1 2,616.3 8 Output of aquatic products 59.3 75.5 306.8 1,271.2 2,046.0 12.5 (1,000 ton) Data source: Jiangxi Bureau of Statistics. 2009. Jiangxi Statistics Yearbook. China Statistics Press.

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Growth (%) in 2000- 2008 5.1 4.9 2.4 6.4 -0.7 12.8 4.9 11.6 -9 26.4 3.9 6.1

The growth path of the agriculture in Jiangxi, however, has not been straight in the past 30 years. There have been fluctuations going along with the growth of agriculture as a whole and of the different sectors. The gross output value of agriculture in Jiangxi has been in the status of positive growth except for in 1981 and 1999 (Figure 3). More important is the fluctuation of growth rate has been going with the agricultural development in Jiangxi in the past 30 years. There have emerged 14 years of declining and 17 years of increasing in terms of growth rate over the period. The year by year change in the growth rate of agricultural gross output value in Jiangxi from 1978 to 2008 showed some observable regular pattern, by which the gross output value of agriculture in Jiangxi kept going up for two or three years and then slowing down for one year. Among the sub-sectors of agriculture, the fluctuation in the output value of crop planting in Jiangxi was more obvious than in other sub sectors. There were some rules underlining the change in the output value of crop planting in Jiangxi from 1978 to 2008, by which the value declined once after growing for 4 or 5 years. There have emerged 5 cycles in Jiangxi since 1978 (only exception appeared in 1993 when no negative growth appeared but only slowed gown). The year by year fluctuation in the output value of livestock has been relatively small. Except for the negative growth in 1998-2000, the output value of livestock has been in positive growth for the remained years. The fishery output value in Jiangxi has never declined on the year by year basis but has been the sub sector with largest fluctuation in the past 30 years.

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Figure 3: Annual growth rate of agricultural output value over 1978-2008 40 30

%

20 10

20 08

20 06

20 04

20 02

20 00

19 98

19 96

19 94

19 92

19 90

19 88

19 86

19 84

19 82

-10

19 80

19 78

0

-20 Year Agriculture

Crop production

Forestry

Livestock

Fishery

Services

Data source: Jiangxi Bureau of Statistics. 2009. Jiangxi Statistics Yearbook. China Statistics Press.

1.1.2 The size of Agriculture in Jiangxi We estimate and analyze the change in relative size of the agriculture in Jiangxi since 1978 using the proportion of agricultural output value and major agricultural products in Jiangxi in the county as a whole as one indicator. It is found that although Jiangxi has been taken as a large agricultural province in the PRC for a long time, the proportion of the agriculture in Jiangxi has been not very big and been declining in the last three decades (Table 2). The proportion of agricultural output value in Jiangxi in the country has never been larger than 4% since 1978 and it declined to 2.9% in 2008. The gross output value of agriculture in Jiangxi ranked number 15 in thirty one provinces of the PRC in 2008. The forestry in Jiangxi has occupied largest proportion in the country among its all sub sectors of agriculture. The output value of forestry in Jiangxi once accounted for 12% of the national output value of forestry. There is one unbalanced relation existed in the forestry development in Jiangxi. The proportion of output value of forestry in Jiangxi in 2008 was less than 2/3 of its proportion 30 years ago even though the forestry coverage in Jiangxi has kept increasing in the last decade and now stands on the number 2 in the country. The output value of forestry per hectare of forestry land in Jiangxi in 2008 was CNY1,443, ranked number 11 in the country. In this regard, the forestry development in Jiangxi is confronting with the 27

choice between the growth of forestry land and improvement in the productivity of forestry production. The reasons underlining the mismatch of ranking in forestry coverage and forestry economic productivity are (i) Jiangxi provincial government has attached high attention to the increase of forestry coverage and environmental protection but no same efforts were made to improve the forestry economic productivity; (ii) the overall economic productivity of forestry in Jiangxi should be much higher than that estimated only by the output value per hectare if the integrated economic returns of forestry, including the contributions to environmental improvement and investment environment as well as to the improvement in the quality of live, is taken into account rather than only considering the direct forestry income; and (iii) no effective ways have been developed to coordinate the relation between the increase of forestry resources and improvement in the economic returns of forestry in Jiangxi. Crop planting has been the largest source of farmers’ income in Jiangxi. The proportion of output value of crop planting in Jiangxi once accounted 3.52% of the national value in 1980. It has declined in 1990’s and recovered after 2000. In 2008 the output value of crop planting in Jiangxi accounted for 2.48% of the national value. The output of grain has steadily contributed 3.7-3.8% of the total grain production in the PRC. The total grain output, per capita grain for sale and the total grain for sale in Jiangxi in 2008 ranked number 12, number 8 and number 9 respectively. Jiangxi government has been prided itself on the record by which Jiangxi has been one of the two provinces that have not stopped providing net grain export to other provinces since 1949. Jiangxi has not only made directly contribution to stabilizing the supply and price of grain in the country through providing net export of grain to other provinces, but also indirectly transferred its income and wealth out through the forced low grain pricing policy existed in the PRC over 40 years. Except for grain, the oil crop in Jiangxi, in particular, the rape seed has had a relatively important role in the country. The output of rape seed in Jiangxi in 2008 accounted for 4.27% of the national output. The output of tea in Jiangxi had once occupied 4% share in the country but halved in recent years. Fruit in Jiangxi has been a fast growing agricultural sector in recent years. Its output share in the country increased from 0.44% in 1978 to 2.3% in 2008. In particular, the output of orange in Jiangxi has occupied about 10% of the country’s market.

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Table 2: Change in the Position of Agriculture in Jiangxi in the Country (%) Gross output value of agriculture

1978

1980

1990

2000

2008

3.53

3.54

3.33

2.98

2.90

Output value of crop planting 3.26 3.32 2.43 2.48 2.48 Output value of forestry 12.21 11.80 5.91 6.19 7.00 Output value of livestock 3.01 2.69 3.15 3.00 2.70 Output value of fishery 2.90 2.40 2.45 3.69 4.07 Yield of grain 3.69 3.87 3.72 3.49 3.70 Yield of cotton 1.61 1.59 1.26 1.54 1.49 Yield of oil crops 2.59 1.79 3.40 3.27 3.09 Yield of tea 3.31 3.42 3.59 2.30 1.83 Yield of fruit 0.44 0.83 1.24 0.68 2.31 Yield of meat 3.07 3.16 3.91 3.20 3.58 Yield of aquatic products 1.27 1.68 2.48 3.43 3.89 Data source: NBS. 2009. China Statistics Yearbook 2009. China Statistics Press; Jiangxi Bureau of Statistics. 2009. Jiangxi Statistics Yearbook. China Statistics Press.

Jiangxi has maintained its share of output value of livestock in the country at about 3% in spite of fluctuation in the share in meat output since 1978. The output pork of pork in Jiangxi has had a relatively higher share in the country. It accounted for 4.29% of the national output in 2008. Fishery has been the fastest growing sub sector in Jiangxi’s agriculture. The share of output value of fishery in Jiangxi in the national market has increased from 2.9% to 4.1% in 2008. Fishery is the only agricultural sub sector in Jiangxi which has increased its share since 2007. In particular, the fresh water aquatic product in Jiangxi accounted for 8.29% of the national output in 2008. 1.1.3 Agricultural production organizations in Jiangxi Farmers’ household has been the fundamental and leading agricultural production organization in Jiangxi since the household responsibility system was established in early 1980’s. The production organization in Jiangxi has now undergone some important changes recently with the increase of migrated rural labors and loosening of the legal control over land property transfer. Major changes are in following three aspects. First, the size of and scope of land property transfer has been increasing. The data from the national 2nd Agricultural Census showed that there were 12.3% of the cultivated lands being transferred by means of leasing, changing the contracts with villages and transfer of land property right, which was higher than the national average and central region 29

average. The scope of land property transfer in Jiangxi based on the field survey data is quite large. There were 46.54% of the sample households engaged in the transfer of cultivated land. As the result of land transfer, a new division of labors has been developed among farmers’ households. Some farmers planted more lands while some farmers’ households with migrating labors planted fewer land or stopped planting lands. According to the data collect from the sample villages, 68.75% of the sample villages have had relatively large farmers with 20-30 mu cultivated land. There were 18.85% of farmers’ households with 20-30 mu cultivated land, 5.38% households with 30-50 mu cultivated land, 1.57% households with 50-100 mu cultivated land and 0.29% households with over 100 mu cultivated land in the sample villages. In addition to the transfer of property of cultivated lands, there has been fast growth emerged in the transfer of the property of forestry lands in Jiangxi since 2005. The official statistics shows that there occurred 40,700 cases of property transfer for forestry lands in Jiangxi since 2005 covering 3.8 million mu forestry lands, accounting for 2.86% of total collective owned forestry land areas. There has been large variation among prefecture cities and counties in terms of the forestry land property transfer. Five out of total 80 counties have had over 10% forestry land areas being transferred with the highest one, Tonggu county with 18.3% forestry land areas being transferred. The top three prefecture city in terms of the percentage of forestry land areas being transferred are Fuzhou, Yichun and Jiujiang (Table 3). Ganzhou and Ji’an, wherein the per capita forestry land areas are more than the provincial average, had lower proportion of forestry land areas being transferred. Table 3: Transfer of Forestry Land Property in Jiangxi in 2005-2009 Region

% Forestry land transferred

Per capita forestry land area (mu)

Nanchang 3.67 0.50 Jingdezhen 1.80 4.33 Pingxiang 0.94 2.03 Jiujiang 4.60 3.41 Xinyu 1.87 3.52 Yingtan 0.48 3.50 Ganzhou 2.11 5.94 Yichun 5.25 3.37 Shangrao 0.80 2.90 Ji’an 2.76 5.86 Fuzhou 6.07 6.63 Note: the figures for the prefecture cities include counties only. Data source: provided by the Jiangxi Provincial Department of Forestry. 30

Second, new style of rural cooperatives has been rising. There were 30.7% townships in Jiangxi that had established rural cooperatives by 2006 according to the 2nd agricultural census (Table 4). There were 1664 rural cooperatives in Jiangxi in 2007, of which 34.4% provided comprehensive services in production, processing and sales, 23.3% provided technical and information services for their members, 19.9% worked in agricultural production, 15.5% provided processing services and 7% in transportation and storage. In general, the rural cooperatives in Jiangxi were mainly concentrated in the areas of higher specification and higher marketing risks involved, including livestock, aquatic products, flowers and seeding, vegetable and fruit. The field survey data evidenced that 22.22% sample villages with cooperatives, and 45.63% of the farmers’ households in the villages with cooperatives participated in cooperatives. Table 4: Cooperative development in Jiangxi and other central provinces in 2006 % townships with agricultural cooperatives

% townships with agricultural cooperative entities

% villages producing and selling products via “firm plus farmers” coordination

% farmers involved in “firm plus farmers” connection

National

36.6

16.2

10.6

3.53

Shanxi

26.4

14.9

4.8

1.53

Anhui

49.0

23.6

10.1

2.28

Jiangxi

30.7

13.4

10.0

1.94

Henan

34.4

16.0

9.9

2.54

Hubei

38.7

19.2

9.8

3.18

Hunan

39.2

17.6

10.3

2.92

Central region

36.6

17.4

9.2

2.50

Data source: NBS. 2008. Outline of the Data for China’s 2nd National Agricultural Census. China Statistics Press.

Third, vertical linkage of farmers’ households with agricultural processing firms in Jiangxi has been strengthened. There were 10% villages involved in the linkage of farmers with agricultural processing and sales firms, which covered 1.94% of the total farmers’ households in the province in 2006 according the Agricultural Census. The affected scope of the vertical 31

linkage observed from the field survey data was much larger. There were 28.5% sample villages involved in the vertical linkage with the dragon head enterprises defined by county and above governments. Around 19% of households in the affected villages were involved in the linkage. The statistics provided by Jiangxi Provincial Department of Agriculture on the dragon-head agricultural industrialization enterprises shows that there were 4.6 million farmers’ households involved in the vertical linkage with the provincial and national dragon-head enterprises in 2008 in Jiangxi, of which 3.36 million households being linked in the form of contracted purchasing. The difference emerged in the estimation of different sources may be mainly owing to the definition of the linkages and the methods employed to estimate the number of beneficiaries. The number of beneficiary households in the statistics by the department of agriculture may include all households living in the affected areas, which will overestimate the beneficiaries. 1.1.4 Land Productivity of Agriculture in Jiangxi Most of major agricultural products in Jiangxi except for cereal, cotton and tobacco were lower than national average in terms of land productivity. Cereal, accounting for 61.7% of the total sowing areas in Jiangxi had a productivity of 5696 kg per hectare in 2008 (Table 5), which was 2.68% higher than the national average but lower than that in Hubei and Hunan which are located in the latitude same as Jiangxi. The second largest crop in terms of sowing areas in Jiangxi, rape seed, had a yield of 1062 kg per hectare, which was only 57.8% of the national average and fewer than one half of that in Henan. The cotton and tobacco in Jiangxi had the land productivity higher than national average though their sowing areas only accounted for 1.2% and 0.3% in the province. The yields per hectare of cotton and tobacco in Jiangxi were 31.2% and 10.7% higher than the national average. In particular, the yield of cotton per hectare in Jiangxi ranked number five in the country and number one in the central region.

32

Table 5: Yield of Major Agricultural products per hectare in 2008 (kg) Sesame

Sugar cane

3,365

1,835

3,217

71,210

1,114

2,122

1,448

-

-

6,235

1,950

4,004

2,092

3,354

42,976

5,696

5,720

1,708

2,592

1,062

4,011

45,862

Henan

5,865

7,328

2,040

4,020

2,578

3,847

59,426

Hubei

6,031

7,750

1,087

3,267

1,972

4,482

39,986

Hunan

6,329

6,429

839

2,434

1,328

2,468

53,683

Region

Cereal

Cotton

Peanut

National

5,548

6,563

1,302

Shanxi

3,709

1,228

Anhui

5,347

Jiangxi

Rape seed

Tobacco

Data source: NBS. 2009. China Statistics Yearbook 2009. China Statistics Press.

1.1.5 Regional concentration of major agricultural products in Jiangxi Two methods are employed to analyze the regional concentration of agricultural products in Jiangxi. One is to compute the concentration of major agricultural products in the regions with yield higher than the threshold yield. Another is to compute the location quotient of major agricultural products in Jiangxi. Four major agricultural crops, two of which are the two largest ones in terms of sowing areas, rice and rape seed, two of which are of higher yield compared with the national average, cotton and tobacco, are selected to analyze the regional concentration. The threshold yields are selected arbitrary mainly based on their actual yields and the national average yields of the crops. For example, the threshold yield for selecting rice production regions is set at 6 ton per hectare; those for rape seed, cotton and tobacco are 1.5, 1.5 and 2 tons per hectare respectively. Based on the set threshold, there are 29 counties assumed as rice high yield regions, 38 counties as rape seed regions, 19 counties as cotton regions and 17 counties as tobacco regions. The regional concentration indices are presented in Table 6.

33

Table 6: Regional Concentration of Major Agricultural Products in Jiangxi (2007) Number of % of the sowing % of the total counties areas in the output in the included province province Rice 6 29 40.77 44.71 Rape seed 1.5 38 32.33 43.91 Cotton 1.5 19 50.03 61.72 Tobacco 2 17 78.72 82.83 Data source: Jiangxi Bureau of Statistics. 2008. Jiangxi Statistics Yearbook 2008. China Statistics Press. Product

Threshold (ton/ha）

Among the four major agricultural crops in Jiangxi, tobacco has highest regional concentration with 17 counties occupying 82.83% of total tobacco output in Jiangxi; cotton is the second crop in terms of regional concentration with 19 counties producing 61.72% of the total cotton output; rice stands at number three with 29 counties producing 44.71% of the total rice output; rape send is the last one with 38 counties producing 43.91% of the total rape seed output in the province. The location quotients of 13 major agricultural products in Jiangxi were computed and the top 20 counties in terms of location quotient are listed in Table 7. The results show that Jiangxi has higher regional concentration in fruit, tea, tobacco, cotton, milk, sugarcane and eggs: (i) Fruit. Nanfeng county has a location quotient in fruit production as high as 32.33, followed by Xunwu, Jing’an and An’yuan with location quotient of 17.82, 10.1 and 9.94 respectively. The fruit production in Jiangxi is highly regional concentrated; (ii) Tea. Wuyuan has a location quotient of 32.04 in tea production, followed by Fuliang and Jinxi with the quotient of 13.67% and 7.03 respectively; (iii) Milk. Yudu has a location quotient of 27.13, followed by Luxi, Xinjian and Guangchang with the quotient of 7.66, 5.75 and 5.21 respectively; (iv) Tobacco. Xiajiang, Guangchang, Shicheng and Lichuan all have location quotient over 10 with jiajiang as high as 24.58; and (v) Cotton. Pengze, Jiujiang, De’an, Yongxiu and Hukou all have location quotient over 10 with Pengze as high as 23.32. The regional concentrations of the three largest crops in terms of sowing area in Jiangxi, rice, rape seed and vegetable, are relatively small. The largest quotient in rice production was 2.81 though all 20 top counties have location quotient over 1. The location quotients of three top counties are 3.14, 3 and 2.96 respectively. The top three counties in terms of vegetable location quotient have the value of 3.71, 3.1 and 2.8 respectively. Eggs have largest regional concentration in the livestock products in Jiangxi. The top four counties have the quotients of over 3 with Nanchang and De’an of 9.81 and 8.06 respectively. The top three counties in meat production quotient have the value of 3.67, 3.63 and 3.07. 34

Aquatic products which are supposed to be of high regional concentration have no significant regional concentration. The top three counties in aquatic production in Jiangxi have the quotient of 2.62, 2.48 and 2.46 respectively. The forestry products were replaced with forestry land areas in computing location quotient because of data availability. The 20 top counties all have location quotient over 2. In general, the agricultural products with relatively smaller size and high commercialization in Jiangxi are of high regional concentration while the products of largest sowing areas and lower commercialization are of relatively weak regional concentration.

35

Table 7: Top 20 counties of major agricultural products in term of location quotient in Jiangxi in 2007 Grain Name of county xiajiang

Rape seed Name of LQ county xingan 3.1

Cotton Name of LQ county pengze 23.3 jiujiang 13.7

Sugarcane Name of LQ county congren 10.5

Tobacco Name of LQ county xiajiang 24.6 19.3 guangchang

Vegetable Name of LQ county quannan 3.7

Rank

LQ

1

2.8

2

2.1

jinxi

3.0

zhangshu

8.4

taihe

3.1

leping

13.7

3

2.1

zhangshu

3.0

Gao’an

13.6

De’an

7.0

shanggao

17.3

shicheng

2.8

longnan

7.0

jinxi

4

2.1

yifeng

2.5

pengze

11.8

yongxiu

4.1

yujiang

10.4

lichuan

2.3

dayu

3.5

wuning

5

2.0

fengxin

2.5

hukou

11.6

hukou

4.0

yongfeng

7.4

huichang

2.2

nanchang

2.9

shangyou

2.0

xingan

2.4

An’yi

4.7

xingzi

3.3

yihuang

6.6

Le’an

2.1

taihe

2.9

shuishui

7

1.9

shanggao

2.4

An’fu

3.3

ruichang

3.1

xiajiang

4.9

zixi

2.1

yongfeng

2.3

suichuan

8

1.8

jishui

2.4

jinxian

3.3

Gao’an

2.9

nanfeng

3.6

ruijin

1.9

nancheng

1.9

quannan

9

1.8

Gao’an

2.4

congren

3.0

congren

2.3

dexing

3.5

xingguo

1.9

lianhua

1.7

yongxiu

10

1.8

nanchang

2.3

jiujiang

2.6

poyang

2.2

fengcheng

3.5

yihuang

1.8

nanfeng

1.6

tonggu

11

1.8

Ji’an

2.3

shanggao

1.7

wuning

2.1

yugan

3.4

xinfeng

1.8

zixi

1.4

congren

12

1.7

xinjian

2.1

poyang

1.7

Jing’an

1.8

lichuan

2.9

ganxian

1.7

qianshan

1.3

congyi

13

1.7

nancheng

1.9

Ji’an

1.6

fengxin

1.8

nancheng

2.5

An’fu

1.6

yihuang

1.2

jingangshan

14

1.6

An’fu

1.8

xiajiang

1.0

duchang

1.7

Ji’an

1.7

quannan

1.6

jiujiang

1.1

shanggao

15

1.5

Congren

1.8

taihe

0.7

shanggao

1.6

hengfeng

1.2

ningdu

1.5

Gao’an

1.1

dexing

16

1.5

Wan’an

1.7

Jing’an

0.7

An’yi

1.6

shangyou

0.6

nanfeng

1.5

xingan

1.1

dingnan

17

1.5

taihe

1.6

xinjian

0.3

xingan

1.6

zixi

0.4

guangfeng

1.5

lichuan

1.0

yushan

18

1.5

nanfeng

1.6

ruichang

0.3

yifeng

1.6

leping

0.3

lianhua

1.4

jinxi

1.0

taihe

19

1.4

fengcheng

1.6

fengxin

0.3

leping

1.5

jinxian

0.3

yongfeng

1.4

yongxiu

1.0

yiyang

20

1.4

dongxiang

1.6

yongxin

0.2

nancheng

1.5

wannian

0.3

An’yuan

1.3

wuning

1.0

nanchang

6

Note: LQ denotes for location quotient. Data source: Jiangxi Bureau of Statistics. 2008. Jiangxi Statistics Yearbook 2008. China Statistics Press.

36

LQ

Tea Name of county wuyuan

32.0

fuliang

(continued)

2

Fruit Name of LQ county nanfeng 32.33 xunwu 17.82

3

10.10

Jing’an

4

9.94

An’yuan

5

4.02

6 7 8

1

Meat Name of LQ county xingan 3.67 shanggao 3.63

Milk LQ 27.13

Name of county yudu

7.66

luxi

3.07

dingnan

5.75

xinjian

2.46

dongxiang

5.21

guangchang

quannan

2.45

zhangshu

0.89

2.93

jinxi

2.26

congren

2.91

yongxiu

2.24

yujiang

2.80

xinfeng

2.22

nanchang

9

1.97

xingan

2.08

Gao’an

10

1.72

congyi

1.85

yifeng

11

1.70

dayu

12

1.57

ningdu

13

1.53

14 15 16

Eggs Name of LQ county nanchang 9.81 De’an 8.06

Aquatic product Name of LQ county nanchang 2.64

Forestry areas Name of LQ county tonggu 4.83

2.48

yongxiu

4.77

zixi

3.55

An’yi

2.46

jinxian

4.15

Jing’an

3.27

longnan

2.36

shanggao

3.44

congyi

jinxi

2.98

taihe

2.31

hukou

3.24

quannan

0.73

lichuan

2.56

yifeng

2.16

jiujiang

3.12

fuliang

0.67

huichang

2.31

jinxian

1.99

pengze

2.89

jingangshan

0.56

ningdu

2.31

nancheng

1.97

xinjian

2.77

fuyuan

0.40

zhangshu

2.25

guangfeng

1.97

xingzi

2.51

yihuang

0.37

jinxian

1.96

yujiang

1.92

An’yi

2.34

yifeng

1.61

dayu

0.32

guangfeng

1.71

congren

1.84

xiajiang

2.31

dexing

1.56

ningdu

0.29

ruijin

1.70

fengcheng

1.73

zhangshu

2.21

wuning

ruijin

1.48

longnan

0.29

fengyi

1.45

guixi

1.71

duchang

2.15

An’yuan

1.40

longnan

1.45

An’yi

0.25

longnan

1.36

xinjian

1.68

wuning

2.12

dingnan

1.37

nancheng

1.42

taihe

0.24

tonggu

1.22

An’yuan

1.64

ruichang

2.12

xunwu

1.28

huichang

1.39

xinjian

0.23

huichang

1.22

fengyi

1.64

poyang

2.04

An’fu

17

0.89

yudu

1.39

xunwu

0.18

nanfeng

1.18

dongxiang

1.57

zixi

1.88

Le’an

18

0.79

dingnan

1.32

An’fu

0.17

yiyang

1.13

zhangshu

1.55

nancheng

1.87

xiajiang

19

0.77

xiajiang

1.28

fenyi

0.13

nancheng

1.11

nanfeng

1.51

lichuan

1.87

nanfeng

20

0.77

fengxin

1.26

jishui

0.09

yujiang

1.02

shanggao

1.41

fengcheng

1.87

lichuan

Note: LQ denotes for location quotient. Data source: Jiangxi Bureau of Statistics. 2008. Jiangxi Statistics Yearbook 2008. China Statistics Press.

37

1.1.6 Quality control and safety of agricultural products in Jiangxi Jiangxi province has been making efforts to improve the quality and safety of agricultural products. By the end of 2008, there had been over 300 provincial level agricultural standards, 250 prefecture level agricultural standardized technical specifications, and 500 industrial standards of agricultural products being developed to control and guarantee the quality and safety of agricultural products and the processing in the process from agricultural product production, to processing, packing, and sales. In addition, a series of agricultural product quality standards in accordance with the national industrial and corporate standards, including grain, oil crops, cotton, jut, tobacco, fruits, tea, vegetables, livestock, poultry and aquatic products, have been implemented in agricultural production of Jiangxi Province. Comprehensive standardized management has been practiced for a group of products of local specialties including Nanfeng tangerine, Xinfeng navel orange, Guangchang white lotus, and Congren chicken. In order to demonstrate the application and extension of the developed standards, more than 50 agricultural standardization demonstration zones, including 28 national level demonstration projects, being established in Jiangxi. In 2008, 150 agricultural production areas were selected to be built into agricultural standardization demonstration zones, among which 82 were for crop farming, 23 for pig raising, 6 for cattle (sheep and goats) raising, 16 for poultry raising, 23 for aquatic product raising. Advanced international agricultural standardized technologies such as GAP have been actively applied to raise the level of agricultural standardization. At the end of 2008, the number of production bases of pollution-free agricultural products increased to 676 covering 200 thousand farmers’ households. The efforts made by Jiangxi come up with fruitful results. Jiangxi ranked number 1 in the number of organic food in the country and number 7 in the number of green food in the country. Jiangxi has also PRC’s largest production base of organic green tea, organic Camellia Oil, green food navel orange, green food fresh water products, green organic mineral water and purified water. There’re now more than 442 green and organic food production bases with environmental supervision coverage of 43 million mu, and 31 standardized production bases of green food raw materials covering 8.5 million mu land areas and 1 million farmers’ households. Moreover, the contribution of green food to the agricultural income growth and upgrading of the industry has also increased accordingly. At the end of 2007, the sales income of green food amounted CNY13.17 billion, accounting for 8% of the gross agricultural output value and the food industry output value (excluding tobacco industry output value) together. The green food contributed to the foreign exchange by CNY140 million. By the end of 2007, 91 green food enterprises had become the provincial leading enterprises of agricultural industrialization, 38

accounting for 33.2% of the total provincial leading enterprises. Among them 10 enterprises had become the national leading enterprises of agricultural industrialization, accounting for 66.7% of the total national leading enterprises in the province. It is expected that the green food would play more important roles in the agricultural development in Jiangxi in the coming years. In the “five years” plan for Agricultural Industrialization in Jiangxi, the government planed to develop ten agricultural industrialization enterprises with sales income over CNY1 billion and one hundred enterprises with sales income more than CNY100 million. It was planned that green food enterprises would account for 70% of the ten enterprises with sales income over CNY1 billion, and 39% of the 100 enterprises with sales income more than CNY100 million. In 2008, 96.7% of the monitored vegetables met the standard as for the content of agricultural chemical residue; 100% of the monitored fruits met the standard as for the content of heavy metal and farm chemical residue, and100% of the monitored live pigs met the standard as for the content of clenobuterol and ractopamine. 1.2 Non-agricultural sector development in rural Jiangxi The investigation of the development of non-agricultural sectors in rural Jiangxi confronts with the constraints on data availability. There are only limited data available for the study. 1.2.1 Employment in the non-agricultural sectors in rural Jiangxi There exists no special statistics on rural non-agricultural sector employment available in the PRC. The alternative way to estimate the scope of non-agricultural sector employment in rural areas is to use concerned data in the study. The official statistics yearbook published the employment data on rural enterprises. It is possible to use the employment data for rural enterprises to estimate the employment of non-agricultural sectors in rural Jiangxi because there have been only very small part of the rural enterprises working in agriculture based on the historic data available. The employment in rural enterprises in Jiangxi had increased from 5.663 million in 1995 to 6.032 million in 2007, or 6.51% (Table 8). The change in rural enterprise employment has been the results of a series of factors. The privatalization of the township and village enterprises (TVEs) started from 1996. In only one year the employment in TVEs in Jiangxi declined from 4.4 million in 1995 to 3.09 million in 1996, which recovered after 2006. The employment in the private enterprises in rural Jiangxi since 1995 has been increasing in general but fluctuated over time because of the effects of the change in macro economic policies and environments. There had been two big shocks in the employment of rural private enterprises from 1995 to 2008 in Jiangxi. One was in 1998 and another in 2004. The employment in rural private enterprises in Jiangxi in the two years reduced 39

38,000 and 123,000 respectively, or 19.8% and 24.3%. The change in the employment of individual enterprises in Jiangxi during the period has experienced a long period of steadily declining from 1997 to 2004 and a recovery since 2005. The number of employment in the individual enterprises in rural Jiangxi peaked in 1997 when the enterprises provided employment 1.18 million and dropped down to 623,000 by 2004. It increased to 776,000 in 2008. There has been somehow linkage between the change in the employment of rural individual enterprises and the movement of rural migrants. When rural migrants increased the employment in rural individual enterprises declined and when rural migrants stabilized more new individual enterprises increased. Table 8: Chang in employees of rural enterprises in Jiangxi over 1995-2008 Employees Rural enterpr ises 566.3

Of which TVEs 440.1

1996 1997 1998 1999 2000

Proportion of total rural labors

13.9

112.3

Rural enterpri ses 36.39

443.0

308.8

17.9

116.3

28.70

446.7 411.9 433.0 405.7

309.7

19.2

117.8

303.2 306.9 307.2

15.4 20.6 20.1

93.3 105.5 78.4

28.81 26.72 28.01 26.22

2001

411.2

2002

438.2

309.6 330.8

22.8 29.6

78.8 77.8

1995

PEs

IEs

Of which TVEs 28.28

PEs

IEs

0.89

7.22

20.01

1.16

7.54

19.98 19.67 19.85 19.86

1.24 1.00 1.33 1.30

7.60 6.05 6.83 5.07

26.49

19.95

1.47

5.08

27.78

20.97

1.88

4.93

2003 466.1 346.1 50.6 69.4 29.34 21.79 3.19 4.37 2004 459.8 359.2 38.3 62.3 28.64 22.37 2.39 3.88 2005 503.7 394.9 45.2 63.6 30.73 24.09 2.76 3.88 2006 562.7 442.1 52.6 68.1 34.04 26.74 3.18 4.12 2007 603.2 472.9 58.0 72.2 35.93 28.17 3.46 4.30 2008 588.2 417.0 93.6 77.6 34.50 24.46 5.49 4.55 Note: TVE: township and village enterprise; PE: private enterprise; IE: individual enterprise. Data source: NBS. China Statistics Yearbook. 1996 through 2009. China Statistics Press.

As the consequence of the development in rural enterprises in Jiangxi, the change in the proportion of employment of rural enterprises to rural labor force has also undergone the similar change. The proportion of rural enterprises employment declined in 1996 and had been relatively stable in 40

eight years since 1996. It got recovery in 2006 and restored to the level in 1995 by 2007. The employment in rural enterprises accounted for 35.93% of the total rural labor in Jiangxi in 2007. The change in the employment in TVEs has played a dominating role in the movement of the proportion of rural enterprises in Jiangxi. Compared with the national average and other central provinces, the growth of employment in rural enterprises in Jiangxi from 1995 to 2008 had been very slow. During the period, the employment in rural enterprises in the country as a whole had increased 24.48%, which was 5.3 times as high as that for Jiangxi (Table 9). Table 9: Growth rate of employees of rural enterprises in central region in 1995-2008(%) Rural Of which enterprise PEs IEs TVEs s The country as a whole 24.48 17.32 467.30 -28.39 Shanxi 4.72 0.76 261.58 -32.67 Anhui 8.71 -4.01 1,075.94 9.54 Jiangxi 3.87 7.46 317.43 -35.67 Henan 53.91 48.10 351.82 8.82 Hubei 2.12 -17.21 135.63 -58.44 Hunan 23.29 35.95 278.50 -65.07 Data source: NBS. 2009. China Statistics Yearbook. China Statistics Press.

The estimation on the employment in non-agricultural sectors in rural Jiangxi presented above was based on the data in the China Statistics Yearbook. It will be cross checked using the national 2nd agricultural census data. It showed that there were 68.45% farmers’ households in Jiangxi engaged in full time agriculture in 2006 (Table 10), which means there were at most 31.55% farmers’ households likely engaging non-agricultural employment.

41

Table 10: Composition of farmers’ households by employment in 2006 (%) Region

Full time self-employ ed farmer 75.30 71.91 76.41 68.45 80.72 75.69 69.64

Self-employed farming for most of the time

Self-employed off-farm for most of the time 9.53 13.16 12.73 13.22 10.19 9.51 13.10

Full time self-emplo yed off-farm 3.68 3.70 2.80 4.22 1.35 4.04 3.38

Emplo yed

National 4.31 7.18 Shanxi 2.76 8.47 Anhui 3.24 4.83 Jiangxi 9.15 4.97 Henan 5.64 2.10 Hubei 4.87 5.89 Hunan 9.18 4.69 Central 75.08 5.85 11.69 2.89 4.50 region Data source: NBS. 2008. Outline of the Data for China’s 2nd National Agricultural Census. China Statistics Press.

It was known from the census that there were 57.13% rural labors in Jiangxi engaged in full time agricultural employment and 33.31% in migrating of which 73.9% migrated for over ten months in 2006. The employment in non-agricultural sectors in rural Jiangxi at most could be 17% of the total rural labors. If all migrating employment were assumed working in non-agricultural sectors, the total employment in non-agricultural sectors in rural Jiangxi, including locally employed and the migrated, accounted for about 43% of the total rural labors in 2006. It is not fore sure whether 57.13% rural labors engaged full time in agricultural employment.

42

Table 11: Employment composition by sectors of rural labors in 2006 (%) Jiangxi Shanxi Anhui Henan Hubei Hunan Central region National Crop planting 55.2 58.5 51.9 61.2 57.6 57.5 57.4 57.5 forestry 0.5 0.3 0.4 0.1 0.2 0.5 0.3 0.4 livestock 1.1 1.6 0.6 2.1 0.9 2.5 1.6 2.5 Fishery 0.2 0.0 0.2 0.1 0.8 0.3 0.3 0.5 Agricultural service 0.1 0.1 0.1 0.2 0.2 0.1 0.2 0.2 Mining 0.9 4.2 0.6 1.0 1.0 1.0 1.2 0.9 manufacture 19.7 5.9 12.2 9.9 14.3 15.1 12.8 13.0 Electricity, gas and water 0.3 0.6 0.4 0.3 0.3 0.3 0.4 0.4 Construction 6.1 4.9 10.7 8.8 6.6 4.8 7.4 7.0 Transportation, storage and post service 1.3 4.6 2.2 1.8 1.5 1.5 1.9 2.0 Wholesale and retail 2.0 3.4 4.6 2.5 2.1 2.0 2.8 3.0 Hotel and restaurant 0.9 2.8 2.5 1.5 1.5 1.2 1.6 1.7 Residence service and other services 3.5 7.0 6.7 4.7 6.3 5.5 5.5 5.3 others 8.2 6.1 6.9 5.8 6.8 7.7 6.8 5.7 Migration 33.3 15.3 36.5 22.9 32.6 31.1 29.0 23.8 Data source: NBS. 2008. Outline of the Data for China’s 2nd National Agricultural Census. China Statistics Press.

43

1.2.2 The contribution of non-agricultural sectors in rural Jiangxi to farmers’ income The net income sources of farmers’ households are regrouped to estimate the contribution of local non-agricultural sectors. We take the income from household run non-agricultural activities and that from employment provided for the enterprises within the resident townships and resident counties as income contributed by rural non-agricultural sectors. After the regrouping, the non-agricultural sectors in rural Jiangxi contributed 15.16% of the net income in 2008 (Table 12), which was the third largest source of income following the income in agriculture and that from migrated employment. In addition, a part of the income which was included in the employment earnings earned within province but out of the resident counties can be also from the non-agricultural sectors in rural Jiangxi. Assuming 50% of that income was from rural non-agricultural sectors, the total contribution of non-agricultural sectors in rural Jiangxi to farmers’ net income in 2008 would be 16.08%. Table 12: Sources and composition of farmers’ net income in Jiangxi in 2008 Sources

Amount (CNY)

Composition (%)

2086.01

44.41

Non-agriculture within the county

712.23

15.16

Other earnings from within township

335.11

7.13

1,105.86

23.54

Government services

180.18

3.84

Government transfer payment

100.44

2.14

Others

177.35

3.78

Agriculture within the county

Migrating employment

Total 4,697.19 100.00 Data source: Jiangxi General Survey Department. 2009. Annual Report of Farmers’ Households in Jiangxi.

1.2.3 The development of agricultural industrialization dragon head enterprises in Jiangxi In recent PRC, agricultural industrialization dragon head enterprises has been popularly used as a term to refer to the leading enterprises that have vertical linkage with farmers’ households and agricultural companies by providing services such as information, technologies, sales, processing and logistics. The dragon head enterprises are titled as national, provincial, prefecture or county depending on their scales. In 2008 there have been 407 provincial and national level dragon head enterprises in Jiangxi, of which 27 was of national title. These large dragon head enterprises with 44

fixed capital amounted CNY19.1 billion had sales income of CNY106 billion in 2008, of which 86 billion were related to agriculture. Among 407 enterprises, there were 18 enterprises with sales income over CNY1 billion and 160 enterprises with sales income over CNY100 million. There have been 4.6 million farmers’ households being linked with the 407 dragon head enterprises in 2008, 3.36 million of which were linked by means of contracted purchasing. It was estimated by the concerned government department that about a half of the farmers’ households in Jiangxi had been directly or indirectly linked to dragon head enterprises. There exist some problems in the agro-business development in Jiangxi. First, Jiangxi has fewer number of national level agro-industrialization dragon-head enterprises. There were 872 nationally identified dragon-head enterprises in the PRC in 2007. In average, each province had 28.12 national dragon-head enterprises then. But Jiangxi province had only 15 national ones. In addition, Jiangxi has had much fewer dragon-head enterprises of larger size than other provinces. For instance, Jiangxi had only 1,350 dragon–head enterprises with sales income over CNY5 million while Shandong and Henan had 8,790 and 5,000 respectively in 2007. Second, no well functioned mechanisms have been established for linking the development of dragon-head enterprises to the farmers’ households in Jiangxi. Only less than 40% of dragon-head enterprises linking with farmers take the form of formal contracts. Third, most dragon-head enterprises in Jiangxi have been in lower procession levels, therefore, the value added generated by the enterprises was very limited. For instance, over 90% of the rice processed by the dragon-head enterprises has been simply preliminary processing. Fourth, most so called dragon-head enterprises are of similarity in terms of production size and technology cannot support one another. For instance, Fuliang and Wuyuan are two largest counties in tea production geographically closing to each other. There have been a dozen of small dragon heads in tea production in the two counties. The case for dragon-head enterprises for processing camellia seed oil in Jiangxi indicated that the development of dragon-head enterprises has been in disorder in some areas. The annual output of camellia seed is about 200,000 ton in the province. But the enterprises have had capacities for processing the camellia seed one time more than the output. 1.3 Rural labor mobility and vocational training 1.3.1 The features of rural labor mobility in Jiangxi Jiangxi had 33.1% of rural labors migrating in 2006 (Table 13), which was ranked number 2 in the country. Compared with the national average and other central provinces, the rural labor mobility in Jiangxi has some obvious features.

45

Table 13: Migrating employment of rural Jiangxi and other central provinces (2006) PRC 1. Geographic distribution Out of residence township within the county Out of residence county within the prefecture Out of the residence prefecture with the province Other provinces Overseas 2. Distribution of migrating time Within 1 month 2-3 months 4-6 months 7-9 months Over 10 months 3. Distribution by sectors Agriculture Mining manufacture Electricity, gas and water Construction Transportation, storage and post service Wholesale and retail Hotel and restaurant

Shanxi

Anhui

Jiangxi

Henan

Hubei

19.18

47.16

9.32

12.09

16.47

9.56

12.45

13.53

13.76

25.68

6.86

5.86

12.38

9.78

10.14

9.91

17.65

17.39

6.08

4.11

12.19

11.46

8.32

9.03

49.01 0.41

9.75 0.01

77.65 0.10

77.84 0.10

58.78 0.18

69.07 0.12

68.90 0.19

67.40 0.14

0.37 3.12 12.68 21.61 62.21

0.44 5.36 23.01 31.21 39.97

0.25 2.94 14.55 28.20 54.06

0.30 1.99 9.00 14.78 73.92

0.36 3.72 19.15 31.57 45.21

0.38 2.00 8.84 18.28 70.50

0.41 2.45 10.36 13.99 72.79

0.34 2.84 13.44 22.82 60.56

2.74 1.84 32.23 0.95 21.74

1.72 7.97 9.42 1.80 17.75

1.70 0.69 27.28 0.82 24.30

2.57 1.35 49.66 0.60 14.76

2.31 1.59 27.32 0.84 28.25

2.07 2.21 39.44 0.81 17.14

2.37 1.25 41.31 0.83 13.13

2.15 1.64 34.38 0.83 20.26

3.72

8.55

3.95

1.97

3.43

2.36

2.71

3.23

5.28 4.85

7.38 11.52

8.01 5.55

2.95 1.89

4.82 4.14

3.39 3.60

3.64 2.99

4.93 4.13

46

Hunan

Central region

Residence service and other 12.61 18.98 14.17 7.05 11.91 13.89 12.85 services others 14.03 14.90 13.53 17.22 15.38 15.09 18.93 4. Distribution of migrants by ages 20 years old and below 16.16 16.16 15.51 16.56 18.50 20.91 17.50 21-30 36.47 33.56 34.20 41.06 35.40 37.31 37.78 31-40 29.49 27.37 32.79 29.86 27.55 27.35 29.10 41-50 12.76 15.87 12.31 9.77 12.61 11.17 11.62 51-60 4.42 6.14 4.31 2.43 5.16 2.81 3.45 Over 60 0.71 0.89 0.87 0.33 0.79 0.46 0.56 5. Distribution by education attained Illiterate 1.22 0.44 2.61 0.70 0.90 0.74 0.43 Primary school 18.73 13.43 20.46 22.68 11.92 16.70 13.53 Junior high school 70.06 76.14 71.31 68.71 77.55 72.45 72.12 Senior high school 8.72 8.96 4.84 7.07 8.31 9.24 12.56 College and above 1.27 1.02 0.78 0.84 1.31 0.87 1.36 Data source: NBS. 2008. Outline of the Data for China’s 2nd National Agricultural Census. China Statistics Press.

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12.58 15.86 17.66 36.60 29.32 11.86 3.91 0.65 1.12 16.45 72.97 8.40 1.05

First, more rural migrants migrated out of the province. There were 77.84% of rural migrants in Jiangxi migrating out of the province, ranked position two just after Guizhou. The proportion of rural migrants migrating out of the province in Jiangxi was 28.8 percentage points higher than the national average and 10.4 percentage points higher than the average of central regions. Higher proportion of rural migrant migrating out of the province in Jiangxi, demonstrated that the rural labors in Jiangxi had relatively higher capacities in finding jobs outside in the one hand, which is likely associated with the location of Jiangxi closing to the two largest economic growth zones, the Yangtze River Delta economic zone and the Pear River Delta economic zone. It also makes the employment in rural Jiangxi highly dependent on the demand of other provinces for rural labors and therefore more fluctuating. Second, more rural migrants living out of home. There were 88.7% of rural migrants in Jiangxi living out of home for over seven months in 2006, 73.92% rural migrants living our of home for more than ten months. The proportion of rural migrants living out of home over ten months in Jiangxi was 13.4 percentage points higher than the average of central region. Third, migrating employment in Jiangxi was highly concentrated in the manufactory sector. There were about one half (49.92%) rural migrants in Jiangxi employed in manufactory sectors, which were 17.4 and 15.3 percentage points higher than the national average and the average of central region. Such a sector distribution of rural migrant’s employment in Jiangxi may help the migrants accumulate techniques and experiences which may be useful when they go home for business in the one hand. It may enable the employment of rural migrants in Jiangxi be easily affected by the change of other provinces in manufactory sector development in the other hand. The change in international market also affects the demands for migrant employment in Jiangxi because a large part of migrated employment has been in the coastal regions where economies have been export dependent. Fourth, rural migrants in Jiangxi are of younger age in average and retired earlier. The rural migrants with age from 20 to 40 years old accounted for 87.5% of the total rural migrants in Jiangxi, which was higher than any other central provinces. The migrants aged 20-40 accounted for 43.4% of the rural labors with same age in rural Jiangxi. If the labors with the same age working in the local non-agricultural enterprises are counted in the remained labors in rural areas in Jiangxi must compose mainly of the old age labors. It may influence the application of new agricultural technologies and the improvement in the competitive capacities of agriculture in Jiangxi. Another issue coexisted with the younger age of rural migrants in Jiangxi is that the rural migrants retired earlier from the migrating labor market. In spite of lacking lifecycle data on migrants, it is possible to use the cross section data to estimate the retiring age of the rural migrants. There were only 48

12.53% rural migrants with age older than 40 years old and the migrants with age over 50 accounted for only 2.76% in Jiangxi. This implies that most of the rural migrants in Jiangxi retired from migrating labor market after they were over 40 years old and had to go back home in Jiangxi. It will bring about two issues. One is the government should be ready for dealing with the livelihood, employment, social service and social protection of the retired migrants in the near future. Another is how to make use of the retired and experienced rural migrants to serve for the rural development in Jiangxi. Fifth, the majority of rural migrants in Jiangxi had attained education in primary school or junior high school. The rural migrants with primary and junior high school education attainment accounted for 22.68% and 68.71% of the total rural migrants in Jiangxi in 2006. These rural migrants had almost had not any professional skills before they migrated and therefore their jobs can easily be replaced. Providing vocational training services for these rural migrants does not only affect the employment and living of them but also influence the choice of rural development strategy in Jiangxi. 1.3.2 The effects of financial crisis on rural migrated employment in Jiangxi Affected by the recent financial crisis, some rural migrant workers from Jiangxi province begin to return home. According to the estimation by the Office of Labor and Social Security of Jiangxi Province, from the beginning of the financial crisis in September 2008 to 22 January 2009, 1,554,800 migrants returned home, accounting for 23.54% of the total migrants. Among the 5,286,100 rural migrant workers who work outside the province, 1,385,500 of them returned home, accounting for 26.21%. The survey found that among the returned laborers, those who came back as a result of the temporary shutting down of the enterprises made up one third of the total number of returned labors. 10.2% of the returned laborers was attracted back by the favorable policy of promoting employment in Jiangxi province; 4.84% of the returned laborers planned to start their own business at home; and 55.35% came back mainly for the Spring Festival. 1.3.3 Current situation of Vocational Training for Rural Laborers in Jiangxi Province The data from the Jiangxi General Survey Department showed that 17.3% of the rural laborers took part in vocational trainings for rural laborers in 2008. It is found that 46.76% of the rural laborers that have not participated in the vocational training are willing to receive vocational training (Figure 4). Around 23% of them thought that the vocational training was unnecessary; 22% of them claim that there were no vocational trainings provided at their localities; and 5.5%, 4% and 2.3% of them responded that they had no spare time, or that the content of the vocational training was not 49

needed or that they couldn’t afford the training fee.

Figure 4: Causes for Not Particiapting in Training

27%

No need Unsuitable training contents

40% Time not available

4% 5%

Inaccessible locally Not afford to pay the cost Others

2%

22%

Data source: own survey.

It is found that 63.3% of the vocational training had been initiated by the rural labors themselves. About 16.6% of the trainings were organized by the government and 20% of them were organized by the enterprises. Considering the time of the various vocational trainings for the rural laborers, the research team found out that, on-the-job training is the one with the longest time. There are in all 217 days (Table 14), which almost equals to the number of working days of one year. So it can be understood that rural laborers are learning by doing, or that they being trained by their mentors.

50

Table 14: Time spent on the training programs Training program 1. Training Program for Rural Migrating labors 2. Training Program for Rural Applied Technologies 3. Sunshine Training Program 4. On the Spot Training 5. Other training Total Data source: own survey.

Respondents %

Time for training (days)

5.71

41.25

4.29

6

2.86 15.71 71.43 100.00

30 217.11 103.87

Using 10 points scale for evaluating the roles of training, it is found from the field survey that the training received by the rural labors was more useful for finding a job than for doing business, farming, or earning higher wages, and 4.05% of the respondents thought training had little effect (Table 15). Table 15: Perception of the respondents of the roles of training Helpful for Helpful for Helpful for Helpful for earning Useless business farming acquiring jobs higher wage Average Average Average Average % % % % % score score score score 4.05 22.97 4.96 14.86 3.85 51.35 7.42 6.76 6.94 Data source: own survey.

1.3.4 Characteristics of Rural Vocation Training in Jiangxi Establishing leadership of the organization in rural vocation training. In 2007, the provincial joint conference of rural laborers’ transfer employment headed by a deputy governor and composed of 33 member departments has been founded by the provincial government. The Conference makes overall plans for the provincial policy-making of rural laborers’ transfer, organization and coordination. The joint conference mechanism helped the training achieve so called “Six Unifications,” which refers to the unification of transfer training plans, the unification of recognition and authorization of training institutions, the unification of fund arrangements, the unification of the printing and utilization of training coupons, the unification of skill appraisal, and the unification of supervision and management. Coordinating the funds for rural vocation training. Following the principle of “Unchanging Fund Source, Unchanging Fund Utilization,” joint conferences of the same level government coordinates the fund arrangement plans and prints and distributes unified training coupons. Provincial departments determine the amount of training coupon of local cities and counties, according to the average subsidies standard of CNY300 51

per person. Strengthening the supervision mechanism of vocational training. A set of policies and documents have been formulated to specify the procedures and requirements of the printing, distribution, utilization, supervision and management of the training coupons and to establish the working system of social publicity, class opening and verification, graduation and examination, employment tracking and account management. Carrying out the unified recognition system for rural laborers’ training institutions. Carrying out the bidding system for rural vocational training. 1.4 Current status of logistics of agricultural products in Jiangxi Development of rural logistics can create jobs for rural working age population in the one hand, and facilitate and support the development of agriculture by expanding the borders of market and reducing the transaction costs in the other hand. Here the analysis on rural logistics development for this study is focusing on the logistics of agricultural products, in particular, the fresh fruit and vegetable. 1.4.1 Participators The logistics of fresh agricultural products are of unique features in production and consumption, and therefore, involve multi-participators, multi-channels. Based on the field survey, there were multiple actors participating in the logistics of agricultural products in Jiangxi, including farmers, agents, processing enterprises, producers’ cooperatives, wholesalers, retailers, transporters, and other logistics services providers. Farmers are not only the major producers of agricultural products but also the start point of the agricultural product logistics (APL). In the PRC, household farms are the main producers, which causes disperse small-scale, homogeneous production within restricted area. But the economies of scale only achieved by large scale or efficient and effective conjunction of partners in value chain of agricultural products, since lack of information exists, farmers make decisions on experiences instead of under the direction of market demand forecasting, passively attend logistics after harvest, possible result in disorder if variety, output or quality is out of control, for example, in 2006, 2007, the difficulty in selling of the citrus in south of Ganzhou City emerged, in 2008, culling sow in Shanggao County appears because of meat price volatility. Agents played very important roles in the APL in Jiangxi by visiting each farmer’s households to reduce individual farmer’s transaction cost and logistics cost. According to the household questionnaire survey specially made for this study, 67.7% of farmers sold their products through the agents, 7.5% sold the products in the local fair, only 0.86% of farmers sold their 52

products via contracted purchase of processing firms. Wholesalers in production place or sales places play important role in current fresh fruits and vegetables logistics system, as the mainstream of logistics model, by means of organizing small-scales supply to meet large-scale market demand, and minimizing the time from farmers to consumers to decrease decay possibility. Since the two factors won’t change in short-term, wholesalers will be important in long-term, even if specialized cold storage, cold transport get more developed. For example, 90% fresh fruits and vegetables in Nanchang city is supplied through the Shenzhen Agricultural products’ wholesale Markets. All kinds of retailers such as supermarkets, greengrocers’ shops, are responsible for delivering agricultural products to final consumers. Although bazaars in counties and cities are still the main channel for urban residents’ procurements, supermarkets will eventually become the dominant participator because of its advantages. 1.4.2 Channels At present every logistics channel is spontaneously formed with proper reasons and environment, taking an overview of the current fresh fruits and vegetables logistics channels, the following types can be summarized: Random type Random type of the APL refers to the unstable relationship existed between the participators, including “farmers--bazaars”, “farmers--bazaars in production origin—bazaars in sales markets — all kinds of retailers”, “farmers —agents--retailers”, “farmers—agents—wholesalers in sales markets--retailers”, etc. “Farmers--bazaars” is the most traditional way of the APL, after picking fresh fruits or vegetables, farmers send their products to nearby bazaar and directly sale to consumer, no logistics equipment or technology is necessary in this case, which can be completed by farmers own, since supermarket expand move slowly into counties, and traditional purchasing habits support, “Farmers--bazaars” will continuously exist for some time. Contract type Contract type of the APL refers to the stable relationship built between the participators by signing contracts, including “farmers—cooperation organizations—wholesalers in sales market--retailers”, “farmers — cooperatives -- retailers”, “farmers--processing enterprises--retailers”, “farmers—cooperation organizations--processing enterprises--retailers”, etc. This type of channels exists widely in the food processing chain using agricultural products as raw materials because it reduce marketing risk for farmers and other participators. It’s worth noting that when market risk is beyond expectation, enterprises with higher control ability will unilateral break the contract to avoid risks but bring more risks to farmers. For 53

example, in Xinfeng County, in 2008, because of “Maggots event”, financial crisis and increase of supply, export of citrus declined, price went down, some processing enterprises, wholesalers and retailers gave up home procurement and broke the contract, farmers have to self-transport goods to markets and suffered lower price caused by competition among farmers, the price reduced to lowest point of history damaged benefits of farmers. TLP type TLP (Chart 1) stands for third party logistics which provide professional logistics services for farmers and other participators in the food value chain. But professional TLP in Jiangxi still rarely exists.

Chart 1: TLP in fresh fruits and vegetables logistics system

P. B

Retailers

TLP

Farmers

TLP

Wholesaler

P.E

Note: C.O refers to cooperatives; P.B refers to production bases; P.E refers to processing enterprises.

1.4.3 Functional business The function business of the fresh fruits and vegetables logistics, including picking, sorting, grading, packaging, transportation, distribution, loading and unloading, handling, processing, distribution, and other functional activities, exist in every part of logistics. In Jiangxi, these businesses are accomplished by single participator independently at a separation status without account of the maximization of interests for the whole industry chain. For example, vegetables flow out of 54

Jiangxi usually stack directly on the agriculture vehicles to bazaars or wholesales market after simple banding or plastic packaging by employed drivers, if the transaction didn’t go well (time wasted), the price will drop sharply because of no storage equipment, the flexibility left to farmers is restricted. Another example is from the interview of the Shenzhen agricultural products wholesale market in Nanchang, one market manager said “if one truck of fresh pepper arrived at market before 8:00, the profit will be CNY 10-20 thousand, if arrived later than 8:00, the loss will be CNY10-20 thousand.” So the integration of every logistics business is vital to value keeping or increasing during logistics process. 2. Rural Physical Infrastructure and Village Renovation 2.1. Rural physical infrastructure 2.1.1 Irrigation and water supply infrastructure in rural Jiangxi Jiangxi has been of relatively better irrigation infrastructure in terms of the sources of irrigation water, the safety of irrigation provided in normal years and the sources of investment of irrigation infrastructure in 2006 compared with most other central provinces (Table 16). There were only 1.2% villages without sources of irrigation in Jiangxi. Around 87.6% of the villages in Jiangxi can access to reliable irrigation water.

55

Table 16: Rural irrigation and water supply infrastructure in Jiangxi and other central provinces in 2006 （%） PRC

Shanxi

Anhui

Jiangxi

Henan

Hubei

Hunan

% village with Water source mainly from surface 61.2 17.5 70.0 93.8 23.0 87.5 91.3 % village with water mainly from underground 27.8 31.9 28.3 5.0 67.6 4.6 5.0 % village without reliable water sources 11.0 50.6 1.7 1.2 9.4 7.8 3.7 % village with reliable irrigation 79.48 41.21 92.18 87.57 84.31 80.47 78.89 % village with pumping well 37.37 37.59 30.46 12.00 76.68 11.21 13.87 % village with ponds for irrigation 36.31 5.16 68.05 71.20 20.31 61.79 69.51 % village with pump station 18.02 4.97 29.39 31.12 7.48 38.98 26.03 Sources of irrigation infrastructure investment: 9.56 5.36 8.28 17.43 8.83 9.36 12.69 Of which: mainly from the government From collectives 13.39 9.82 16.64 17.89 10.70 17.58 13.52 From other sources 6.63 4.96 11.42 10.25 7.84 10.63 11.46 None 70.42 79.85 63.65 54.43 72.62 62.43 62.32 % households with tap water 48.6 68.1 19.5 17.6 27.7 28.6 25.6 % households with difficult in fetching water 10.3 14.4 3.9 6.5 5.0 18.5 15.0 Data source: NBS. 2008. Outline of the Data for China’s 2nd National Agricultural Census. China Statistics Press.

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Central region 59.9 27.8 12.4 77.17 34.93 46.06 20.81 10.05 13.59 9.31 67.05 28.5 9.6

Own field survey data showed that river and reservoir had contributed 35.1% and 30.7% of the irrigation water respectively (Figure 5). But the operation of the irrigation infrastructure in villages in Jiangxi seems not good because of lacking care and management. It is found from the village survey that 53.1% the irrigation infrastructure had been ageing and were lacking maintenance. There have been management arrangements made for the village irrigation infrastructure in 60% villages. It was reported that 11.11% villages had established special water management committees, 22.22% villages had assigned special persons to taking care of the irrigation facilities, 33.33% villages had signed contracts with specific farmers to take care of the irrigation facilities. Figure 5: sources of irrigation water in Jiangxi

35.10% 2.50%

River Reservoir

14.00%

Ponds & dam Channels Pumping well

30.70%

17.73% Data source: own survey.

Another survey of 160 farmers in 32 villages in 16 counties on the opinion of farmers for investment for irrigation facilities showed that 40.04% of the respondents hope the government to take charge of the investment in irrigation infrastructure. 42.25% of the respondents thought it can be built by raising funds among villagers. 2.1.2 Rural transport and communication infrastructure In general, the rural transport and communication infrastructure in Jiangxi has been in a better position compared with the national average and central province average. There were 97.7% villages and 82.8% natural villages accessible to motorable roads (Table 17) in 2006. Ninety five percent of the village roads connecting to other villages had been paved in Jiangxi, which was higher than any other provinces in central region. Around 99.4% villages and 95.9% natural villages had been connected to telephone in Jiangxi. Cell phones have been very popular in rural Jiangxi. Every 100 farmers’ households in Jiangxi had 65.6 cell phones and 93 telephones. 57

Table 17: Rural transport and energy infrastructure in Jiangxi and other central provinces in 2006（%） PRC

Shanxi

Anhui

Jiangxi

Henan

Hubei

Hunan

Central region

95.5

96.1

96.0

97.7

95.6

96.3

96.1

96.1

82.6

87.0

80.9

82.8

75.1

80.3

85.2

81.1

21.8

25.6

6.1

6.6

25.5

4.5

2.7

13.0

Cement

35.2

40.7

23.4

59.7

34.8

42.6

32.1

37.2

Asphalt

26.3

32.0

30.4

7.4

51.2

19.7

7.3

26.7

Sand and stone

25.7

12.3

39.2

27.6

5.0

28.0

50.2

26.3

Bricks and stone

1.1

1.8

1.4

0.1

1.7

0.9

0.4

1.1

% village accessible to motorable roads % natural village accessible to motorable roads % villages with lights in the main roads % Materials of village road surface

Others 11.7 13.2 5.6 5.2 7.3 8.8 10.0 % village connected with 97.6 95.3 99.9 99.4 99.4 99.0 98.7 telephone % natural villages connected with 93.7 85.6 98.1 95.9 94.9 93.9 95.2 telephone Data source: NBS. 2008. Outline of the Data for China’s 2nd National Agricultural Census. China Statistics Press.

58

8.7 98.6 95.2

The findings from the field survey are that almost all respondents (93%) thought the investment for the roads linking villages should be provided by local governments. There were about 29% respondents willing to make contribution to the construction of roads within village. 2.1.3 Energy infrastructure There were 99.9% villages and 99.3% natural villages in Jiangxi connected by electricity grid in 2006. But the fuel for cooking of farmers in Jiangxi was still dominated by firewood. Around 69% of farmers used firewood mainly as fuel for cooking. There were 25.1% and 5.1% households that mainly used coal and natural gas as fuel for cooking. Very few households used electricity and biogas for cooking in Jiangxi. 2.1.4 Housing infrastructure in rural Jiangxi The farmers’ households in Jiangxi had 37.6 square meters housing per capita in 2008. About 64.8% housing in rural Jiangxi were reinforced concrete structure. There were only 0.4% farmers’ households in Jiangxi living in the leased houses. 2.2 Village renovation Village renovation in Jiangxi mainly refers to the improvement in the physical infrastructure, living conditions and rearrangement of rural settlements within villages according to the agreed village development plans. 2.2.1 Waste treatment The waste in rural Jiangxi used to be put in wish before the NCCP. With the sustained efforts made in village renovation in the NCCP villages, there have been obvious changes occurred. Most waste in the NCCP villages has been treated in one or other ways. Only 3.45% households still put waste without treatment (Figure 6). Around 52% waste has been collected by village cleaning persons and treated. There were 13.79% villages in which waste had been collected by garbage treatment station.

59

%

Figure 6: Change in the Ways for Gabbage Disposal after NCCP 80 70 60 50 40 30 20 10 0 Put at wish

Collected for disposal

Put tegether or in station

Before NCCP

Burning

Others

After NCCP

Data source: own survey.

It was reported that each village had 3.3 cleaning persons in charge of waste treatment and cleaning in the villages where waste had been collected by cleaning persons. The arrangement for wages of the village cleaning persons varies with villages. 59.67% villages collect money from each farmer’s household to pay the wages, 21% villages paid the wages with village collective income. The remained villages did not provide certainty answers on the source of funds. The garbage disposal is very important for keeping healthy environment in villages. Over a half of villages buried the collected garbage in villages (Figure 7). Figure 7: Ways for Gabbage Disposal after Collection 60 50

%

40 30 20 10 0 Put together

Bury after collection

60

Burn after collection

Other

Data source: own survey.

2.2.2 Roads connecting villages The inter-village road conditions in Jiangxi had been quite poor before the NCCP started in 2005. Two thirds of the inter-village roads were soil roads. The situations have been changed significantly after 2005. It is found from the village questionnaire survey that 87.5% of the interviewed villages have upgraded the inter-village roads after the NCCP. Each village made investment CNY790,000 in the road improvement. 50.4% of the investments for roads came from the local government. About a half of the upgraded inter-village roads has been maintained by village committee or villagers’ groups. 2.2.3 Drinking water The change in drinking water in the NCCP villages after 2005 has been in the largely increase of tap water. The investments made in improving drinking water supplying facilities were shared by the government, village collectives and farmers. Farmers have made about 40% contribution to the investments while local government provided 37.5% of the investment. The remained investments were from village committee and donations. About a half of the water supply facilities have been maintained by special persons or water users’ association. Farmers in the villages had to share the costs, which led to the increase of costs for drinking water. 2.2.4 Rural toilets There emerged significant change in the types and quality of toilets in the NCCP villages. 99.33% of the interviewed households have used water flush toilets. The quality of toilets have also been improved by adopting the recommended structure equipped with septic tanks by the NCCP Leading Group offices, by which there is no longer stink smells in the toilets, and the fertilizer can also be used. 2.2.5 Decision making on village public affairs There were more farmers participating in the decision making on village public affairs through the form “special discussions arranged for any special affairs”. It was reported that there were 47.06% interviewed farmers had participated in the discussion of public affairs in 2008. 3. The Status Quo of the Rural Public Service System 3.1 The supply of rural public service system and its overall effectiveness With the implementation of long-term agricultural policies in favor of farmers and the promotion of rural development, supply of basic public services in rural Jiangxi has been greatly improved. At present, the main supply entities of public services in PRC's rural areas are government 61

at all levels. Most of them are the functional departments of the grassroots level government (county and township). In particular, the current system of rural public services, such as basic education, basic health, family planning, rural minimum living protection (Dibao), working skills training and provision of employment opportunities, work injury insurance system, has a strong regional spillover character. Infrastructure, cultural facilities, agricultural services, veterinary services, legal services, the protection of the rights and interests which have regional characteristics as public goods, should be provided and funded by local governments, especially county-level government. Farmers would be free of charge, but more of these services provided by the township government or village committee (group), such as transport services, passenger transport in rural areas should be guided by local governments, and funded by farmer groups or private sectors. In order to learn the situations of the public services provided for farmers and the demands of farmers for the public services, a set of questions had been designed to capture the results which are presented in Table 18. It is found that the beneficial coverage of basic education, basic health care, rural minimum living protection, for which the state is the major provider, is relatively wide while the beneficial coverage of work skills training, work-related injury insurance system, employment opportunities is narrow. Infrastructure, agricultural services, veterinary services which mainly provided by local governments have a relatively broad beneficial coverage, the beneficial coverage of legal services, and the protection of the benefits is relatively narrow. The transport services and rural passenger services which guided by the local government, funded by farmers or private have a broad benefit coverage. Analysis from the satisfaction degree of the received service, ranking from high to low take turns from rights and interests protection, work-related injury insurance, transportation services, essential education, veterinary services, employment opportunities, cultural facilities, cooperation in health care, rural subsistence allowances, legal services, infrastructure, agricultural technical services. From the priority order of the demand for services (the questionnaire assigns ordinal number, then the smaller the weighted average value is, the higher priority the farmers demand for), the order of demand for basic public services from farmers’ point is cooperative medical care, agricultural services, infrastructure, passenger transport in rural areas, rural subsistence allowances, compulsory education, transport services, cultural facilities, veterinary services, rights and interests protection, legal services, industrial injury insurance.

62

Table 18: Utilization of and demand for public services in rural Jiangxi Type of Public Services

Whether receive the services % yes no 39.70 60.30 12.80 87.20 50.76 49.24

Veterinary services Legal services Agricultural technical services Cooperative medical 98.92 system Passenger transport 77.87 in rural areas Employment 16.05 opportunities Work skills training 5.64 Transport services 40.56 Physical 84.38 infrastructure Cultural facilities 29.93 Dibao 36.44 Compulsory 78.09 education Work injury 7.81 insurance system Protection of the 8.89 rights and interests Data source: own survey.

Whether are Satisfied % yes no 39.70 60.30 12.80 87.20 50.76 49.24

Demand priority score 7.50 8.20 2.94

rank 11 13 2

1.08

98.92

1.08

2.32

1

22.13

77.87

22.13

4.35

6

83.95

16.05

83.95

3.25

3

94.36 59.44 15.62

5.64 40.56 84.38

94.36 59.44 15.62

4.06 5.56 3.29

5 9 4

70.07 63.56 21.91

29.93 36.44 78.09

70.07 63.56 21.91

6.08 4.45 4.77

10 6 8

92.19

7.81

92.19

8.48

14

91.11

8.89

91.11

8.16

12

From the data we can find that, the public services that the villagers have received insufficient mainly are those relating to right protection, such as work-related injury insurance, transportation services, veterinary services, employment opportunities, cultural facilities and other services, received higher degrees of satisfaction. This can be confirmed with the order that the cooperation of medical, agricultural services and infrastructure are still farmers most needed of public services. In addition, passenger transport services in rural areas, rural subsistence allowances, and transportation services for rural households have become the new aspects of demands for public services to the farmers. 3.2 The status quo of sector based public services in rural areas In order to avoid duplicating the analyses made in other sectors, it focuses on public health service, emergency management and infrastructure. 63

3.2.1 The operations status of rural public health services system The rural health management system construction has been strengthened, and township medical institutions operating mechanism was reformed. In each township a government-organized prevention stations has been set up. The spatial distribution of hospital resources has been adjusted by strengthening the linkage of rural hospitals with county town and other central hospitals. At the end of 2005, the township level in Jiangxi Province had 19,587 hospital beds, 30,764 health workers, including 8,495 physicians with licenses. The structure of public financial investment for public health services was adjusted, with the development of the New Type of Rural Cooperative Medical System (hereinafter referred to as "NRCMS"). In 2006, Jiangxi Province, the "NRCMS" has covered 84.95% farmers, higher than the national average and central province average. The "NRCMS" has raised funds of CNY575,494,500, of which government at varied levels covered 75.3% and farmers contributed 24.7%. It is found from the survey that the main reasons for farmers not seeing timely see doctors incase of being sick are relating to local health conditions (including the level of bad doctors, medical inconvenient), medical charges and the arrangement of the "NRCMS" in reimbursement (Table 19). Table 19: Reasons about "Why family did not see a doctor promptly" Options Frequency(1) Frequency(2) Frequency(3) Went to hospital as soon as 8.56% being sick In case of minor illness, just bought and had pills. If have 21.82% 6.77% 15.79% big illness, the local hospitals can not cure Medical expenses are too high 42.54% 22.56% The medical expenses not 21.05% 3.31% 28.57% reimbursed by the "NRCMS" Lacking qualified doctors 0.83% 12.78% 5.26% Inconvenient medical service 13.26% 18.80% 36.84% Lacking trust in the local 10.52% doctors Others 9.68% 10.52% 10.52% Note: respondents are required to present three most important reasons. Data source: own survey.

There have been 17.10% respondents unsatisfied with the "NRCMS". The main reasons include including low reimbursement level (Table 20), coverage of reimbursement, inconvenience for visiting the designated hospitals or clinics, etc. 64

Table 20: The reasons about "Unsatisfied with NRCMS" (%) Options Reimbursement is too low Cap lines too low, and only guarantee serious illness Hospitals charge high Only to reimbursement of hospitalization, out-patient non-reimbursement The threshold is too high Fewer hospitals, medical treatment is not convenient Sentinel hospital standard deviation Inconvenient reimbursement procedures Poor attitude of doctors The rising price of medicines which may not be reimbursed The same disease, somebody can be reimbursed, and somebody was not reimbursed The maximum amount of reimbursement is too low Others Data source: own survey.

Frequency(1) 37.06 11.18

Frequency(2) 3.88 15.53

Frequency(3) 2.00 6.00

8.82 21.18

5.83 36.89

10.00 10.00

2.35 7.65

6.80 7.77

8.00 8.00

1.76

2.91

42.00

8.82

15.53

15.53

-

-

8.00 2.00

-

-

2.00

-

-

2.00

1.18

4.85

-

3.2.2 Rural public security and emergency There were 36.8% of the respondents who reported there had been emergent cases in recent three years. Unexpected events occurred in the villages, are mainly flood, livestock disease, landslides, forest and residential fires, drought and so on (Table 21). There were two unexpected events in Jiangxi Province among the investigation: mountainous district at south of Jiangxi have winter drought, where the frequency of fire, had spread to several surrounding counties, lost great property; lack of basis water conservancy facilities, the winter drought-induced frost orange disaster losses even greater than last year's losses of frozen, but no agriculture, water conservancy, the importance attached to the fruit industry sector.

65

Table 21: Rural public security and emergency (%) Emergency None Forest fires Residential fires Landslides Flood Earthquake Acute infectious disease Appeal to the higher authorities for help Livestock disease Large-scale fights Snowstorm Drought Wild boar damage Hurricane Frost Others Data source: own survey.

Frequency(1) 63.20 9.96 0.65 1.30 12.55 1.30 1.08

Frequency(2) 9.68 12.90 6.45 22.58 6.45 3.23

Frequency(3) 14.29 28.57

3.25 4.33 1.08 0.43 0.65 0.22 -

19.35 3.23 6.45 3.23 3.23 3.23

28.57

14.29

14.29 -

3.2.3 The preference of demand for rural infrastructure construction and management Jiangxi has made impressive improvement in its rural infrastructure in recent years. But there are still big gaps existed in the demands. The priorities of the farmers’ demand for rural infrastructure vary with the current situations and among varied components. Table 22 presents the results of the reference ranking (by ordinal number assignment, then the smaller the weighted average value of the note after the farmers need more high order, that is, the more necessary) . Roads are ranked first in the preference, followed by irrigation works, tap-water, CATV, cultural facilities, public toilets, and biogas. In infrastructure construction, more than half of the respondents are willing to pay for irrigation, roads, tap-water and CATV rather than pay for cultural facilities, public toilets and biogas, which peasants in infrastructure needs the priority order to confirm each other. In infrastructure maintenance, more than half of the respondents are willing to pay for irrigation, roads, tap-water and cable construction, and do not want to pay for public toilets. The data also show that if the government or other organizations built the cultural facilities and the construction of biogas, the peasants interviewed would be willing to pay for maintenance. It is shows that with the 66

construction of agricultural infrastructure and promote the building of new countryside, in construction and maintenance of the facilities should be formulated according to different local conditions of construction and maintenance programs to promote the construction of infrastructure and long-term efficient use. Table 22: Preference of demands for rural infrastructure Type of infrastructure

Priority Weighted average scores 2.62 2.22 2.06 4.72 4.45 3.92 4.29

Tap-water Irrigation Roads Biogas Public toilets CATV Cultural facilities Data source: own survey.

Are willing to pay part of the cost (%)

Priority needs 3 2 1 7 6 4 5

For construction

For maintenance

yes

no

yes

no

68.04 79.00 78.08 39.73 43.53 50.00

31.96 21.00 21.92 60.27 56.47 50.00

76.60 77.66 73.68 50.00 44.26 60.71

23.40 22.34 26.32% 50.00 55.74 39.29

38.27

61.73

54.41

45.59

3.3. The problems in Public Service System in Rural Jiangxi Jiangxi has made marked progress in improving the public services in rural areas since 2000 especially after the new countryside construction pilots initiated and expanded. With the development of villagers’ council and innovation in funds and project coordination, Jiangxi has already explored some effective ways for involving rural residents in the supply and management of rural public goods and for putting together the earmark funds from varied channels for construction of rural public infrastructure in rural communities. However, the supply and management of rural public services in Jiangxi is far from meeting the needs of farmers. There are some problems existed to be addressed through institutional innovations and policy adjustments. 3.3.1. The division of labors for responsibilities among the government at varied levels has not yet clearly identified on rural public service supply in Jiangxi The government has made efforts to improve the efficiency and effectiveness of administrative management on rural public service supply by means of administrative management system reform and fiscal reform. However, the division of labors for responsibilities among the government at varied levels has not yet clearly identified on rural public service supply in Jiangxi. Especially after the rural taxation reform in 2006, township 67

governments no longer have their own financial capacities to supply rural public services, but they are required to act as the agent of higher level governments to take charge of supply and management of rural public services. 3.3.2. Rural public service platform at community level should be strengthened to increase the quality and cost efficiency of the public services supplied to rural residents Establishing rural community service centers proved to be one effective way for rural residents receiving public services when farmers’ households are living scatter and quite far away from central towns. The centers can supply public services, such as primary education, clinic, commercial, information, cultural services, library, etc., in one platform. It does not only save the time and costs of the rural residents, but also helps increase the quality and cost efficiency of the public services supplied. Jiangxi Province has still been in an underdeveloped position in supplying public services through rural community platforms because of inadequate investment and uncoordinated planning for rural public infrastructure existed in current department based planning system. 3.3.3. The existing decision making mechanisms for allocation of rural public resources in Jiangxi easily lead to mismatch of supply with the real needs of rural residents. In spite of efforts made in involving farmers’ participation in the planning of rural public services in the past few years, the top-down departmental based decision making for rural public resources still dominates in Jiangxi. The new countryside construction pilots have partly increased the participation of rural residents in the planning of rural public goods, such as paved village roads, tap water supply and garbage disposal, which helps improve the quality and targeting of the public resources in the benefiting villages. However, the planning for supply of most of other public resources still follows the top-down decision making tradition. Mismatch of the supply with the real needs of rural residents gives rise to the distortion and misuse of the resources available. 3.3.4. Rural public resources in Jiangxi have not been integrated and utilized effectively. Owing to departmental based planning and management system, rural public resources in Jiangxi have not been integrated effectively. It is obviously reflected in the coexistence of redundant resource allocation in some areas with insufficient investment in other areas. Another related problem is the adequate utilization of the existing resources has not been emphasized while attention is more attached to construction of new infrastructure and facilities. 68

4. The Status Quo of Grassroots Organizations 4.1 The status quo of grass-roots political organizations In the New Countryside Construction Program, the operation of local administrative organizations at grass-roots level in Jiangxi province presented a number of new features. The comprehensive reform implemented in township and village characterized by greatly reducing the administrative organizations and lying off administrative employees generated great benefits but also carried out some problems. 4.1.1 The Reduction and integration in administrative organs at grass-roots level and lay-off of administrative employees From 2003, Jiangxi Province carried out reforms in eight areas, which focused on reducing the number of townships and villages, imposing compulsory education in rural areas and carrying out finance system in counties and townships. These reforms cut the number and simplified the levels of administrative organs in local community, laid off extra administrative employees, and thus optimizing the resources by saving administration cost, increasing work efficiency, lowering financial expenditures and alleviating peasants’ burden. By the end of 2006, 398 towns and 4400 villages were eliminated. The number of departments in local governments of townships decreased by 40% and 50,000 of administrative employees including 20,000 temporary employees were laid off. According to the official statistical data, in 1996, there were 20,925 village committees in Jiangxi Province. By the end of 2006, this number was reduced to 17,145, dropped by 18.06% compared with the number in 1996.

69

Figure 8: The change in the number of villagers’ committees in Jiangxi Province (1996-2005) 25000 20000 15000 10000 5000 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Source: NBS. 2007. China Rural Statistical Yearbook. China Statistics Press.

In our sample survey on 35 villages in 7 counties, we found that the average number of members of Chinese Communist Party (CCP) in each village is 41 with the highest reaching 103 and the lowest 5. The average number of CCP members whose ages exceed 50 in each village is 24, accounting for 57.49% of total CCP members. The aging trend on CCP members in village is becoming distinct. Moreover, the level of education of these CCP members is relatively low, with 39.61% just completing primary school education, 30.85% middle school education, 17.23% high school education and only 2.89% having technical degree or above. The percentage of male and female CPP members in village is 83.24% and 16.58% respectively. In each village, there are 5 villagers on average joining in villagers’ committee and CPP branch committee. These members usually had much better education background with more than 90% completing middle school education or above and 90% of them are CCP members. Some villages even employed university graduates as officials. Moreover, the family income of the villagers’ committee is much higher than the average income level. Up to now, as the extension of political authority, the villagers’ committee has been playing a vital role in administration management such as explaining policies from governments at upper level to villagers, maintaining social security, implementing family planning control policy. In the New Countryside Construction Program, many locals voluntarily 70

established the villagers’ councils, which are rural non-governmental organizations welcomed by government and established by rural residents. In the recent few years since its establishment, the villagers’ council has shown strong vitality and exerted great influence. These councils crossed the border of village and came to integration across villages. As villagers-elected and non-profit organizations, the villagers’ councils played an important role in economic, political, cultural and social construction. According to the survey on the operation of the villagers’ council as well as the evolution of the democracy system, 51.3% of the surveyed villages established the villagers’ council (Table 23). The components of members in the villagers’ council are described in the following table. Three kinds of members are most welcomed by villagers, the respectable villagers, representatives elected by villagers and the villagers’ committee members. This reflects the villagers’ demand for agents who invest voluntarily in public utility construction, engage in public utility management and improve the environment and image of village.

71

Table 23: Villagers’ expectation on member compositions of the villagers’ council (%) Option Villagers committee member Respectable villagers Member of CPP Member designated by governments at upper level Representatives elected by villagers Member with high literacy level Member with rich social experience The competent Member that do real work for villagers Member skillful at agricultural techniques Member who lead by example and do real work for villagers Impartial person (representing interests of different parties) Honest person Candid person Stable residents No idea Other Data source: own survey.

Frequency 1

Frequency 2

Frequency 3

Frequency 4

9.96

1.08

0.43

0.22

22.51 2.16

9.09 4.33

0.22 2.60

0.22 -

0.87

0.87

0.43

1.08

13.42

12.34

4.55

0.22

-

-

0.22

-

0.22

0.43

0.65

-

-

-

-

-

-

-

-

0.22

-

-

0.22 0.65

0.65

0.22

2.16 0.43

0.22 0.22 0.43 0.22

0.22 0.22

0.22 0.22

The villagers’ council with high expectation by villagers should fully play the following functions: assisting the villagers’ committee and CCP branch committee in rural governance; monitoring the construction and implementation of public utility projects; supervising the public expenditures; coordinating the decision-making and implementation of projects regarding New Countryside Construction Program; monitoring and managing public affairs in village and helping villagers improve livelihood and increase household income. These functions become the areas in which the villager’ council is highly expected and also indicate the future focuses of the villagers’ council after the finish of New Countryside Construction Program. 72

Table 24: Villagers’ expectation for the functions played by the villagers’ council (%) Functions available Assisting village committee and CCP branch committee in rural governance Monitoring the construction and implementation of public projects Monitoring the use of public funds Leading villagers become rich Coordinating the decision making and implementation of projects regarding the NRCP Monitoring and managing public affairs Negotiating as representative of villagers with government on issues concerned by villagers such as compensation for land expropriation Setting good example Advising on decision making of village issues Serving in the interests of villagers Technical consultation No idea Others Data source: own survey.

Frequency (1)

Frequency (2)

Frequency (3)

Frequency (4)

23.38

1.73

0.65

0.65

10.82

10.82

1.52

0.22

3.03

8.01

5.41

0.22

3.03

6.06

1.30

1.08

5.19

6.28

4.33

0.65

1.95

4.33

8.44

3.25

1.95

1.95

1.95

1.52

0.22

0.22 -

-

-

0.22 2.60 0.22

0.22

-

-

-

-

0.22 -

0.43

In the New Countryside Construction Program, compared with village committee, the villagers’ council contributes to the integration of the villagers’ interests, effectively achieving the self-management, self-discipline and self-development of villagers. Through developing top-down network with clear responsibility among villagers and the holding of regular council meetings, the villagers’ council acts as a communication bridge between the government and the villagers. It not only realizes the rural democratic governance but also guarantees the implementation of the New Countryside Construction Program. The villagers’ council has become a favorable 73

alternative to improve the rural governance. In spite of the huge potentials in the future development of the villagers’ council, its work is presently focusing on assisting the villagers’ committee and CCP branch committee in decision-making on public utility projects regarding the New Countryside Construction Program. 4.1.2 Relationship between reform on “Seven Stations and Eight Offices” and the status quo of public governance “Seven Stations and Eight Offices” is a general term that refers to all the organizations detached to townships by government departments at upper level. The main functions of these organizations are to provide social services on rural education, technological training, cultural development, public health and so on. Prior to the implementation of the Rural Tax and Fee Reform, the rigid combination of management by “Seven Stations and Eight Offices” and management by local township government characterize the rural public governance structure. The “Seven Stations and Eight Offices” play a very important role in the rural public governance and are responsible for providing the majority of public services in rural areas. Generally, the “Seven Stations and Eight Offices” consists of around 20 institutions in rural areas and this number is going to be reduced greatly due to the requirements of the Rural Tax and Fee Reform. For example, the Seven Stations and Eight Offices in Jiangsu Province are integrated and reduced to 6 to 8 departments. A great number of towns are undergoing this integration of “Seven Stations and Eight Offices” across the PRC. However, through our survey, we find Jiangxi Province presents a different picture. Although the “Seven Stations and Eight Offices” in most towns experience transformation, the number of institutions increases instead of decreasing in some places with the retention of existing institutions such as Land Management Station, Police Station, Station of Family Planning Control, Finance Station, Station of Business Administration, Tax Station, Broadcasting Station, Irrigation Works Office, Seeds station, Veterinarian Station, Agricultural Machine Station, Agricultural Technology Office, Justice Office, Power Supply Station, Education Office, Marketing Cooperatives, Health Station, Economic Management Office etc. and the establishment of new organizations such as Rural Cooperative Office and Social Security Office etc.. Hand in hand with local governments of township, these organizations participate in the public governance and provide a great amount of public services. 4.2 Relationship between new rural NGOs and the status quo of public governance 4.2.1 Relationship between new rural cooperatives and public governance After the completion of the Rural Tax and Fee Reform, the new 74

commonwealth organizations in Jiangxi Province undergo rapid development. The survey of 7 counties and 35 villages in Jiangxi Province indicates that 22.22% of surveyed villages established new commonwealth organizations. For example, at the end of 2008, Suichuan County has developed 52 Farmers’ cooperatives with peasants’ investment of CNY30.5 million and 967 members including 906 peasants, affecting 43930 non-member peasants. At the same time, the number of registered Farmers’ cooperative reached 59 in Xinfeng County involving 496 peasant members and affecting 21,490 non-member peasants. Table 25: Development and Components of peasants-related NGO in county of Suichuan, Xinfeng and Chongyi Farmers’ cooperative Societal Organization Crop Farming Animal Husbandry Industrial Mix of crop farming and animal components husbandry of farmers’ Processing industry of cooperatives agricultural products Service on agricultural machinery Data source: own survey. Type of organs

Suichuan 52 79 33 11 5

Xinfeng 59 50 4 2

Chongyi 34 -

2

2

-

1

1

-

The growth and development of new types of commonweal organization not only encourages the innovation vitality in rural society, but also contributes to the development of rural market economy, sharing of information technology and increase of peasants’ income. Currently, the Farmers’ cooperatives in Jiangxi Province are established on highly specialized and high risk industries such as animal husbandry, fishery, flowers and trees plantation, fruit and vegetables plantation for which Jiangxi Province has competitive advantage. The cooperation is non-diversified and concentrates on production technology and information sharing. The exciting message is that new opportunities of cooperation are being fostered which transform cooperation centering around production, primary processing and marketing to cooperation focusing on brand, circulation and value-added processing. According to statistical data, among the 1664 Farmers’ cooperatives in Jiangxi Province on 2007, 34.4% of which operates on comprehensive services combining production, primary processing and marketing, 23.3% operates on providing technology and information service, 19.9% operates on production service, 15.5% operates on processing service and 7% operates on transportation and storage service. Despite the continuous broadening of cooperation forms and areas 75

experienced by Farmers’ cooperative in Jiangxi Province, potential risks also exist in the new Commonwealth Organizations, including the lack of reliable and effective institutional arrangement, lack of management and supervision on areas of public governance, and inability to prevent and control risk. 4.2.2 NGOs in rural Jiangxi The rural NGOs in Jiangxi Province are at grass roots levels and formed by peasants spontaneously with the capable persons and the elites being their cores. These new organizations concentrate on providing public service and occasionally carrying out public governance activities. Its distinct character increases the peasants’ initiative not only to participate in the production but also to provide public goods, which improves the social management function. In the absence of local governments at grass-roots level, these organizations voluntarily shoulder the responsibility to supply and manage the public goods regarding education, health, road building and so on in the New Countryside Construction Program. 4.3 Democratization process and institutional restriction in rural public governance 4.3.1 Democratization process in rural public governance The democratization and institutional restriction in rural public governance are mainly realized through the direct election of village committee and the system “One Issue, One Discussion” that require each issue concerning peasants’ interest to be discussed. Started in 1988, the election system has been in effect for 20 years contributing greatly to the improvement of public governance in villages, highlighted by the fact that village officials become more responsible for peasants. It also increases the percentage of public expenditures in total village expenditures and lowers the percentage of administration expenses and village officials’ salary payment, laying a solid foundation for improvement in rural public governance. After the implementation of Rural Tax and Fee Reform, the system “One Issue, One Discussion” in village committee has become an important financing channel for public governance and public service projects based on the principle that reconciles right and obligation and emphasizes expenditures being born by beneficiaries. This will help accelerate the procedure of self-management by villagers and improve the livelihood of villagers, avoiding the rebound of villagers’ burden. Although the policy of self-governance has been implemented in villages for many years, the democratization process for public governance is not quite sound and the election of village committee is unregulated yet, which is acknowledged by 23.81% of surveyed villagers. Typical problems include soliciting votes through offering meals, member designation by township officials, open purchase of votes with cash, inappropriate voting 76

procedure and seeking votes by promising in appropriate future benefits (Table 26). Table 26: The existing problems in election of village committee viewed by the interviewed peasants (%) Options Purchase of votes with cash Seeking votes by offering meals Seeking votes by promising inappropriate future benefits Seeking votes by threatens Member designation by township officials Lacking transparency in voting Existence of formalism Voting for someone who has good relationship with you Purchase of position from town government Voting for relatives Absence of democracy Lack of full coverage by votes Lack of supervision on vote counting Lack of supervision on voting consequence Giving up vote because of working outsides inappropriate voting procedure No voting at all other Data source: own survey.

(1) 2.16 5.84 1.30 0.87 2.81 0.22 1.08 0.22 0.22 0.87 0.87 0.87 0.22 0.22 0.43 1.30 0.65 1.52

(2) 0.22 1.73 2.81 0.65 0.22 0.43 0.22 0.22 -

(3) 0.65 0.22 -

In the latest two elections inquired about in our survey, 80% of villages didn’t prepare booths for voters to make their choice in private (Table 27). The number of villages that didn’t call out the names voted on public doubled compared with that in 2005. Through talking with village officials about the latest two elections, we find that, due to the increasing number of laborers who are employed outside village, the voters’ turnover declined by 25% compared with that in 2005. As a result, the percentage of votes won by chairmen of villagers committee in total votes increased, but the actual number of votes won dropped at the same time.

77

Table 27: Summary on the latest two elections of villagers committee in the surveyed villages (%) Voting year

2005

2008

Voter turnover

99

74.46

Percent of votes won by chairman

69.7

82.88

Establishing private booths for voters to make a decision

yes

20.59

17.65

no

79.41

82.35

The two positions of chairman occupied by the same person

yes

29.41

14.71

no

70.59

85.29

Whether to call out the names voted on public

yes

85.29

61.76

no

14.71

38.24

yes

79.41

79.17

no

20.59

20.83

Existence of democratic financing team Data source: own survey.

As the main decision and supervision mechanism in the management of rural public affairs, the system “one issue, one discussion” face many problems in practice and frequently goes to two extreme situations: excessive emphasis on democracy leading to many obstacles in discussing public issues and the absolute dictation of all affairs by village officials. Based on our survey, the following problems are very common (Table 28). It’s difficult to call the villagers together for discussion sometimes. What’s more, some villages even have to pay the villagers for their participation in discussion. Even if the villagers participate actively, they frequently diverge on some minutia and are unable to come to an agreement with the simple majority of voters. The system “One Issue, One Discussion” required 2/3 of total votes to pass a proposal, which make the passing of proposals more difficult and result in lots of pending proposals. With the increasing meeting cost, villagers cast doubt on the rationality of “One Issue, One Discussion”. According to our survey, nearly half of villages surveyed didn’t implement the policy in any form in 2008.

78

Table 28: Situations of implementation of “One Issue, One Discussion” in the surveyed villages in 2008 Times

Frequency

0 213 1 48 2 78 3 42 4 17 5 19 6 6 Data source: own survey.

Percentage (%) 46.10 10.39 16.88 9.09 3.68 4.11 1.30

Times

Frequency

7 8 9 10 12 15 20

7 6 13 1 2 1 1

Percentage (%) 1.52 1.30 2.81 0.22 0.43 0.22 0.22

At the same time, the phenomenon that proposals are passed and implemented without discussion by villagers is not rare. For example, some villages raise money directly from villagers without passing the budget plans in the villager’s congress. Moreover, the discussion process of some village is not legal. They carried out discussion after the implementation of an issue. According to feedback from our questionnaire, 25.21% of villagers surveyed are unsatisfactory with the procedures of “One Issue, One Discussion”, advising improvements on discussion procedure, supervision, effect of implementation, fund use and votes-casting mechanism (Table 29).

79

Table 29: Suggestions of Villagers on “One Issue, One Discussion” Suggestions (1) Improving discussion 98 procedure Improving votes-casting 14 mechanism Improving 53 supervision Improving fund 23 use Improving effect of 36 implementation No need for 34 improvement Attention to villagers’ advices No idea 15 Don’t care 2 Others 3 Data source: own survey.

Frequencies (2)

(1)

(2)

Percentages (%) (1) (2)

2

2

21.21

0.43

0.43

20

1

3.03

4.33

0.22

37

13

11.47

8.01

2.81

44

15

4.98

9.52

3.25

30

20

7.79

6.49

4.33

1

-

7.36

0.22

-

-

1

-

-

0.22

1 -

-

3.25 0.43 0.65

0.22 -

-

4.3.2 Institutional restrictions in rural public governance In our survey on the specific items included in the disclosure board of public affairs, the answers of surveyed villagers show that 26% of villagers are indifferent to all items in the disclosure board, explaining the gap between the disclosed items and the villagers’ expectations (Table 30). We find the list that the villagers care the most includes village finance, family planning, infrastructure project development and poverty relief works, reflecting villagers’ attention to democratic management of village, village finance and interests of their own. It must be emphasized that village head and chairman assume the responsibility to promote the disclosure of village affairs and democratic construction through standardizing the disclosed items, updating disclosures, increasing work transparency, accepting supervision from government at upper level and villagers.

80

Table 30: Disclosed items of public affairs concerned by surveyed villagers (%) Item Election procedure of villagers committee Village finance Family planning Poverty alleviation works Approval of relief application Infrastructure project development State policy Allowance Knowledge of laws Security education Cultural activities No item cared about Data source: own survey.

Frequency (1)

Frequency (2)

Frequency (3)

Frequency (4)

25.76

2.81

0.65

-

22.73 5.19 1.08

23.38 6.93 3.90

1.08 12.34 3.68

0.22 3.68

0.87

1.73

3.90

2.16

1.52

6.49

4.33

3.25

3.25 25.97

0.22 0.22

0.22 0.22 0.22 0.22 0.22

-

Ranked second in the disclosed items of public affairs concerned by villagers, disclosure of finance has always been important and requires the inclusion of current income, expenditure, receivables and payables. At the same time, the subsidiary books have to be disclosed too. Considering 44.16% of surveyed villagers at an age of fifty or above and 47.40% with primary school education or even being illiterates, only 40.69% of surveyed villagers is able to read and understand the item of village finance, while the remaining 60% can’t understand, or don’t read at all, or can’t explain clearly or live in village without board of disclosed village affairs. Finance issue has always been a crux in rural democratic management that villagers care about the most. Poor management of rural collective fiancé will do damage to the rural social stabilization and become the breeding ground for corruption so that we have to improve financial transparency of village from multiple aspects, perfect financial regulations and endeavor to make financial information understandable, ensuring the healthy operation of financial disclosure. 4.4 The Advantages and Constraints for Public Governance at Rural Grass-roots Level in Jiangxi 4.4.1 Advantageous experiments in Jiangxi on rural grassroots governance Jiangxi has piloted some innovative ways for improving the rural governance in recent years, which will bring about some advantages for the progress in rural governance in the province. The innovations made in 81

Jiangxi on rural governance are mainly in two areas. The first one is that villagers’ councils have been formed and in operation in around 40,000 rural communities (natural villages) in Jiangxi Province during the process of new countryside construction since 2004. In contrary to the existing rural grassroots organizations, the villagers’ councils are formed and managed by villagers themselves in steady of initiation and nomination by the government. The villagers’ councils usually are formed by the capable villagers with good reputation and high prestige and also with more free time and willingness to work for their villagers because they work without pay. Most of the council members are retired teachers, doctors, cadres, or old farmers with high prestige either because of their capacities and reputation or because of their position in their patriarchal clans. The villagers’ councils are playing active roles in improving rural grassroots governance and promoting the democracy in rural communities by more effectively listening to and serving for rural residents, and by mobilizing and organizing the participation of villagers in the planning making, funding and construction of local public goods, such as village roads, water supply, garbage and sewage treatment as well as cultural centers. Another innovated pilot in rural grassroots governance is to explore the effective partnership of government with civil organizations in the village development planning for poverty alleviation. From 2005 to 2008, the ADB had assisted Jiangxi government in cooperation with China Foundation for Poverty Alleviation piloting government partnership with NGOs for village development planning in 22 poor villages in three counties in Jiangxi. The pilot aimed to improve the effectiveness of village development planning for poverty alleviation by involving NGOs in mobilizing and organizing rural residents to participate in the planning, implementation and monitoring of the village development planning in the piloting villages. These two innovated experiments have accumulated valuable assets for the improvement in rural grassroots governance in Jiangxi in the future. 4.4.2 Major constraints for rural governance Jiangxi Province has the rural grassroots governance structure similar to that in other provinces of the country and is also confront with similar challenges because of the dominating administrative hierarchy in operation in the whole country. The major problems existed in rural governance in Jiangxi are in following areas. First, the division of labors among governments at varied levels on their duties and responsibilities are still not clearly identified, leading to the coexistence of strong central government and relatively weak local governments. The county and township governments in Jiangxi are comparatively weak in terms of the financing and planning capacities and cannot provide sufficient supports for rural community development. Second, the recent reform on rural financial administration system 82

further weakens the capacities of grassroots governments in public administration. In order to strengthen the supervision on finance at rural grassroots, the finance management authorities at townships and villages have been taken over by their upper governments in Jiangxi, therefore, there comes the township finance supervised by county governments and village finance supervised by township governments. Third, the department based vertical administration system has been restricting the normal functions of rural public administration departments. It is found from own survey of farmers’ households that most of the interviewed farmers have rarely accessed to the services provided by the township departments (Table 31). Fourth, there are still a lot of institutional barriers which restrict the development of civil organizations in rural areas, including registration, financing, human resources, and supervision of organizations. Fifth, the rights of villagers’ committee are not fully assured because of the intervention from township governments. According to the existing law, the villagers’ committee is a grass-roots autonomous organization with villagers’ self-management, self-education and self-service. But in fact, the township governments still often interfere the important affairs in villages and make the villagers’ commission lose the complete autonomies. In addition, it is still not clear how the well functioned villagers’ councils continue to play their roles in rural governance after the conclusion of NCCP. Table 31: Services provided by township organizations Organization Agricultural Technical Extension Station Forestry Service Station Fruit Service Station Aquatic Product Service Station Water Affairs Management Station Agriculture Machinery Management Station Economic Operating and Management Station Judicial Administrative Stations Cultural Station Broadcasting Station Family Planning service Station Rural Pension Insurance Management Station Data source: own survey

Heard or Not

Contact Frequency with the organization Never Seldom Always

Yes

No

77.49

22.29

35.06

23.81

22.94

61.90 35.06 32.47

37.66 63.85 66.67

49.57 36.58 38.96

14.29 8.66 5.19

4.98 2.81 1.30

57.58

41.77

46.32

15.58

3.03

50.00

49.13

40.48

14.94

2.38

23.38

75.54

31.39

5.84

1.08

56.49 56.49 52.38 92.42

42.42 42.21 46.10 7.14

51.73 50.43 46.75 33.98

11.26 9.96 11.69 35.71

1.95 4.11 2.60 22.73

42.42

55.19

43.94

5.84

3.68

83

5. Current Situations of Environmental Protection in Rural Jiangxi 5.1 Natural conservation There are two general types of natural conservations in Jiangxi Province, land conservation and wetlands conservation. The land conservation started since 1975, when the Jiulianshan Mountain, Guanshan Mountain, and Wuyishan Mountain were set up as natural reserves. Up to June 2008, totally 162 natural reserves, with over one million hectares, have been established, of which 8 are national level, 18 provincial level, 136 city and county level; micro-natural reserves more than 1,000, with 200,000 hectares, have been established;2 99 forest parks with 441,100 hectares, above provincial level, have been established. All of those conservation areas together account for 10.2% of the total areas of the province, forming a quite complete network of natural conservation, and various types of the eco-systems, 90% of the wildlife, 95% of the plants, most of the natural forests, and forests for water conservation in the riverheads are protected. Jiangxi has a mild weather and abundant rainfall. The unique geographical and geomorphic feature forms the integrated wetland eco-systems. Jiangxi’s wetlands have the following characteristics. First, the area is large, totally 3.65 million hectares, accounting for 5.2% of the country’s total wetlands and 21.87% of the province’s total areas, respectively. Of the total wetlands, water area is 1.65 million hectares, 9.8% of the province’s total areas; natural wetlands are 1.17 million hectares, 6.9% of the province’s total areas. Second, the types are various. According to the cataloguing system in the International Convention on Wetlands, Jiangxi has 23 types of wetlands, 14 natural and 9 artificial, respectively. Third, the biodiversity is abundant. Within the wetlands, there are 705 higher plants, 12 of which are under special state protection; there are 636 vertebrates, of which 17 animals, 332 birds, 40 Amphibians, 44 reptiles, and 208 freshwater fishes; there are 66 wetland animals under special state protection, of which 13 1st class species and 53 2nd class species. In addition, there are 103 shellfish and 24 Shrimps and crabs. Poyang Lake is the largest area in Asia for Migrant birds spending winter. Every year around one million migrant birds spend winter here, of which around 4000 grus leucogeranus, and 2800 Ciconia boyciana, accounting for over 95% and 85% of the total numbers in the world, respectively. Fourth, the function is great. The average volume of water flowing into the Yangtze River from the Poyang Lake is 142.7 billion m3 per year, accounting for 15.5% of the Yangtze River’s annual runoff, playing a great role in water storage during 2

The rural communities have habits to conserve natural forests. By the way of self-establishment, self-management, and self-benefits, the residents establish the natural forests surrounding the villages into micro conservation areas. Those conservation areas are small individually, but many of them together, would have a positive influence on the regional eco-environment.

84

flooding period and in the protection of ecological functions. In early 1980s, Jiangxi built the first provincial natural reserve of wetlands, Poyang Lake reserve for migrant birds. Till now there are 23 wetland reserves within the province, with an area of 234,800 hectares, of which one is significant worldwide, two significant nationwide, three provincewide and 18 countywide. There are four built and building national wetland parks, with an area of 51,500 hectares. In addition, there are a group of small areas for wetland protection. A system of natural wetland protection has primarily formed. In October 2006, Jiangxi established the first provincial institution for wetland protection, the office of wetland protection and management, within the Forestry Department of Jiangxi Province, and Issued the Regulations on the Protection of the Poyang Lake Wetland and other rules and policies. On 20 August 2008, the provincial government of Jiangxi issued its Administrative Measures of the Wetland Parks in Jiangxi, which is earlier than the Central government’s Administrative Measures of the Wetland Parks. For this reason, the Jiangxi provincial government earned high marks from the State Forestry Bureau. Regulations on the Wetland Protection in Jiangxi (draft) has been listed in pool of planning and projects of the Social and Legal Affairs Committee, National People's Congress, Jiangxi Province. During the World Wetland Day between 2007 and 2009, Jiangxi conducted three theme publicity activities, “Wetlands support the healthy development of the fishery”, “Healthy wetland, Healthy Human Beings”, and “The Wetland Connecting You and Me, from the Upper Reaches to Lower Reaches”; the Website of Jiangxi Wetlands started operating. In addition, the various publicity activities during “Bird Protection Week” and “Wildlife Protection Month” created a good atmosphere for the wetland protection. By the development of the community economy, the degree of the residents depending on the wetlands is reduced; by the community co-management and strict law enforcement and coordination between the relevant government departments, a composite force is formed for the wetland protection. The present problem is that, the numbers of the natural reserves are few in the riverheads of the second and third tributaries of the five major rivers, the middle and southern parts of the Wuyishan Mountains, where biodiversity abundant, and Ganzhou, Ji’an, Yichun, and Fuzhou, where the comparative advantage of resources, are obvious. Most of the natural reserves are the major areas for forest ecology and wildlife, but too few for wild plants. This situation does not match reality that Jiangxi has various valuable and rare plants (and plant communities). Only 6% of the natural reserves have management institutions and full time staff; 52% of the natural reserves are managed by the wildlife protection stations, forest stations, forest parks, and town or township governments; and the other 42% have no management agencies. The management of the natural reserves is not listed in the plan of local development, which limits the 85

construction and development of the natural reserves. 5.2 Ecological repair During the 11th Five-Year Plan, Jiangxi plans to retire land from cultivation and plant trees and grass for 147,000 hectares, of which steep farmland over 25 degree is 92,000 hectares, desertification farmland of 51,000 hectares, sloping farmland between 15－25 degree 4100 hectares. During 2010－2020, the planned farmland converted from farming to forests is 187,000 hectares, of which steep farmland over 25 degree is 76,000 hectares, desertification farmland of 20,000 hectares, sloping farmland between 15－25 degree 91,000 hectares. According to the results of county-level self-survey conducted at the end of 2006, the total project area of converting farmland into forest land is 510,000 ha, of which 98.7% are conserved. The total afforestation within the project area is 200,000 ha, of which 99.7% are conserved. The eco-forests 180,000 ha, accounting for 90.4% of the conserved area, while the economic forests 19,000 ha, accounting for 9.6%. The afforestation on the previous waste mountains and hills is 277,380 ha, of which 98% is conserved. The area closed off for tree growing is 33,000 ha. Totally the trees planted are over 120 species, of which slash pine and liquidambar formosana 27,000 ha, popular, alder, and camellia 13,000-20,000 ha. At present, at present, the citrus trees, gardenia, and other economic forests and double-purpose forests have started coming into play. It is predicted that the unit income will be more than the subsidies for the implementation of the project. For example, the yearly income of camellia oil would be CNY7,500 per hectare. There are 3 systems worthy of attention in the practice of the project to convert the farmland into forests. The first one is the announcement system. The second one is the supervision system, which is enforced at two government levels, and each has their own responsibilities. The supervision groups from the city government supervise 80% of the project area implemented by towns and townships, of which over 50% must be done on the spots. The supervision groups from the county government must supervise all the afforestation teams on the spots. The third system is the management and protection one. In order to prevent any damage by human beings and domestic animals, there have been more than 1,100 towns and townships within the project area closing off hills and forbidding anyone entering the afforestation areas. There are also some problems needing attention. The major problem in Jiangxi’s eco-environment is the severe erosion on the forest land, but not the low forest coverage. Therefore, it should make more efforts to manage and protect the present forests, instead of spending much more money to increase one percentage point of forest coverage – the lowest cost to plant 86

trees on those hard areas has been over CNY7,500 per hectare, even more than CNY21,000 per hectare in some areas. Because of the abundant rainfall and intense precipitation, sloping farmland is the major source of erosion. Up to now, there has not been much sloping farmland left. In order to maintain the status of major grain areas for the country, also for the residents’ livelihood, it is not proper to simply convert the left sloping farmland into forest land. 5.3 Water and soil conservation Jiangxi is located in the south bank of the middle and lower reaches of the Yangtze; the soil is red and easy to be eroded by water. According to the data collected by remote sensing in 2000, the total erosion area is 3.35km, accounting for 20.1% of the provincial total area and 33.3% of the provincial mountainous area, respectively. Of the eight south red soil provinces, Jiangxi, Fujian, Zhejiang, Guangdong, Hainan, Hunan, Hubei, and Anhui, Jiangxi ranks third in the erosion area, ranks second in proportion of erosion area in the total area, and ranks first in the erosion intensity, which is 10,800 km. Of the total erosion area, intense erosion and above is 32.3% in area, soil lost 165 million ton per year. Also according to the remote sensing, there are over 48,000 sites collapsing in hill areas in 2000; the erosion area is 21,000 ha, and the direct losses are over CNY2 billion. Of the 42 counties with severe erosion, 35 are poverty counties. Since the 1980s, Jiangxi has successively implemented a number of soil and water conservation projects, such as one of the eight national priority soil and water conservation projects, major soil and water conservation projects within the upper and middle reaches of the Yangtze watershed, the first period of major soil and water conservation projects within the Poyang Lake watershed, and the pilot project of national soil and water conservation and ecological repair. With the central government’s financial support and promoted by the market mechanism, the treatment and development of the “four barren areas” (barren hills and mountains, barren water, barren beaches, and barren land) are speeding up. The yearly treated area is around 70,000 ha during the period of the 7th Five Year Plan (FYP); 133,000 ha during the 8th FYP; 200,000 ha during the 9th FYP, and more than 200,000 ha during the 10th FYP. During 1991-2007, Jiangxi has totally treated erosion areas over 3.22 million hectare, built nearly 240,000 projects and sites for soil conservation and erosion treatment. There has been a batch of different sized demonstration areas for micro watershed comprehensive treatment and soil and water conservation. The industry of soil and water conservation has formed; navel oranges, tangerine oranges, and camellia oil distribute from the south to north, and have exerted good social and economic benefits. 5.4 Protection of rural environment 87

Development of clean energy Up to the end of 2007, the households using methane have reached to 1.34 million; 1218 methane projects have been built in various livestock farms and various processing factories, households demonstrating methane eco-agriculture have reached 450,000. Totally 509 million m3 of methane is produced yearly, equal to producing 360,000 ton standard coal per year. Stoves saving coal and firewood are primarily popularized, saving 740,000 to standard coal per year. By the two items mentioned above, more than CNY1.6 billion can be generated or saved per year. Garbage treatment In recent years, Jiangxi has implemented the rural environment improvement project. The contents include cleaning up garbage, dirty mud, and road-blocks, and improving water supply, toilets, and roads. In 2009, in order to further raise the garbage management level, realize the goal of significantly improvement in rural environment" and meet the requirement of “clean and tidy, pollution-free disposal, simple and practical and welcome by the masses" the "3 +5" mode of rural waste-free damage processing was been introduced. The so-called "3+5" model means there are three main bodies of responsibility and five kind of solid waste disposal methods. The three main bodies of responsibilities include farmers, cleaners and villager council. Among them, the responsibilities of the farmers are responsible for general cleaning, green covering and keeping good environment in front of their house, to ensure no garbage and no sewage overflow and sundries piled up neatly in the courtyard, lawn and surrounding their houses; responsible for cleaning health of reservoirs, drain contracted by them in the village or townships; responsible for waste classification and placed in designated locations. The responsibilities of the cleaners are responsible for supervision of waste classification; responsible for health cleaning, garbage removal and regular litter in the designated public places; responsible for collecting the recyclable waste sorted by farmer households and transacting with the personnel of the recycling company. The responsibilities of the villager council are responsible for the management of garbage harmless disposal; responsibility for supervising the daily work of the cleaners. The five kinds of garbage disposal paths are: (i) kitchen waste, which is made for organic fertilizer or clean fuels through composting; (ii) recyclable waste, which accounted for 60% of rural garbage, including six categories i.e., metal, paper, glass and ceramics, plastics, rubber and hairs; (iii) civil engineering waste, which is dumped by former households to the designated place of the village or town; (iv) hazardous waste, which is transported to the designated place for storage or treatment according to environmental requirements; and (v) the other garbage, which is incinerated. Of which, plant waste such as litter is incinerated in the farm field as ash fertilizer, scrap fabric and other chemical fiber is sent to the high-temperature incinerator to incinerate. 88

Till May 2010, the pilots for rural garbage treatment have been expanded to 52,879 villages, 564 townships, accounting for 25% of the total villages and townships in Jiangxi Province. Enhancement of preventing and controlling agricultural soil contamination Based on survey of contaminated soil, it should establish the system of soil environment quality assessment and monitoring, enhancing the prevention and control of soil contamination. It should strictly control the behavior of using sewage to irrigate the grains and vegetables in the major production regions. It should demonstrate the repair of contaminated soil. The farmland that have been heavily polluted cannot repaired should change for other purposes. It should establish networks of soil environment monitoring. The monitoring stations at province and city levels should have the necessary equipment for soil sampling, keeping the samples, and pre-processing, advancing their capacity to monitor and analyze the soil. 5.5 Comparative Advantages and Problems in Rural Environmental Protection in Jiangxi 5.5.1 Comparative advantages in the rural environment Jiangxi has a unique ecological advantage in the central region. Using an index specially developed for comparing the economical and ecological coordinated development among regions, economic ecologicalization index, which was composed of 12 indicators in three dimensions, i.e., resource consumption, eco-environment, and ability to protect the eco-environment, it is found that Jiangxi ranks first in the economic ecologicalization level in the central region and (Table 32). Specifically, Jiangxi’s comparative advantages in eco-environment are mainly reflected in the environmental quality and ecological conditions. Jiangxi has comparative advantages in environmental quality in four areas. First, there is better air quality in Jiangxi. The air quality monitoring data of provincial capitals show that the average days with air quality higher than the grade two are 338 days a year in Nanchang, more than those in the other provincial capitals in the central region. Second, there is better water quality in Jiangxi. About 77.2% of the major rivers in Jiangxi are of water quality no lower than grade three, much higher than the national average, 49.9%. Third, Jiangxi Province is of lower intensity of sulfur dioxide. In 2006, the average amount of sulfur dioxide discharged was 3.8kg per square kilometer in Jiangxi, lower than it in the other provinces in the central region. Fourth, losses caused by pollution are less in Jiangxi, too. In 2006, the direct pollution losses per hundred million value of output were CNY120 in Jiangxi, far lower than the country’s average, CNY640, and also lower than that in the other four central provinces, except for Henan. Jiangxi has also owned better ecological conditions than other provinces in the central region and the country as a whole. First, Jiangxi has 89

higher proportion of land covered by wetlands. In 2006, the wetlands in Jiangxi were about 10,000 square kilometers, 5.99% of the province’s area, higher than those in other provinces and in the country. Second, Jiangxi has larger percentage of land covered by forests. In 2006, Jiangxi’s forest coverage accounted for 60.05% of its total land areas, much larger than that in other central provinces and the country’s average. In addition, Jiangxi has area of natural reserves of 9230 square kilometers, accounting for 5.5% of the provincial total areas, which is just lower than Shanxi, ranking second in the central region.

90

Table 32: Economic ecologicalization index in Jiangxi and other provinces in the central region, and the country as a whole (Value of index) Weight

National average 16.5 5.0

Jiangxi

Shanxi

Anhui

Henan

1. Resource consumption 30 15.5 12.8 13.3 14.8 (1) Energy consumption per CNY10,000 10 4.7 2.2 4.4 3.4 industrial added value (2) Water consumption per CNY10,000 total 10 2.3 1.4 5.0 1.6 3.4 output value (3) Land areas occupied by industries, mines 10 5.0 4.5 3.9 2.9 4.2 and residential areas per CNY10,000 total output value 2. Eco-environment 30 16.1 17.6 8.6 11.2 14.3 (1) % water with quality higher than grade 3 in the 9 3.0 4.7 1.0 1.5 3.2 major rivers (2) COD discharged per square kilometer 7 4.0 2.1 2.4 1.8 1.4 (3) SO2 discharged per square kilometer 7 4.0 2.8 1.1 2.6 1.1 (4) Ratio of losses aroused by pollution to the 7 0.6 3.0 0.2 0.5 4.0 total output value 3. Ability of environmental protection 40 9.5 10.4 8.9 6.3 6.1 (1) Ratio of actual farmland areas to the planned 8 (2) % total land areas covered by natural 8 4.0 1.4 1.8 0.9 1.1 reserves (3) % total land areas covered by wetlands 8 2.7 4.0 2.1 3.2 2.5 (4) % total land areas covered by forests 8 1.3 4.0 1.0 1.7 1.2 (5) % water and soil erosion areas being 8 controlled Data source: NBS. 2007. China Statistics Yearbook 2007. China Statistics Press; NBS and National Ministry of Protection. 2007. China Statistics Yearbook on Environmental Protection. China Statistics Press. 91

Hubei

Hunan

13.9 3.8

14.2 4.6

1.8

1.4

4.8

4.4

12.1 1.8

13.5 5.0

1.8 2.6 1.8

1.4 2.5 0.5

8.3

10.3

1.4

1.3

3.3 1.9

3.9 2.9

Environmental

5.5.2 Major problems in the rural environment protection Overuse of Chemical inputs The development of the arable land in Jiangxi Province is already nearing its limits. In addition to the rapid expansion of fruits and vegetables that need a lot of chemical fertilizers and pesticides, the agricultural growth is increasingly relying on chemical fertilizers and pesticides. At present, Jiangxi has become one of the provinces that largely use chemical fertilizers and pesticides. The average amount of chemical fertilizers and pesticides used in Jiangxi Province is 52.7 ton/km, over 30% higher than the country’s average, 40 ton/km, and nearly 2.4 times as high as the safety limits defined by the developed countries, 22.5 ton/km. The over-used chemical materials remained in the soils, surface waters and groundwater threaten the survival of the fish, the amphibious animals, and the water fowls. Irrigation with polluted water There are 482 million hectares of farmland irrigated by polluted water, accounting for 1.61% of the total farmland in the province, of which 9.59% were irrigated by heavily polluted water. Irrigation with polluted water not only reduces the yields of the agricultural products produced, but also hurts the qualities of the products and the soil. Contamination of livestock excretion The excrement and urine of livestock’s are produced 60 million ton a year in Jiangxi. Along with the increase of the animal husbandry of larger scale and less and less livestock excretion returned to the farmland as manure, more and more nitrogen and phosphor are directly released without any disposal and polluted the air and water, and the pathogens in the excretion will threaten the people’s health. Lower forestry quality In spite of higher forest coverage Jiangxi Province has, the quality of forestry in the province is still comparatively low. First, the stock volume of forests in Jiangxi is only 31.3 cubic meters per hectare, or 40.8% of the country’s average. Secondly, the structure of the forests in Jiangxi is unreasonable. Most of the forests in the province are planted for timber and few for shelterbelt and special-purpose. In the forests for timber, the majorities are coniferous forests and few are broad-leaved forests, which is not good for the conservation of biodiversity. Third, the forests in Jiangxi are mainly concentrated in mountainous areas and the upper stream areas leaving the central and northern basins and the middle and downstream areas covered with few forests. Soil Erosion Jiangxi is one of the southern provinces with heavy erosion. After years’ control and treatment, the erosion areas in Jiangxi has declined largely, but still account for 20.1% of the total provincial areas and 33.3% of the mountainous and hill areas. The eroded soil enters into and fills up the rivers, 92

lakes, and reservoirs, weakening the function of the water projects for distribution and storage of water resources and the ability of the rivers to discharge flood. Within the past 60 years, the navigable waterway in Jiangxi has shortened for nearly 9000 km. The upper reaches of the five major rivers in Jiangxi, Ganjiang River, Fuhe River, Xinhe River, Raohe River, and Xiuhe River, have almost lost any navigation capacity. The volume of the 9268 reservoirs declines by over 10 million cubic meters per year, which is equivalent to missing a reservoir of middle size every year. Invasion of exotic species The exotic species in Jiangxi are mainly ragweed, alligator alternanthera, and water hyacinth. The areas invaded are about 7000 hectare by ragweed, 6,000 hectares by alligator alternanthera, and 20 hectares by water hyacinth, respectively. 6. Overall Assessment of the Rural Development in Jiangxi This section is going to provide overall discussion and analyses of the development status in rural Jiangxi after sector based analyses have been made in the prior sections. The analyses focus on the income and living expenditure of the farmers’ households, the rural development pattern and the change of integrated rural development status in Jiangxi. 6.1 Income and living consumption of farmers’ households in Jiangxi 6.1.1 Overall situation of income growth of the farmers’ households in Jiangxi The per capita net income of farmers’ households in Jiangxi since the economic reform has increased from CNY141 in 1978 to CNY4,697 in 2008 (Figure 9). It is multiplied by 6.7 times or increased 6.54% annually in real terms. Except for in 1986, 1988, 1989 and 1998, the farmers’ income in Jiangxi has been increasing in absolute term. The growth of farmers’ income Jiangxi in the last three decades has had three periods of steady growth. The first stage is from 1978 to 1985, when the farmers’ income had increased 9.4% annually. The second stage is from 1990 to 1997, when the farmers’ income had increased 6.24% annually. The third stage is from 1999 up to 2008, when the farmers’ income had increased 6.33% annually. The tracks and reasons of growth of farmers’ income in Jiangxi has been consistence with those for the country as a whole. The growth in the first stage was due to the reform of rural economic management system and increase of agricultural inputs such as fertilizers and improved varieties. The growth of farmers’ income in the second stage was related to the increase of purchase prices for agricultural products and the fast growth of TVEs. In the third stage, farmers’ income growth was the results of increase of employment in cities, the increase of minimum purchase prices for major agricultural products, agricultural industrialization and the increase of 93

budgetary expenditure in agriculture and farmers’ welfare. Figure 9: Change of farmers’ income in Jiangxi in 1978-2008 5100 4600 4100 3600 3100 CNY

2600 2100 1600 1100 600 100 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 Year

Data source: Jiangxi Bureau of Statistics. 2009. Jiangxi Statistics Yearbook 2009. China Statistics Press.

Probably it is because the reasons underlining the growth of farmers’ income in Jiangxi have had no difference fro those for the country as a whole, the difference of farmers’ net income per capita between Jiangxi and the national average has almost not changed in the last 30 years. Apart from a few years, the per capita net income of farmers’ households in Jiangxi has been slightly lower than national average (Figure 10). The per capita net income of farmers’ households in Jiangxi in 2008 was 98.66%of the national average.

94

Figure 10: Per capita farmer’s net income in Jiangxi and PRC (1978-2008) 5000 4500 4000 3500

CNY

3000 2500 2000 1500 1000 500 0 1978

1980

1985

1990

1995

Jiangxi

2000

2005

2007

2008

National

Data source: NBS. 2009. China Statistics Yearbook 2009. China Statistics Press; Jiangxi Bureau of Statistics. 2009. Jiangxi Statistics Yearbook 2009. China Statistics Press.

6.1.2 Explaining the growth of farmers’ net income in Jiangxi Change in the income sources The change in the income sources of farmers’ households in Jiangxi from 1999 to 2007 has been surprisingly similar to that for the country as a whole. During the period the income from wages and salaries in Jiangxi had increased by 10.96 percentage points, the income from household operation declined by 10.88 percentage points, the property income declined by 3.25 points and the transfer income rose by 3.16 points (Table 33). In summary, the income household operation has contributed over 50% of the farmers’ net income in spite of large reduction of its share. The income from wages and salaries has increased rapidly and contributed about 40% of the farmers’ income. The transfer income has increased very fast though its share has been not very big. Compared with the change in the country as a whole, the reduction of the income share of household operation in Jiangxi has been smaller than the national average and most central provinces.

95

Table 33: Change in the farmers income sources in 1999-2007 Income from Wages and Salaries

Income from Income from Income from Household Properties Transfers Operations 1999 28.51 65.53 4.53 1.43 National 38.49 57.19 3.43 0.89 Shanxi 24.77 69.45 4.86 0.93 Anhui 28.88 65.59 4.63 0.90 Jiangxi 20.96 74.33 3.32 1.40 Henan 22.39 72.01 4.85 0.74 Hubei 33.22 63.50 2.79 0.50 Hunan 2007 38.55 52.98 3.10 5.37 National 41.49 50.75 3.70 4.05 Shanxi 41.34 51.20 2.87 4.59 Anhui 39.84 54.71 1.38 4.07 Jiangxi 32.91 62.27 1.37 3.45 Henan 36.39 59.53 0.94 3.14 Hubei 43.86 50.30 1.02 4.82 Hunan Data source: NBS, 2008, China Survey Yearbook of Rural Households 2008, China Statistics Press.

Contribution of different sources of income to income growth The available data for farmers’ household income and expenditure from 2003 to 2008 in Jiangxi can be used to analyze the growth of income by items over time and their contributions. The per capita net income of farmers’ households in Jiangxi has increased 58.15% from 2003 to 2008 (Table 34). The income from household operation, which has been the largest source of income in Jiangxi, has increased 55.6%. The income from wages and salaries, the second largest source of income, has increased 49.14% during the period. The income from properties and from transfer has increased 90.32% and 197.24% respectively over the time.

96

Table 34: Growth and sources of farmers’ net income in Jiangxi (2003 – 2008)

58.15

Contribution to income growth % 100.00

49.14

35.15

20.02

1.71

(1) salaries of township and village officers

26.59

1.34

(2) salaries of teachers

12.49

0.33

(3) salaries of staff in government organizations

5.01

0.04

2.Income from employment in the resident township

147.32

17.81

111.62

5.43

-8.26

-0.02

176.83

12.39

30.70

15.63

122.86

2.16

49.47

1.96

25.61

11.49

4.99

0.02

55.60

52.81

57.27

43.99

(1) crop planting

78.68

43.08

(2) forestry

33.51

1.58

(3) livestock

-11.82

-1.79

(4) fishery

50.85

1.12

48.52

8.83

88.32

5.15

(1) Industry

99.94

2.43

(2)

80.02

2.72

29.77

3.68

90.32

1.83

933.10

0.99

Growth rate % Total net income i. Income from wages and salaries 1. Income from non business

(1) from enterprises (2) from capital investment of the government (3) others 3. Income from migrated employment (1) in the resident county (2) in the resident prefecture but out of the resident county (3) in other provinces (4) overseas ii. Income from household operation 1. Income from agriculture

2. Income from non-agricultural sectors A. Secondary industry construction

B. tertiary industry iii. Income from property Interest 97

iv. Income from transfer 1. remittance from family member who share same household registration but reside out of home for most of the time in the year 2. presents from relatives and friends in cities

297.24

10.21

31.81

0.34

43.72

0.12

3. pension

217.73

1.10

4. living support costs offered by relatives in city 5. living support costs offered by relatives in rural areas 6. relieves, consolation, disaster relieves, compensation for reforestation and fund for poverty alleviation 7. reimbursed expense for medicine

160.30

0.12

81.92

0.33

-58.93

-0.22

1,301.38

0.78

-69.16

-0.18

1,737.01 -

7.18

-

0.18

8. compensation 9. others Of which: grain production subsidies Subsidies for purchasing agricultural materials

3.44

-

Subsidies for using improved varieties 1.40 Note: the growth rate and contribution are calculated using comparable prices. Data source: Jiangxi General Survey Department. 2009. Annual Report of Rural Households.

When income sources in detail are taken into account we can find larger variation involved among different sources: (i) the agricultural income in the income from household operation has increased 57.27% from 2003 to 2008, among which the income from crop planting increased 78.68%, income from forestry and fishery increased 33.51% and 50.85% respectively while the income from livestock declined 11.82%; income from non-agricultural sectors has increased 48.52%, among which the income from secondary industry increased 88.32% and the income from tertiary industry increased 29.77%; (ii) the income from employment within the resident township has increased 147.32% during the period, among which the income from employment provided for others rather than enterprises and state capital investment projects increased 176.83%; the income from migrated employment has increased 30.7% in which the income from employment within the resent counties increased 122.86%; (iii) the interest income increased for 9.3 times during the period; and (iv) the income transferred from the state, including the subsidies on grain production, for purchasing agricultural materials and for using improved varieties, as well as the reimbursement of medicine expenses due to the establishment of rural cooperative medicine system, were not existing in 2003. The crop planting has contributed 43.08% of the growth of farmers’ net 98

income from 2003 to 2008. If the subsidies which are directly linking to crop planting are accounted together, the contribution from crop planting to the growth of net income in Jiangxi was about 50%. It indicates the importance of crop planting to the income generation in Jiangxi in the one hand and implies that there involved risks in the continuation of the new round of growth of farmers’ income in Jiangxi because the growth of income in crop planting has been confronting with the natural and market shocks. The second largest contribution of the income growth was from the income from employment provided for others rather than enterprises and state capital investment projects, which mainly refers to the income earned from services provided among farmers, or short agricultural employment within the community. It indicates that the demand of community for agricultural employment has increased largely with the increase of migrating employment. The growth of income from migrated employment has made the third largest contribution to the growth of farmers’ income in Jiangxi from 2003 to 2008. The fourth largest contribution comes from the transfer income from the state on supporting agricultural development. The contribution of the four largest sources accounted for about 3/4 of the growth of farmers’ net income in Jiangxi during the period. The others contributed the remained 1/4 of the income growth. Efforts are further made to explain the sources of income growth of farmers’ households in Jiangxi by looking into the factors underlining the growth of four largest sources of income. The analyses started from the income from crop planting. It is assumed that the growth of income in the crop planting can be attributed to the change in the sowing areas, the change in productivity in terms of yield per unit of land, change in the composition of total sowing areas and the change in prices for produced products. The gross income of crop planting in Jiangxi was used as a proxy for net income to explain the growth of crop planting income because of lacking available break-down data for net incomes of varied crops. It was found that the grain contributed 64.29% of the growth of gross income in crop planting from 2003 to 2008 (Table 35), gardening products contributed 13.34% of the growth in gross income, oil crops and vegetable contributed 6.9% and 6.98% of the growth of gross income during the period. The income from these four crops accounted for 91.5% of the growth of income in crop planting during the period. Therefore, our analyses focus on the growth of income from the four crops.

99

Table 35: Growth rate and contribution of gross income of crop planting 2003-2008 (%) Income sources

Growth rate

Contribution to growth of gross income of crop planting

Grain

114.27

64.29

Cotton

117.18

2.12

Oil crops

80.33

6.90

Fiber crops

129.42

-0.07

Sugarcane

-88.18

-0.42

Tobacco

-47.14

1.73

Vegetable

201.81

6.98

50.19

3.67

1480.81

1.42

78.51

13.34

556.62

-0.05

-42.30

0.00

Other crops

40.52

-0.77

Collected wild plants

-57.26

0.02

Side products

103.98

0.18

12.11

-0.15

Flower and horticultural products Melon and fruit Gardening products Tea and other drinking products Flavors Medicine herbs

Processing using the crops

0.50

Special products -49.67 0.30 Data source: Jiangxi General Survey Department. 2009. Annual Report of Rural Households.

For the sake of simplification, only rice has been taken into account among the grain crops because rice accounted for over 90% of the sowing areas and outputs of grain in Jiangxi (Table 36). The sowing areas of rice have increased 19.49% from 2003 to 2008. During the period the yield per mu increased 10.66%, the price for rice increased 164.25%. The contribution of sowing areas, yield per mu and the price to the increase of rice income was 16.63%, 10.87% and 72.5% using the index decomposition method. It means that the rising of rice price was the key factor contributing to the growth of income from rice.

100

Table 36: Change in the agricultural production of each household in 2003-2008 2008

2003

Increments

Change rate %

Sowing areas (mu) i. Grain 0.32 16.78 2.22 1.90 Of which: rice 0.35 19.49 2.15 1.80 ii. Cash crops 0.03 6.20 0.54 0.51 1.cotton 0.03 78.97 0.06 0.04 2.oil crops 0.03 11.54 0.24 0.22 3.tobacco 0.00 24.85 0.01 0.01 4.vegetables 0.00 0.50 0.20 0.19 5.melon -0.01 -28.91 0.03 0.04 Yields (kg) 1. cereal 210.30 31.81 871.47 661.17 2. potato -3.28 -47.20 3.67 6.94 3. beans -0.77 -11.84 5.75 6.52 4. cotton 6.00 94.42 12.36 6.36 5. rape seeds 9.93 38.70 35.59 25.66 6. sugarcane -39.72 -77.87 11.29 51.02 7. tobacco 1.65 106.69 3.20 1.55 8. vegetable 2.25 1.10 207.43 205.18 9. melon -6.59 -12.73 45.16 51.75 10. gardening products and 92.15 17.60 74.55 423.56 fruits Data source: Jiangxi General Survey Department. 2009. Annual Report of Rural Households.

The sowing areas of gardening products have increased 59.4% from 2003 to 2008. During the period the yield per mu increased 2.28 times and the average price rose 25.42%. The contribution of the change in sowing areas, yield per mu and price to the growth of income from gardening products in 2003-2008 were 10.67%, 65.42% and 23.91%. The improvement in the productivity has been the key factor for the growth of gardening products. The contribution of the change in sowing areas, yield per mu and price for oil crops to the growth of income from oil crops were 8.92%, 20.99% and 70.09%. The rise of price for vegetable accounted for 97.81% of the growth of the income from vegetable from 2003 to 2008. The contribution of increase in the sowing areas and yield per mu for vegetable has only contributed 1% and 1.19% respectively to the growth of vegetable income. The income from the employment provided for others rather than enterprises and state capital investment project has increased 1.77 times from 2003 to 2008. It is learned that the daily wage rate in rural areas in 101

Jiangxi has raised 110% during the period based on some case studies and the data used for computing the costs of agricultural products. The number of days of such employment increased 1/3. It can be estimated that the rising of wage rate contributed 62.21% of the increased income and increase of employment demand contributed the remained 37.79%. The implications behind the facts are that the increasing migration of farmers does not only raised the income of the migrants’ households directly, but also created employment opportunities in rural communities and raised the wage rate of agricultural labors in the sending areas, which makes contribution to the income growth in rural areas. The data of national 2nd agricultural census shows that the proportion of part time hired agricultural labors in Jiangxi in 2006 was 32.4% and 115.2% higher than the national average and central region average respectively. The income from inter-provincial migration in Jiangxi has increased 25.61% from 2003 to 2008. The number of migrants worked over six months out of Jiangxi during the period increased 11.04% and the average wage rate increased 13.12%. After decomposition, the increase of number of migrants and extending of average time of migrated working has contributed 48.77% to the increase of income from inter-provincial migration in Jiangxi. The rising of wage rate contributed 51.23% of the growth of income earned from inter-provincial migration in Jiangxi. If the items of income analyzed above are put together with the state transfer, it is possible to evaluate the sustainability of the growth of farmers income in Jiangxi over 2003-2008. These items of income (income from grain, gardening products, oil crops and vegetable, employment in agriculture in rural community and inter-provincial migration as well as state transfer) accounted for 68.3% of the increased net income in Jiangxi from 2003 to 2008. The factors underlining the growth of income of these items are classified into three types, size or areas, productivity or yield per unit, and prices or rate. The results are presented in Table 37.

102

Table 37: Decomposition of the growth of income of major items in Jiangxi (2003-2008) Category of income

Increased income (CNY) 395.78 82.12 42.48 42.97 177.11 164.20 71.69

Sources of increased income (CNY) Area/size

Productivity

Price/rate

Rice 65.82 43.02 286.94 Gardening products 8.76 53.73 19.64 Oil crops 3.79 8.92 29.77 Vegetable 0.43 0.51 42.03 Employment within village 66.93 110.18 Migrating employment 80.08 84.12 State transfer 71.69 Total 1 (state transfer 976.36 297.50 106.17 572.68 included) Contribution % 100.00 30.47 10.87 58.65 Total 2 (state transfer 904.67 225.81 106.17 572.68 excluded) Contribution % 100.00 24.96 11.74 63.30 Note: the data presented in the table are calculated using comparable price. Data source: Jiangxi General Survey Department. 2009. Annual Report of Rural Households.

If state transfer is included as the factor of size, the contribution of change in size, productivity and price to the growth of farmers’ income from 2003 to 2008 was 30.47%, 10.87% and 58.65% respectively. If state transfer is excluded, the change in size, productivity and price has contributed 24.96%, 11.74% and 63.3% respectively to the growth of farmers’ income in Jiangxi during the period. It is clear that the rising of prices or wage rates has been the key source of the growth of farmers’ income in Jiangxi from 2003 to 2008. Without the change in prices or wage rates, the reduction of income in these items would make the annual growth rate of farmers’ income in Jiangxi over the period drop by 2.8 percentage points or the net income decline by 29.2%. It is worth drawing high attention by the Jiangxi government that the growth of farmers’ income may not continue without changing the pattern of farmers’ income growth. 6.1.3 Living Consumption of Farmers in Jiangxi The per capita living consumption expenditure of farmers in Jiangxi has increased 3.98 times from 1978 to 2008. Except for one year of slightly decrease in 1980, the per capita living consumption expenditure of farmers in Jiangxi in the past three decades has been kept increasing (Figure 11). Certainly, the fluctuation of consumption expenditure of farmers in Jiangxi has been much smaller than that for farmers’ income. In the most of the 103

years when the income of farmers declined, there had been only slightly slowing down of the growth rate of the consumption expenditure. It indicates that the farmers have had strong consumption smoothing capacity to smooth the consumption by means of mobilizing savings, storages and credit when the income declined. Figure 11: Growth of Farmers' Per Capita Income and Comsumption over 1978-2008 130.0

120.0

110.0

100.0

19 84 19 86 19 88 19 90 19 92 19 94 19 96 19 98 20 00 20 02 20 04 20 06 20 08

19 82

19 80

19 78

90.0

Year Consumption

Income

Data source: Jiangxi General Survey Department. 2009. Annual Report of Rural Households.

The structure of consumption of farmers in Jiangxi has experienced some change from 2003 to 2008 but seems change not so significantly as in other provinces. The proportion of food in the consumption expenditure in Jiangxi declined from 51.7% in 2003 to 49.4% in 2008 (Figure 12). Among the non-food expenditure of farmers, the expenditure for housing and medicine has increased largely. Their proportion in the consumption expenditure has increased for 3.05 and 1.39 percentage points respectively. Mainly because of the policy of providing free compulsory education since 2005, the proportion of expenditure of the farmers in Jiangxi on education and entertainment has declined 4.6 percentage points. If the tuition was excluded, the expenditure on entertainment has actually increased.

104

Figure 12: Change in the consumption structure from 2003 to 2008 55 50 45 40

%

35 30

2003

25

2008

20 15 10 5

O th er s

in e ed ic M

Ho us eh ol d

fa cil it

Ho us ie in Tr s g an an d sp se or rv t& ice Ed c om s uc at m io u ni n ca an t io d n en te r ta in m en t

th es Cl o

Fo od

0

Data source: Jiangxi General Survey Department. 2009. Annual Report of Rural Households.

6.2 Types of Rural Economic Development in Jiangxi There exist regional variations among different regions in terms economic development patterns in Jiangxi. Therefore, it is important to see the difference involved in the rural economic development. Before the rural economic development can be classified, there are two issues needing to be decided. Firstly, the definition of the scope of rural is one issue to be addressed. In the PRC, rural is not an independent statistical unit. Very few economic data are provided for rural. The usual method is to define rural economy by excluding the urban economy from the national economies. Unfortunately, the existing data on urban economies are mainly for cities. Towns are included in the most of the economic data for urban areas. For the sake of simplification, county is used as the analytical unit for rural economic analyses, which is in line with the statistical unit and is also consistence with the facts that most of the economies in counties are related to rural economies. In general, per capita income of farmers is a good indicator for understand the rural economic development levels. But it is found that the data for the per capita income of farmers in Jiangxi has systematic errors 105

after in depth analysis and comparison of varied development related indicators. The per capita income of farmers in Jiangxi in the poor counties is unreasonably set at very low level. The per capita net income of farmers in most of the poor counties has been even lower than the per capita value added of agriculture. Therefore, both per capita net income of farmers and per capita GDP are used to analyze the types of rural economic development in Jiangxi. 6.2.1 The Rural Economic Development Types Defined by Per Capita GDP The 80 counties in Jiangxi have been classified into three types by using per capita GDP as the indication. They are developed counties, middle level counties and underdeveloped counties. The thresholds set for the classification are (i) CNY10,000 for developed counties, (ii) CNY6,000 for underdeveloped counties, and (iii) between CNY6,000 and CNY10,000 for middle level counties. The geographical conditions, resources, population, income, employment and agricultural development of three types of counties are presented in Table 38. Table 38: Types of rural development in Jiangxi based on GDP per capita (2007) Threshold (CNY) Number of counties

Developed county >10,000

Middle level county 6,000-10,000

Underdeveloped county 4,500

3,500-4,500