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Villagers in Inner Mongolia Enjoy Benefits of Compensatory Transfer

It is the winter season. Chaganzhurihe Village in Xing'an League, located in northern China's Inner Mongolian Autonomous Region, is shrouded in complete cold. But villagers there can feel the warmth brought by local poverty reduction efforts and envision a bright and promising future.

The Report to the 17th National Congress of the Communist Party of China states: "enhance poverty reduction through development" and "uphold the basic system for rural operations, stabilize and improve land contract relations, improve the market for transferring land contracts and management rights in accordance with the law and on a voluntary and compensatory basis, and develop various forms of appropriate large-scale operations where conditions permit". "These words warm our heart," the villagers said.

China has made considerable efforts to reduce poverty inside the Xing'an League. In recent years, the government has concentrated on compensatory transfers of production factors and made encouraging progress.

Enjoy "five treatments"

Wuyue, 44 years old, is a housewife in a poor family living in Chaganzhurihe Village. Three years ago, she signed the "Land Transferring Contract" with a major grain producer.

The right to use the land still belongs to Wuyue; the grain producer compensates Wuyue with 100-kilogram of corn per mu per year and she receives a cartful of stalks for every five mu per year. Also, the members in poor families should been given prior consideration when they want to work for the grain producer; poor families enjoy national preferential treatments such as these grain subsidies.

After transferring the right of land management to the major grain producer, Wuyue enjoys the above "five treatments".

Wuyue and her husband cropped grains on 30-odd-mu of land, earning about 2,000 yuan (US$281.2) a year in the past. "It is much more profitable," explained Wuyue. "We needn't to watch the land, so we can go out to work earning an annual salary as high as 8,000 (US$1,125) to 9,000 yuan (US$1,265). When it is the busy season in farming, I help the major grain producer with farm work and earn about 1,500 yuan (US$211) every month. Plus we are compensated with corn by the grain producer so we can live a better life."

Wuyue indicated that she would renew the land transfer contract with the major grain producer.

Many people like Wuyue in the Xing'an League lack production skills and relevant knowledge as well as large-scale mechanisms: all of these factors have led to their poverty. "Since the implementation of land transferring, many laborers have been emancipated. It has also aroused producer households' production enthusiasm. It is very likely to achieve win-win results," said Yang Bingqian, a senior official of Xing’an League.

Increase production, income

Chen graduated from a local agricultural and pastoral school in Xing'an League. He is good at sharecropping and managing. He cropped on his 96-mu of land in the past. Such a small tract in fact increases production costs. Later, he tried to sign contracts with poor families to rent their land. Now he earns more than 60,000 yuan (US$843.7) a year and his average profits have increased 60-70 yuan (US$8.44-US$9.84) for every mu.

In addition to arable land, the Xing'an League also includes livestock into the compensatory transferring system. Baoxing, a resident of Xinghua Village, is an expert in rearing sheep. He contracted with 10 poor families to rear a total of 40 ewes. In accordance with the contract, he compensated every household 100 yuan (US$14.06), two lambs, and one-kilogram of cashmere. Three years later, he will return all 40 sheep to their indigent owners. Sixty percent of the profits made by rearing sheep will be given to Baoxing, while the other 40 percent belongs to the 10 poor families. "Last year, my earnings doubled. I believe that all our 11 households can shake off poverty as long as we work together," smiled Baoxing.

Presently, this kind of production model has appeared in many places within the Xing'an League. Reports state that 10 households dedicated to breeding in Hongqi Village contracted to raise 2,550 sheep, and these sheep have given birth to about 1,000 lambs within half a year. By doing so, the average annual income of every household increased more than 3,000 yuan (US$421.8).

Diffuse potential risks

"Transferring land management rights on a voluntary and compensatory basis is conducive to the interaction between poor families and major producers. Large-scale and intensive production can yield high profits with low costs, so the major producers are willing to invest. Meanwhile, the indigent labor force can be emancipated and shifted to secondary and tertiary industries," explained Yang.

The Director of Xing'an Poverty Alleviation Office Zhang Shiwei stated that the annual net income of poor people there increased to 1,470 yuan (US$206.7) in 2007, up from 785 yuan (US$110.4) in 2005; significantly, the number of poor population has reduced to 38,300 from 69,600.

Zhang said that major producers could make profits and fulfill the contract in normal years. However, once an unexpected natural disaster happens, the risk would inevitably shift to major grain producers. Therefore, it is necessary to resolve this kind of crisis via agricultural insurance, thus avoiding and reducing the phenomenon of returning to poverty.

After transferring the right of land management, whether the laborers can earn money by going out to work poses yet another problem.

"Future poverty reduction work in Xing'an League will focus on two key points," Yang Bingqian exlpained. "One is to support the major producers through credit discounts, machinery subsidies and so on; lead the major producers to prolong the term of land transfer with indigent households so as to encourage major producers to invest more in order to reduce the risk probability. On the other hand, we will strengthen skill training for those farmers and herdsmen intending to work in other places and enhance their employment abilities in secondary and tertiary industries."

(China Development Gateway by Sun Wan March 29, 2008)

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