OPINION

Family Farms: A Complement to Urbanization

While governments at all levels are obsessed with promoting urbanization, the Central Government proposed supporting a new trend: the family farm. Without a doubt, a solid foundation for agriculture will be had if the idea of family farm can be put into practice.

It has been reported that an array of family farms—as opposed to state farms and collective farms—have sprung up in many places, such as Songjiang County in Shanghai, Wuhan in Hubei Province, Yanbian in Jilin Province and Langxi County in Anhui Province. These family farms play a role in raising the incomes of rural residents and facilitating the development of modern agriculture.

Therefore, it has become important to understand this new land management and grain production model.

On the one hand, urbanization can effectively absorb a rural surplus labor force, allowing more rural residents to settle down in cities and towns. On the other hand, the promotion of family farms would create a favorable environment for those who are not qualified to engage in industrial production in cities and towns, but are skilled in agricultural planting. Family farms will therefore offer more employment opportunities. The two aspects could create a win-win situation for both urban and rural areas.

But the immediate barrier is that conditions are not ripe for the widespread practice of family farms. More efforts should be made to create an atmosphere for their popularization.

First of all, reforms should be made in the flow and concentration of lands to push to the spread of family farms. Since land use rights are dispersed among farmer families, low concentration and small-scale farming seriously hinder the improvement of productivity, especially for families without enough labor force. Authorities should unveil policies to ensure that people who set up family farms can be provided with enough arable land, and those who rent out their lands can get a fixed income.

Urbanization is an effective way to realize the concentration of land holdings. Once the pace of urbanization is accelerated, the spread of family farms will speed up.

Second, laws should be formulated to protect the interests of family farms. Only then will farmers dare invest in and improve the land they use. Laws and regulations should be put in place to protect its legal status and development.

In the process, rural folks who have joined the ranks of urban residents should hand over their land to family farm owners, and measures should be taken to reduce arable land occupation and prevent any violation of farmers' interests.

Third, the government should introduce preferential policies to support the popularization of family farms. Past experience suggests that only when farmers realize they can benefit from these policies, can the conception be put into reality. The government should lend support in terms of taxation, financing, training, etc. National insurance in combination with reduced administrative interference could convince farmers of the worthwhile nature of family farms.

What's worth noting is that many local governments are now over concentrated on urbanization and care little about agriculture. In this sense, further research is needed to seek a balance between the promotion of family farms and urbanization.

If the plan can be carried out in an all-round way, family farms will relieve the pressure of rural unemployment, significantly boost the income of rural residents, bridge the urban-rural income gap and ease the process of urbanization.

This is an edited excerpt of an article by Tan Haojun, an economic commentator, published in Securities Times

THE MARKETS

Stake Acquisition

In a bid to fuel the company's growth, Chinese e-commerce giant 360buy sold a $400-million stake to a Saudi Arabian company.

Kingdom Holding Co. (KHC), which is owned by billionaire Al-Waleed bin Talal, a member of the Saudi royal family, led the stake acquisition, 360buy said on February 16.

The acquisition was part of 360buy's fourth round of financing, which has raised a total of $700 million.

The other three rounds occurred in 2007, 2008 and 2011, which raised $10 million, $21 million and $1.5 billion, respectively.

The main investors in this round included KHC, the Ontario Teachers' Pension Plan in Canada and other major 360buy shareholders.

360buy's sales volume exceeded 60 billion yuan ($9.63 billion) in 2012 and is expected to top 100 billion yuan ($16 billion) this year.

Heading Southwest

The world's largest convenience store company, 7-Eleven, plans to expand in southwest China.

It's reported that the company will open stores in Chongqing Municipality later this year.

7-Eleven has already opened 90 stores in Chengdu, capital of southwest China's Sichuan Province. It plans to increase the number to 140 this year.

7-Eleven has 40,000 stores around the world, with more than 1,800 on the Chinese mainland and about 8,030 in the United States and Canada.

NUMBERS

$43.85 bln

Value of international outsourcing contracts signed by Chinese companies in 2012, up 34.4 percent

56.1%

Proportion of information technology outsourcing in 2012

26.6%

Percentage of the value of executed outsourcing contracts from the United States in 2012

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