industrialization to increase farmers’ income

Industrialization to Increase Farmers’ IncomeIndustrialization to Increase Farmers’ Income

Wang Changqu Wang Changqu Poverty Alleviation and Development Office in ChongqiPoverty Alleviation and Development Office in Chongqi

ng Provinceng Province12 June 200612 June 2006

Case Study of Ewes Project Performed by Case Study of Ewes Project Performed by Chongqing Three Gorges Animal Husbandry CorporationChongqing Three Gorges Animal Husbandry Corporation

Chongqing Three Gorges Animal Husbandry Corporation, located iChongqing Three Gorges Animal Husbandry Corporation, located i

n Wanzhou Prefecture under the national key poor county in the Thrn Wanzhou Prefecture under the national key poor county in the Thr

ee Gorges Reservoir Area of Chongqing Municipality, launched the ee Gorges Reservoir Area of Chongqing Municipality, launched the

Project of Ewe, an industrialization project aimed to reduce local poProject of Ewe, an industrialization project aimed to reduce local po

verty. With support from prefecture government, the project started verty. With support from prefecture government, the project started

in 2000 by involving a number of live goats breedingin 2000 by involving a number of live goats breeding

Preface

Project area

households. Five years of efforts households. Five years of efforts have brought about social and have brought about social and economic benefits, enormous poverty economic benefits, enormous poverty reduction and a replicable model of reduction and a replicable model of industrialization. Today we are industrialization. Today we are sharing our experience for your sharing our experience for your reference.reference.

Map of Chongqing

1. Rational of the Project1. Rational of the Project

1.1 Causes1.1 Causes

The inception of the project was a result of various demands integrThe inception of the project was a result of various demands integrated. It was initiated by the Corporation which wants materials supated. It was initiated by the Corporation which wants materials supply bases. Rural households need business and techniques. Governply bases. Rural households need business and techniques. Government aspires for social effects that can drive poverty reduction. Thment aspires for social effects that can drive poverty reduction. The three factors joint to give birth to the Ewe Project. The Chongqine three factors joint to give birth to the Ewe Project. The Chongqing Three Gorges Animal Husbandry Corporation is a sizable enterpg Three Gorges Animal Husbandry Corporation is a sizable enterprise focused on study and production of veterinary drug, productiorise focused on study and production of veterinary drug, production of the materials for Chinese herbal medicines and processing of ln of the materials for Chinese herbal medicines and processing of livestock products. It has been playing a leading role in local agendivestock products. It has been playing a leading role in local agenda of poverty reduction.a of poverty reduction.

1.2 Circulation1.2 Circulation

(1) The Corporation offers free of charge an ewe of quality breed (1) The Corporation offers free of charge an ewe of quality breed along with hybridization semen and breeding techniques to a along with hybridization semen and breeding techniques to a household.household. (2) After the ewe is grown up and gives birth to lambs, the (2) After the ewe is grown up and gives birth to lambs, the household returns two ewes to the Corporation.household returns two ewes to the Corporation.(3) The Corporation offers the two ewes to another two households.(3) The Corporation offers the two ewes to another two households.(4) After the two ewes are grown up and give birth to lambs, the two (4) After the two ewes are grown up and give birth to lambs, the two households return two lambs to the Corporation respectively.households return two lambs to the Corporation respectively.

As the cycle is fulfilled, the households secure the first ewe and the As the cycle is fulfilled, the households secure the first ewe and the other lambs, while the Corporation secures four lambs for sale.other lambs, while the Corporation secures four lambs for sale.

1.Rational of the Project1.Rational of the Project

Circulation of eweCirculation of ewe

CorporationCorporation BreedingBreeding Field ofField of Quality Quality goatsgoats

1 ewe1 ewe in 1in 1householdhousehold

2 Cross2 Cross ewes in ewes in

11 householdhousehold

CorporationCorporationProcessing Processing

MarketMarket

2 lambs2 lambs

2 lambs2 lambs

goats and Technical Servicegoats and Technical Service

lambslambs

2 Cross2 Cross ewes in ewes in

11 householdhousehold

1.3 Basic Conditions for the Project1.3 Basic Conditions for the Project 1.3.1 goats raising is the mainstay of local economy with 1.3.1 goats raising is the mainstay of local economy with

sound conditions for developmentsound conditions for development

As goats raising is the leading industry in Wanzhou PrefectAs goats raising is the leading industry in Wanzhou Prefecture, producing 1101.3 thousand goats annually, it becomes ure, producing 1101.3 thousand goats annually, it becomes the main source of local farmers’ income. In spite that breethe main source of local farmers’ income. In spite that breeding techniques widely spread among local farmers and the ding techniques widely spread among local farmers and the necessary facilities are installed, the problems range from pnecessary facilities are installed, the problems range from poor breeds to small size and slow growth of the goats. It reoor breeds to small size and slow growth of the goats. It requires high quality breeds and updated techniques of breedquires high quality breeds and updated techniques of breeding and disease control. These are most desired in local hoing and disease control. These are most desired in local households.useholds.


1.3 Basic Conditions for the Project1.3 Basic Conditions for the Project

1.3.2 The Corporation is well equipped with capital, 1.3.2 The Corporation is well equipped with capital, Technology and market Technology and market

The Three Gorges Animal Husbandry Corporation is financially The Three Gorges Animal Husbandry Corporation is financially powerful evidenced by 250 million RMB of fixed assets. Its business powerful evidenced by 250 million RMB of fixed assets. Its business covers animal husbandry, processing of agro products and technical covers animal husbandry, processing of agro products and technical service delivery. It abounds in: technology, staff (2600), expertise (948, service delivery. It abounds in: technology, staff (2600), expertise (948, among which 36 are senior technicians for animal breeding and among which 36 are senior technicians for animal breeding and medicare) and stable partnership with research institutions, medicare) and stable partnership with research institutions, slaughterhouses, meat processing factories, feedstuff factories and slaughterhouses, meat processing factories, feedstuff factories and veterinary drug factories. The Corporation is both the major buyer of veterinary drug factories. The Corporation is both the major buyer of goats market and the major seller of veterinary drugs and feedstuff. goats market and the major seller of veterinary drugs and feedstuff. These favorable conditions relieve the households of any shortage of These favorable conditions relieve the households of any shortage of fund, technology and market access.fund, technology and market access.


1.3 Basic Conditions for the Project1.3 Basic Conditions for the Project

1.3.2 Government support to industrialization1.3.2 Government support to industrialization The Chongqing Municipal Government enforced a range of incenThe Chongqing Municipal Government enforced a range of incen

tive policies to support leading enterprises engaged in industrializtive policies to support leading enterprises engaged in industrialization. The policies include: low price of breeding field rental and ation. The policies include: low price of breeding field rental and purchase, reduction or exemption of goats slaughter fee, award to purchase, reduction or exemption of goats slaughter fee, award to exports and support to investment in fixed assets.exports and support to investment in fixed assets.

The local government regarded the upgrade of goats breed as a crThe local government regarded the upgrade of goats breed as a crucial measure to improve farm techniques. It rolled out quality brucial measure to improve farm techniques. It rolled out quality breeds prefecture wide, and imposed the tasks on local government eeds prefecture wide, and imposed the tasks on local government

officials.officials.


2.Enforcement of ewe Project2.Enforcement of ewe Project

Seven measures in bondSeven measures in bond

1. Mass participation1. Mass participation2. Provision of high quality goats breeds and matching 2. Provision of high quality goats breeds and matching

serviceservice3. Technical support to households3. Technical support to households4. Marketing of goats4. Marketing of goats5. Collaboration with research institutions to address 5. Collaboration with research institutions to address

technical problemstechnical problems6. Planting of medical herbs 6. Planting of medical herbs 7. Government implementation of policies.7. Government implementation of policies.

2.1 Mass participation and 2.1 Mass participation and Joint BenefitJoint Benefit

The local government and the The local government and the Corporation jointly convened the Corporation jointly convened the mobilization meeting, printed and mobilization meeting, printed and issued promotional booklets, issued promotional booklets, encouraged households to the encouraged households to the project and signed contracts with project and signed contracts with the Corporation. Government the Corporation. Government enforced favorable policies to the enforced favorable policies to the corporation and households, corporation and households, supervised the contracted supervised the contracted performance of both corporation performance of both corporation and households and safeguarded and households and safeguarded the benefits of all actors.the benefits of all actors.

Promotional activities for the project


2.2 The corporation provides high quality goats, feeds2.2 The corporation provides high quality goats, feedstuff prescription and veterinary drugstuff prescription and veterinary drugs

After the contract is signed, the corporation breeding field provideAfter the contract is signed, the corporation breeding field provides high quality ewes and feedstuff prescriptions to the contracted hs high quality ewes and feedstuff prescriptions to the contracted households. At the same time, the households may purchase on creouseholds. At the same time, the households may purchase on credit the feedstuff and drug from the corporation and pay back after dit the feedstuff and drug from the corporation and pay back after sales of lambs. The circulation of goats has helped deal with the ssales of lambs. The circulation of goats has helped deal with the shortage of capital for households.hortage of capital for households.


2.3 Technical support to 2.3 Technical support to householdshouseholds

Deliver technical training on breeding, disease control and shed upgraDeliver technical training on breeding, disease control and shed upgrade: Rely on service stations, based on township schools, sited in exemde: Rely on service stations, based on township schools, sited in exemplary households. plary households.

Clarify accountability split: Each station has one technician for husbaClarify accountability split: Each station has one technician for husbandry and one for veterinary medicare whose job is to survey the housendry and one for veterinary medicare whose job is to survey the households for information on the breeding and collect the information into holds for information on the breeding and collect the information into records signed by the households. The records shall be taken as the evrecords signed by the households. The records shall be taken as the evidence of performance evaluation for the technicians. idence of performance evaluation for the technicians.

Head of tech service station visits household to teach feeding tech


●●Build up service system: technical Build up service system: technical service stations in 12 townships, service stations in 12 townships, service teams in villages, 100 service teams in villages, 100 exemplary villages and 10 thousand exemplary villages and 10 thousand exemplary households.exemplary households.

Technical section

of the corporation

Technical service stations

in townships

Breeding and

Disease control

Quality BreedFieldlambsgoats

Frozen Semen

Households

Produced ewes within

18 months Slaughter and

Processing by

corporation

Market

Provision of feedstuff and drugs

Procedure of technical service

Can be sold to the corporation or directly to the market

2002 Gao Hongbin, Depu2002 Gao Hongbin, Deputy Director of LGOP inspety Director of LGOP inspected the records of projeccted the records of project householdst households

2.42.4 Guarantee the purchase of lambs Guarantee the purchase of lambs

To guard the sales of lambs against price fluctuation, the To guard the sales of lambs against price fluctuation, the

corporation purchases a proportion of the lambs on time so that corporation purchases a proportion of the lambs on time so that

the households have no difficulty in selling the lambs. If the the households have no difficulty in selling the lambs. If the

ewes fail to produce lambs for any reason, the household can ewes fail to produce lambs for any reason, the household can

pay 50 RMB back to the corporation and secure the ewe, so that pay 50 RMB back to the corporation and secure the ewe, so that

the benefit of farmers is guaranteed. the benefit of farmers is guaranteed.


2.5 Partnership with 2.5 Partnership with research institutions to research institutions to innovate reproduction innovate reproduction technologytechnology

To ensure the reproduction rate and quality of the project, the To ensure the reproduction rate and quality of the project, the corporation partnered with Southwest Agricultural University, Nanjing corporation partnered with Southwest Agricultural University, Nanjing Agricultural University and Chongqing Municipal Station of Animal Agricultural University and Chongqing Municipal Station of Animal Breed Upgrade. Professors of the Southwest Agricultural University Breed Upgrade. Professors of the Southwest Agricultural University were invited to give guidance and training. By these efforts, the were invited to give guidance and training. By these efforts, the breeding rate climbed from 71.4% in 2000 to 85.7% in 2005.breeding rate climbed from 71.4% in 2000 to 85.7% in 2005.

Technical Training Courses


2.6 Install more collaboration projects based on the 2.6 Install more collaboration projects based on the partnerships established for the Ewe Projectspartnerships established for the Ewe Projects

The project has strengthened the relation The project has strengthened the relation between the corporation, government between the corporation, government and households. The corporation started and households. The corporation started to plant herbs in the five towns in project to plant herbs in the five towns in project areas to provide quality materials for areas to provide quality materials for veterinary drug production in 2002 and veterinary drug production in 2002 and the planting area has expanded to 1000 the planting area has expanded to 1000 hectares by 2005 . hectares by 2005 .

Herb Planting Base of the Corporation

2.Enforcement of Ewe Project2.Enforcement of Ewe Project

2.72.7 Government support Government support

Government finance for the project Government finance for the project amounted to 1 million RMB in 2001 and amounted to 1 million RMB in 2001 and 0.5 million cash-for work fund in 2002,0.5 million cash-for work fund in 2002,altogether 1.5 million, which was spent on altogether 1.5 million, which was spent on the purchase of quality breeds of goats.the purchase of quality breeds of goats.Government took the lead in promotional Government took the lead in promotional and coordination activities.and coordination activities.

On-site inspection by the senior

government officials


Government played an important role in the approval of land Government played an important role in the approval of land

for goat folds, promotion of upgraded feedstuff and solution for goat folds, promotion of upgraded feedstuff and solution

of disputes.of disputes.

3. Effects3. Effects

By 2005, 8035 ewes have been offered, 12078 cross ewes have By 2005, 8035 ewes have been offered, 12078 cross ewes have been returned and reoffered and 26000 double-cross lambs have been returned and reoffered and 26000 double-cross lambs have been returned. The project involved 12 townships, 35 thousand been returned. The project involved 12 townships, 35 thousand households among which 9600 are poor households. households among which 9600 are poor households.

The project released positive social effect. It helped expand the The project released positive social effect. It helped expand the corporation business, stabilize industrial chains, increase farmers’ corporation business, stabilize industrial chains, increase farmers’ income and local government revenues and optimize the rural income and local government revenues and optimize the rural industrial structure.industrial structure.

3.1 Increase farmers’ income3.1 Increase farmers’ income

The aggregate income of farmerThe aggregate income of farmers increased by 165 million RMB s increased by 165 million RMB over the past five year. Net incoover the past five year. Net income increased by 49.5 million Rme increased by 49.5 million RMB, average 1412.3 RMB by hMB, average 1412.3 RMB by household and 404 RMB per capiousehold and 404 RMB per capita. Farmers’ income increased bta. Farmers’ income increased by 24 RMB with each 1 RMB iny 24 RMB with each 1 RMB invested by the government to povested by the government to poverty reduction.verty reduction.

President of the corporation pays the household for lambs


Income increase derived from the project in the specific household

In the case of a specific household in the project area, 4 family In the case of a specific household in the project area, 4 family members gained per capita 600 RMB in 2000. Involved in the members gained per capita 600 RMB in 2000. Involved in the project since December 25 in the same year, the household per project since December 25 in the same year, the household per capita income reached 3600 RMB in 2005.capita income reached 3600 RMB in 2005.

0

500

1000

1500

2000

2500

3000

3500

4000

2001 2005

Income

3.2 Increase the profits of the corporation3.2 Increase the profits of the corporation The Three Gorges Husbandry Corporation, with its sales of goats The Three Gorges Husbandry Corporation, with its sales of goats

and expanded business on veterinary drugs and feedstuff, has and expanded business on veterinary drugs and feedstuff, has seen its profits increased year by year, in which those from goats seen its profits increased year by year, in which those from goats sales rose from 12 million in 2000 to 20 million in 2005, those sales rose from 12 million in 2000 to 20 million in 2005, those from drug sales climbed from 120 million RMB in 2000 to 326 from drug sales climbed from 120 million RMB in 2000 to 326 million RMB in 2005.million RMB in 2005.

3.3 Economic Restructure3.3 Economic Restructure

The project has also brought about advances in local economic The project has also brought about advances in local economic structure. The portion of grain planting in the total agricultural structure. The portion of grain planting in the total agricultural outputs decreased from 35.1% in 2000 to 25.2% in 2005, while outputs decreased from 35.1% in 2000 to 25.2% in 2005, while the portion of husbandry outputs rose from 38.5% in 2000 to the portion of husbandry outputs rose from 38.5% in 2000 to 44.2% in 2005. Revenues from ewe business have been greatly 44.2% in 2005. Revenues from ewe business have been greatly expanded by percentage in the total of family income.expanded by percentage in the total of family income.


3.4 Increase government tax revenue3.4 Increase government tax revenue

With the constant expansion of the corporation, the government receiWith the constant expansion of the corporation, the government received increasing taxes from the corporation, from less than 1 million in ved increasing taxes from the corporation, from less than 1 million in 2000 to 5.6 million RMB, to 6.3 million in 2004 and 10.3 million in 22000 to 5.6 million RMB, to 6.3 million in 2004 and 10.3 million in 2005.005.

3.5 Update the mentality of farmers3.5 Update the mentality of farmers The project raised the awareness of tech and commerce in locality. RatThe project raised the awareness of tech and commerce in locality. Rat

es of Slaughtered goats(%) have risen due to the guidance of techniciaes of Slaughtered goats(%) have risen due to the guidance of technicians, farmer master of breeding tech, feedstuff and disease control tech. ns, farmer master of breeding tech, feedstuff and disease control tech. The project has also further commercialized local production of goats, The project has also further commercialized local production of goats, changed the local tradition of self-consumption of goats, so as to bring changed the local tradition of self-consumption of goats, so as to bring the commodity rate of goats to over 90%.the commodity rate of goats to over 90%.


4.Lessons from the project4.Lessons from the project

4.1 Business opportunities for the poor households 4.1 Business opportunities for the poor households are the core of poverty reductionare the core of poverty reduction

Poverty reduction relies on income increase and the latter Poverty reduction relies on income increase and the latter relies on optimal business projects. Constrained by capital relies on optimal business projects. Constrained by capital shortage, low tech level and limited market access, the shortage, low tech level and limited market access, the households can only increase income with business projects households can only increase income with business projects that require minimum capital investment, lowest cost of tech that require minimum capital investment, lowest cost of tech innovation and maximum guarantee of sales. In the ewe innovation and maximum guarantee of sales. In the ewe project, the corporation provide goats, feedstuff prescription project, the corporation provide goats, feedstuff prescription and tech service all free of charge, and offers to purchase the and tech service all free of charge, and offers to purchase the goats, so this is the right project needed.goats, so this is the right project needed.

4.2 Collaboration between different stakeholders is 4.2 Collaboration between different stakeholders is the driving elementthe driving element

Connection of social goals with economic goals should be the Connection of social goals with economic goals should be the

focus of industrialization-based strategy of poverty reduction. focus of industrialization-based strategy of poverty reduction. More specifically, the demand of rural households, the demand More specifically, the demand of rural households, the demand of enterprises for profits and the administrative purposes of the of enterprises for profits and the administrative purposes of the government should all be integrated to foster a favorable government should all be integrated to foster a favorable collaboration between the three stakeholders. By doing so, the collaboration between the three stakeholders. By doing so, the households can be mobilized to participate, the enterprise can households can be mobilized to participate, the enterprise can provide materials, tech service and marketing for the purpose of provide materials, tech service and marketing for the purpose of profit and the government can give financial and infrastructure profit and the government can give financial and infrastructure support. The success of the project is attributable to the stable support. The success of the project is attributable to the stable collaboration and logical duty split between the three collaboration and logical duty split between the three stakeholders.stakeholders.


4.3 Tech innovation to improve household breeding 4.3 Tech innovation to improve household breeding techniques is the basis for poverty reductiontechniques is the basis for poverty reduction

Without tech innovation, market can not be expanded, while withWithout tech innovation, market can not be expanded, while without cost-efficient introduction of tech, the households may have lout cost-efficient introduction of tech, the households may have little access to the business of high quality. In the ewe project, inittle access to the business of high quality. In the ewe project, innovation of tech including goats, feedstuff, veterinary drugs and novation of tech including goats, feedstuff, veterinary drugs and breeding tech was all managed by the corporation charging nothibreeding tech was all managed by the corporation charging nothing or on credit to the households. This benefited the household bng or on credit to the households. This benefited the household by quality tech service at low cost and upgrade of household busiy quality tech service at low cost and upgrade of household business at low cost.ness at low cost.


4.4 Government support is the indispensable cond4.4 Government support is the indispensable condition of poverty reductionition of poverty reduction

From the perspective of coordinated social development, poveFrom the perspective of coordinated social development, poverty reduction is a public product produced by the government arty reduction is a public product produced by the government as its prime mandate. In the ewe project, government was doing s its prime mandate. In the ewe project, government was doing a good job in promotion, tech spreading, safeguard of the intera good job in promotion, tech spreading, safeguard of the interests of households and the corporation. Apart from the above, tests of households and the corporation. Apart from the above, the government rendered the corporation and households with he government rendered the corporation and households with production subsidies which smoothed the proceeding of the prproduction subsidies which smoothed the proceeding of the project and brought about huge benefits.oject and brought about huge benefits.


4.5 Leading enterprises are the major actors of po5 Leading enterprises are the major actors of poverty reductionverty reduction

Industrialization, to achieve a success, requires the initiation and glue functions that the leading enterprises can give. The corporation advocated that it would perform with households on the principle of voluntary cooperation, mutual benefits, observance to contract and common development. The corporation invested 57% of the capital needed for the project to bond itself up with the benefit of the households, finally attaining a win-win result.


长江——瞿塘峡

Thank you!

industrialization to increase farmers’ income

Documents

project of ewe

ewe project

local poverty

industrialization project

local households

case study of ewes project

breeding techniques

ewe of quality breed