Fuxing Tea Farmers’ Cooperative was the first cooperative founded with support from the US$100 million World Bank-financed Guizhou Rural Development Project. This is one in a series of Bank-financed projects helping to scale-up innovative programs to reduce poverty in China.
Guizhou is a land-locked and mountainous province in southwest China. It is one of the country’s poorest provinces, with about 40% of its 40 million population belonging to various ethnic minorities. In 2011, more than 11 million people lived below the national poverty line of RMB2,300 a year (US$334). Farming is a key source of livelihood for the poor.
Organizing small-scale farmers into cooperatives can increase agricultural productivity and improve the marketability of their products. As a result of greater scale and better organization in the cooperatives, products are standardized, production quality and quantity increase, there is greater access to market information and services, better bargaining power, and reduced overhead expenses.
Implemented in 11 poor counties in Guizhou, the project was intended to demonstrate a model for agricultural sector restructuring and value chain modernization, improved organizational arrangements, and strengthened public service delivery.
The project has supported farmers’ cooperatives by expanding and upgrading their production facilities, buying new machinery and equipment, and building basic infrastructure such as production roads, field footpaths, market facilities, and irrigation and drainage works to improve production conditions.
The project has also assisted the cooperatives in setting up the organizational structure and rules to ensure good management, such as holding regular membership assemblies, appointing a board of directors, a board of supervisors, and ensuring transparent financial management and profit distribution, all while providing training to the leaders, staff and members of the cooperatives.
Farmers join the cooperative by converting their land use rights into shares and get a dividend in proportion to the shares they own at the end of the year. In addition, members can work for the co-op for a salary and sell their products to the cooperatives for collective processing and marketing.
Co-ops provide jobs and a source of income particularly to women, who stay behind to take care of their families while their husbands work in cities, as well as returned migrant workers and older people.
Forty-five-year-old Fan Ling and her husband used to work in a shoe factory in Wenzhou, more than 24 hours by train from their hometown in Dejiang County. They came back a few years ago when Fan’s parents experienced health problems.
After joining a co-op, Fan works in its processing factory earning 2,600 yuan a month (US$384). Fan is happier now. “It’s easier to take care of my old parents and two kids who are in high school. We can grow Tian Ma and work in the factory.” Dejiang County is known for producing Tian Ma (Gastrodia elata), a traditional medical herb that treats convulsion, hypertension, dizziness and headaches.
The Changlong Tian Ma Farmers’ Cooperative where Fan works made its first dividend payment in 2018. “We pay dividends in several ways – on the basis of the number of shares a member owns, the amount of Tian Ma and mushroom he or she sold to the co-op, the profit earned from the processed products, and salaries for working in the factory,” explained Zhang Yangfu, chairman of the co-op.
Hu Maofen, 55, harvested and sold 100 kilograms of Tian Ma. This, together with her dividend and salary from the factory, amounted to more than 20,000 yuan (US$2,956). “Joining the co-op has increased our income. My husband and I don’t have to depend on our children anymore and can live on our own," she said.
“This is a good model for village revitalization, bringing tangible benefits for the farmers,” added Huang Jirong, Director of the Poverty Alleviation Office of Tongren.
“This project has promoted the development of the agricultural value chain in Guizhou and helped standardize the operation of our rural farmers’ cooperatives. The project has set a good example for our poverty alleviation efforts. Its approach and practices have been promoted and replicated in other countries and cooperatives,” said Peng Jinbin, Director, Project Management Center of the Guizhou Poverty Alleviation Office.
Since 2014, 72 farmers’ cooperatives were founded with project support, including a total of 18,402 farmer households. Farmer-owned and operated, these cooperatives are playing a key role in reducing poverty and increasing incomes of farmers in rural Guizhou.