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China: Poverty Reduction Project Empowers Farmers to Help Themselves

January 11, 2016

World Bank Group

  • Community-based approach gives farmers control over use of poverty relief funds and project implementation.
  • Village-based financial cooperatives improve farmers’ access to financial services.
  • A Global Environment Facilty (GEF) grant helped farmers understand and adapt to climate change.

Shaanxi, China – Xue Huating voted for a bridge with the first ever ballot she cast to decide on her village’s use of public money.

Xue, 52, lives in Kongya Village in Shaanxi’s Yichuan County on the Loess Plateau. A 3-mu (about 0.49 acre) apple orchard is her family’s cash cow.

But there was a problem. On the way from her house to the orchard lies a creek. Under heavy rain, it would turn into a torrential river. Sometimes the flood tides would stay as long as one month.

“I knew my apples were ripe. But there was no way I could cross the river to harvest them. When the waters would finally retreat, many apples would already have fallen on the ground and rotted,” she said.

In 2013, her village voted to decide how to use funds from a poverty alleviation project. Xue didn’t hesitate to vote for a bridge. It proved to be the most popular among her fellow villagers, beating other choices that included a road, a water channel and road lights.

" Villagers came up with many pressing problems. The bridge got the most votes, and so we decided to build it. "

Ma Mingfang

Head of Zhaizi Village’s Project Decision-making Committee

Today a sturdy bridge stands over the creek that had been a nuisance for Xue and other villagers through the years.

The Sustainable Development in Poor Rural Area Project, supported by the World Bank, helped change the way assistance is provided to poor rural communities in China. It introduced the community driven development (CDD) approach on a large scale five years ago, giving farmers like Xue control over decisions on use of funds and enable them to handle procurement of materials, supervise construction, and maintain public works themselves. It also provided training and detailed manuals to guide them throughout the process.

In the Zhuoli Village about twenty kilometers away, a financial cooperative was set up to lend money to farmers for their productive activities, with help of a 250,000 yuan (about $40,000) grant from Community Development Financing (CDF).

“It is very helpful to farmers because we really don’t have other places to borrow money,” said Li Jianming, the elected head of the village cooperative.

“Banks are in the city and far away, and you have to go through very complicated procedures and present various documents. I applied once, they even asked for my marriage certificate,” said Zhang Xianzhen, who borrowed 5,000 yuan ($800) this year from the cooperative to buy apple saplings. She plans to pay back the money after selling pepper and walnuts which her family depend on to make a living.

The cooperative has issued five rounds of loans, 2,000 to 5,000 yuan ($320-800) each, with one year maturity. So far there has not been one single default, said Li, the head of the cooperative. That happens, he said, “Because we live in the same village and we know each other so well -- what kind of people they are, whether they really would use the money to do the thing they said.”

Like Kongya and Zhuoli villages, about 700 rural villages with more than 500,000 farmers in China’s Henan and Shaanxi provinces and Chongqing Municipality have benefited from the project and its community-based approaches.

In addition, a $4.27-million grant was provided by the Global Environment Facility (GEF) to improve farmers’ awareness and adaptability of climate change. Through training, farmers learned about possible impacts of extreme weather events on farming, such as drought, excessive rain, frost and hail, and ways to deal with them. Specific measures were introduced, including change of tillage practice to reduce soil erosion, rainwater harvesting for use in times of drought, and use of hail-nets in fruit orchards.