Cal Poly MBA Trip » The Only Ground

The Only Ground

November 20th, 2008

Submitted by: Oscar Merlin

The Wall Street Journal had an article titled China to Create Market for Land Rights to Promote Consolidation of Farms. This article discusses how the Chinese government is thinking of implementing new regulations that would allow Chinese farmers to “sublet, lease, swap and transfer” their land rights in order to ultimately make “less land produce more”. Their objective is to revitalize the rural economy that consists of 730 million farmers.

When I was reading this article, I kept recalling how in an interview this architect kept bringing back the point that China was moving forward and could modernize any industry it set its sight on. And that is probably true to some degree in agriculture. I think that if China set its mind to it, the country can bring its agriculture sector forward to the 21st century. But, if this were to happen on a wide scale though, it would probably tumble the government. If China fully modernizes its agriculture and leave only 1-2% of its people as farmers (as is the case in the United States), then there would be 716.8 million Chinese farmers too many. That would leave millions and millions of Chinese unemployed.

There is no more land in China to bring forth to cultivation. This means that China does in fact need to produce more on less. But again, the government has to be careful on how it approaches agriculture in its country. What I think China could do, is to run its cooperatives better. And, by better, I mean that it needs to modernize only enough cooperatives to keep up with demand. In other words, the country will have to consolidate some acreage but not all of it. It needs to make sure that if machines are brought in to increase productivity that these machines are being used as aids to hand labor.

So, the government has to pay really close attention to what it lets its farmers do on their land. Otherwise the millions of peasants who only have a little piece of land to show for, won’t even have that in a few years (they might lose it somehow). This in turn will lead to unemployment which in turn will lead to millions of homeless. They cannot allow for chaos in this regard in their country, otherwise their chaos is our chaos.

What do you guys think about granting farmers land rights to promote consolidation? Is this the right step to take for China? How would you handle land issues in China? What would you different? What do you think about my point of view?