Promoting Poverty Reduction in Poor Areas Through Characteristic Industries
- poverty reduction approaches
- endogenous poverty alleviation
- vulnerable groups
- targeted poverty alleviation components
- supporting policies
Promoting Poverty Reduction in Poor Areas Through Characteristic Industries
Title : Promoting Poverty Reduction in Poor Areas Through Characteristic Industries
Commencement Date : Thu Jan 06 2000--Thu May 16 2013
Implementing Agencies : Chongqing Three Gorges Animal Husbandry Corporation
Support Organizations : Chongqing City Poverty Alleviation Office
Actuator : Chongqing Three Gorges Animal Husbandry Corporation
Members of The : Chongqing Three Gorges Animal Husbandry Corporation
Contact : Chongqing City Poverty Alleviation Office
CASE PROVIDER :
Sources of Funds :
Catalogue and Index :
Abstract Summary :
Located in southwest China, at the upper reaches of the Yangtze River, across the east longitude of 105°11'~110°11' and north latitude of 28°10'~32°13', in the transition zone between the Qinghai – Tibet Plateau and the middle and lower reaches of the Yangtze River, Chongqing is 470 kilometers long from east to west and 450 kilometers wide from south to north, covers a land area of 82,400 square kilometers, has 38 county-level administrative regions, 21 municipal districts, 13 counties, 4 autonomous counties, and a total population of 33.5842 million, of which 20.1437 million are agricultural population and 13.4405 million are non-agricultural population. Since 2003, Chongqing has witnessed rapid economic growth and its GDP has increased for many consecutive years, soaring from 255.572 billion yuan in 2003 to 1265.669 billion yuan in 2013, with an increase of more than 5 times.
When China launched the "Seven-year Priority Poverty Alleviation Program" in 1994, Chongqing had a rural poor population of 4.23 million. In 1997, when Chongqing became a municipality directly under the Central Government, 20 of its 40 districts and counties were impoverished counties, and the food and clothing problems of 3.66 million rural residents were not resolved. To boost the economic and social development of the two contiguous poor areas, in accordance with the guideline of “mutual promotion between regional development and poverty reduction”, Chongqing City constantly improved the infrastructure in impoverished regions, cultivated backbone industries, reduced the rural poverty and significantly improved the living standards of farmers. As of the end of 2013, the number of poverty-stricken people of this city was reduced to 1.39 million and the incidence of poverty fell to 6%.
The overall situation of poor rural areas in Chongqing is reflected by "three large numbers, four low levels and two concentrations". First, a large number of poor counties, a large number of impoverished villages and a large number of poverty-stricken people. The city has 14 key counties for national poverty reduction, four key counties and districts for provincial poverty reduction, accounting for 45% of the total counties and districts of the province and 2.4% of the total of our country; and it has 15 non-key districts and counties for poverty alleviation and development. There are a total of 2,000 poor villages in the city, accounting for 22.3% of the total; some villages are not covered by the "Eleventh Five-Year Plan", but the per capita net income of 1176 of the villages is less than 3000 yuan. According to the poverty line of 1400 yuan, 30% of the per capital income of farmers, the city has a poor population of 1.4434 million, accounting for 6% of the rural residents and 3.54% of the national rural residents, and the poverty-returning rate of the city is up to 5% or so. Second, low educational level, low cultural level and low living standard of the poor, poor infrastructure and low level of social development in impoverished regions. Third, relative concentration of poor areas and poor people. Wuling Mountain Area and Qinba Mountain Area go across the Southeast and Northeast Part of Chongqing, becoming the regional concentrated with poverty-stricken people.
2.2 Main practices
2.2.1 Main practices of Chongqing municipal government departments
22.214.171.124 Target at poor farmers and increase support for pig breeding
Since the implementation of the poverty reduction by “sowpig” industry, targeting at the poor households, based on the characteristic industry of pig breeding, through supporting leading enterprise (Sanmu Group), Chongqing City Party Committee and Chongqing City Poverty Alleviation Office has achieved the goal of benefitting the farmers, enterprise and the government at the same time. First, Chongqing City Poverty Alleviation Office increased support for leading enterprises, including the introduction of preferential policies on tax deduction and exemption, fiscal subsidy and industry support, to boost the development of local leading enterprises of Chongqing. Sanmu Group witnessed rapid growth in this context. Secondly, it increased support for industries. Based on the features of pig breeding industry in the city, Chongqing City Poverty Alleviation Office actively learned from overseas poverty alleviation experience, took characteristic industries as a breakthrough, and strived to promote the production and income growth of farmers in poor areas. Thirdly, Chongqing City Government increased financial inputs for poor rural households. In 2011, Wanzhou District of Chongqing City issued subsidies of 3.4039 million yuan for the breeding of 34039 sows, benefiting 14961 rural households. The implementation of subsidy policy for sow breeding mobilized the enthusiasm of farmers for sow breeding, protected sow production capacity, improved pig marketing rate, stabilized pig production, guaranteed the supply of pork market in the district and promoted the sustainable and healthy development of pig production in the district as well.
126.96.36.199 Promote poverty alleviation jointly with leading enterprises to accelerate the development of characteristic industries
Sanmu Group intended to expand its animal product base and expand its production, supply and marketing scale. Local government wanted to improve the species of pigs and boost the development of pig breeding industry in impoverished regions. Thus, supported by local government, Sanmu group designed the Sowpig industrialization-based poverty alleviation project. In the implementation of this project, the government, the enterprise and farmers have common interests and the same purpose. The development of pig breeding industry has a broad mass base and the poor farmers have high enthusiasm for it. Sanmu Group has funds, technologies and market and has professional technicians in pig breeding and a variety of sales outlets. Chongqing municipal government actively encourages and supports the development of leading enterprises. These three conditions ensure the common goal of the enterprise, farmers and the government, forming a community of interests of government -farmers - enterprises.
188.8.131.52 Strengthen related infrastructure construction and expand sales channels of pig breeding industry
Backward infrastructure has been an important factor restricting industrial poverty alleviation in poor areas. Since the implementation of the poverty alleviation by "sowpig" breeding, Chongqing municipal government departments increased financial investment in hog house building and greenfeed planting, strengthened the improvement and upgrading of roads and farming facilities, focused on processing and circulation, adjusted and optimized the industrial structured, promoted the development of planting and breeding, strengthened processing industry, improved the circulation and service industry and strived to expand sales channels of pig breeding industry.
184.108.40.206 In cooperation with Sanmu Group, strengthen technical support for rural poverty reduction
Since the project implementation, through cooperative training jointly with Sanmu Group, the city promoted pig breeding technology. In 2000, the city’s pig epidemic prevention rate exceeded 95%; the swine artificial insemination technology was promoted to millions of rural households; pig breeding with mixed feed developed from scratch with production and sales volume up to 3.57 million tons, covering 40% of the farmers; 85% of the pigs were fed raw feedstuff. The technical service system was improved, the animal husbandry agencies are well equipped and have strong technical force and rich experience in extension services. Currently, there are a total of 1802 animal husbandry and veterinary technical services promotion agencies and regulatory agencies, including seven municipal-level ones, 177 county (district, city)-level ones and 1618 township (town)-level ones. The city has now a total of 10082 livestock husbandry veterinary technicians, including 192 senior technicians, 2189 mid-level technicians and 7701 junior technicians, accounting for 2.0%, 21.8% and 76.2% respectively.
2.2.2 Main practices of Chongqing Sanmu Group
Located in the Three Gorges Reservoir Region of Chongqing City, Sanmu Group is an enterprise in a national key county for poverty reduction. In order to further expand its business base, expand production and its one-dragon business scale, to respond to the city government’s call of “promoting breeding industry in poor areas”, with support from local government, Sanmu Group designed the Sowpig industrialization-based poverty alleviation project of Chongqing City and adopted the following effective measures to promote the project implementation.
220.127.116.11 Provide financial support and technical guidance to enhance the enthusiasm of farmers for participating in project implementation
Pig breeding is a traditional industry in rural area of Chongqing City with a broad mass base and low risks and can easily be accepted by farmers. Sanmu Group actively provided financial support and technical guidance to solve the worries of poor farmers. Three Gorges Animal Husbandry Group has strong financial strength and fixed assets of 250 million yuan and is engaged in livestock breeding, agricultural processing and agricultural science and technology services. It has strong technical resources and a total of 2600 employees and 948 technicians, including 36 middle-level and senior technicians, and has established long-term cooperative relationship with many research institutes. It is equipped with slaughterhouses, meat processing plants, feed mills and animal remedy plants. The group is not only the main purchaser of the pig market, but also the main supplier of animal remedy and feed market. These favorable conditions have solved the worries of the rural households without development fund, technical support and sales outlets.
18.104.22.168 Encourage poor farmers to get involved in project construction and establish the "business - farmers" interests community
To achieve benefits jointly with the farmers, Sanmu Group made innovations to the existing mechanism, gradually established the new pattern of close cooperation with rural households, and gave full play to their respective advantages to jointly resist market risks and improve the overall efficiency of the enterprise and farmers. First, set up the stock breeding plant to guarantee fine sowpig provision for farmers as planned. Second, conducted strict management. The group has set up technology service stations in 12 towns. Third, arranged one veterinarian for each technology service station to address technical problems and record the information of each cow; gave each breeding household a notebook to record the growth information of each cow. The rural households were not required to repay the feedstuff fee until the cows are sold. As a result, Sanmu group’s profit grows year by year. Through processing repurchased pigs and promoting the development of feedstuff industry by sowpig industrialization, its profit increased from 10 million yuan in 2000 to more than 20 million yuan in 2004, achieving the goal of win-win situation of the enterprise and rural households.
22.214.171.124 Cooperate with scientific research institutes to solve technical problems
Sanmu Group has established long-term cooperative relationship with many universities and cooperated in the implementation of a number of projects. In the implementation process of this project, it got technical support, invited professors of Southwest University to give guidance and hold trainings. Through the experts’ guidance, its sow hybridization rate raised from 71.4% to 85.7%. Since the implementation of the sowpig industrialization-based poverty alleviation project, 12 towns of Chongqing City have got involved in the project construction, benefiting 32,900 households, including more than 9,000 poor households, increasing farmers’ income significantly. By 2004, the farmers’ total income increased by 150 million yuan or so, net income increased by more than 45 million yuan and per capita income increased by 390 yuan. The investment in poverty alleviation achieved good results, and the investment of each one year of poverty-relief fund will lead to the increase of 224 yuan in corporate and farmers income. Technologies played a significant role in promoting poverty reduction.
126.96.36.199 Implement the low-cost operation mechanism to promote the comprehensive development of pig breeding industry
Sanmu Group has its own improved species cultivation base and can provided improved sowpigs for rural households, but the prices of such sowpigs is very high and the number is limited. The group implemented the mode of “returning sowpigs” for “sowpigs” – the enterprise provides an improved sowpig for each household free of charge first, then the household must return two sowpigs to the enterprise after the sowpig grows up, and these two sowpigs are then transferred to other two households, and four sowpigs are required to be returned. In the process of the sowpig promotion, through providing sowpigs free of charge, Sanmu Group achieved resource sharing and cycling and considerable profits. Meanwhile, the rural households achieved production and income growth and shaken off poverty.
188.8.131.52 Implement compensation and recovery mechanism to ensure farmers' production and income growth
Sanmu group implemented compensation and recovery mechanism for poor rural households. Without adequate funds, scattered everywhere, the poor farmers can hardly afford the production means. To this end, Sanmu Group allowed the pig breeding households to buy on credit feedstuff and animal remedy and repay the fee after the pigs are sold. In addition, Sanmu Group repurchased the pigs bred by farmers to ensure the smooth sales outlets of the rural households and thus achieve stable income growth of the farmers. The key to the successful implementation "sowpig" industrialization-based poverty alleviation projects lies in mechanism extending and grafting and the attempts of product returning and compensation. In such a way, Sunmu Group and the poor farmers achieved a win-win situation.
184.108.40.206 Strengthen technical training to enhance the professional skills of poor farmers
Sanmu Group launched demonstration projects in 100 villages of Chongqing City. Relying on township support, on-site demonstration, field visits, etc., it held skills trainings, and sent technicians to give guidance on technical problem addressing in the process of sowpig industrialization, such as technical problems in cows’ estrus to improve cows’ ability to conceive. To this end, the group sent someone to stay in the villages and record the growth information of each cow. The group provided feedstuff and arranged special technicians to provide consulting services for the farmers to address the practical problems they encountered in the pig breeding process. In addition, Sanmu Group held special trainings on sowpig breeding technology. In short, through professional pig breeding skills training, it enhanced the farmers’ awareness of market and improved their professional skills and ability to shake off poverty.
220.127.116.11 Strengthen infrastructure construction to enhance the added value of pig breeding industry
In the whole implementation process of the poverty alleviation project, the profit of Sanmu Group mainly came from the added value after processing of recovered commercial pigs and the returns arising from the development of animal remedy and feedstuff industry. In addition, the sowpig industrialization-based poverty alleviation project has provided stable sources of goods for the group’s slaughter house, and the supporting traditional Chinese medicine base could also get a large quantity of pollution-free fertilizer. Sanmu Group’s profit increased from 12 million yuan in 2000 to more than 20 million yuan last year.
3 Implementation Effect
3.1 Production and income growth of poor farmers
Since the implementation of the poverty alleviation by the industrialization of sowpig breeding in Chongqing, the total income of the farmers of the project areas increased by 165 million yuan, the net income increased by more than 49.5 million yuan, 1412.3 yuan per household and 404 yuan per capita. The government investment of every one yuan will increase the income of farmers by 24 yuan. Poor farmer Bie Mingquan from No.2 Team of Ciping Village in Kuihua Town of Wanzhou District has four family members. In 2000, his family’s per capita net income was less than 600 yuan. He took part in the sowpig industrialization-based poverty alleviation action on December 25, 2000. By 2004, his family had bred three sowpigs and three improved boars and recorded pig-breeding income of 15000 yuan.
3.2 Gradual increase of business efficiency
Through commercial pig recovering and processing for value increment, through sowpig breeding, Three Gorges Animal Husbandry Group promoted the development of animal remedy and feedstuff industry and witnessed profit growth year by year. Its profit increased from 12 million yuan in 2000 to more than 20 million yuan in 2004, and its animal remedy sales revenue increased from 120 million yuan in 2000 to 310 million yuan in 2004. In addition, through building its own brand, improving pig species and improving product quality, it further expanded the pig market at home and abroad and gradually increased its business efficiency.
3.3 An increase in government tax revenue
The “sowpig” industrialization-based poverty alleviation project achieved good social and economic benefits. It has not only expanded the business scale, stabilized the industry chain, but also increased local fiscal revenue. While promoting its own growth, Sanmu Group paid more and more taxes to the government. The taxes it paid increased from less than one million yuan in 2000 to 5.6 million yuan in 2003, 6.3 million yuan in 2004 and 10.3 million yuan in 2005. The implementation of the “sowpig” industrialization-based poverty alleviation project has not only promoted the development of the corporation, but also expanded the sources of taxes of the government and increased the tax revenue of Chongqing City Government, laying a solid foundation for the government to provide better public services.
3.4 Rural industrial structure has been optimized
Since the implementation of the “sowpig” industrialization-based poverty alleviation project, the city has achieved good social and economic benefits and vigorously promoted the development of rural poverty alleviation and development. This project has set a good example for the industrialization-based poverty alleviation and development work. Through the implementation of the “sowpig” industrialization-based poverty alleviation project, the proportion of the food production value of rural area in Wanzhou District of Chongqing City in the agricultural production value fell from 35.1% in 2000 to 25.2% in 2005, the proportion of the output value of livestock industry rose from 38.5% in 2000 to 44.2% in 2005, and the proportion of sowpig breeding project in rural families’ total income increased, boosting the overall economic development.
3.5 Farmers’ ideas developed towards the positive direction
With the implementation of the sowpig breeding project of Chongqing City, the commodity consciousness and awareness of science and technology of the farmers in the project areas have been significantly improved. Under the guidance of the technical personnel of Sanmu Group, the poor households learned the farming technique, feed formulation skills and disease prevention and control techniques, significantly enhancing the pig slaughter rate. At the same time, this project raised the level of commercialization of local pigs, changed some farmers’ habit of pig breeding for their own families, and made the pig commercialization rate reach 90%. The implementation of "sowpig" industrialization-based poverty alleviation project changed farmers’ traditional farming concept, enhanced the farming skills of poor households, stimulated the market-oriented thinking of poor farmers and promoted the development of farmers’ ideas towards the positive direction.
4 Existing Problems
4.1 Low degree of specialization of characteristic industries and poor market driving effect
Industrialization is an important step in the transformation of agriculture from the traditional business model to modern business model. Since the implementation of the sowpig industrialization-based poverty alleviation project in Chongqing City, the rural households have not taken pig breeding as a professional job to study as most of the farmers are women, elderly, weak or disabled persons with primary school education. As a result, their professional skills have not been enhanced and the professional division of labor is not so clear, so few rural households are specialized in pig breeding and few engaged in large-scale pig breeding, not conducive to the development of characteristic poverty alleviation projects and pig breeding industry.
4.2 Lack of brand effect and weak market expansion
The pork and byproducts of Chongqing’s "sowpig" industry are of few varieties and cannot meet the needs of consumers at all levels, and no high-grade products under famous brands are made in large scale, not fully reflecting local characteristics and not in line with the market demand, lacking scientific standards and a quality assurance system, failing to enter the international market without using the international standards. Meanwhile, information failures and weak market development are also the weakness of the program.
4.3 Unskilled poor farmers and loose organization
The rural households involved in Chongqing’s "sowpig" breeding project are not skilled, their overall quality is rather low, their traditional ideas need improvement, and many problems encountered by the farmers in pig breeding cannot be resolved timely. The farmers did not have strong self-development capability, and their family production and management level is rather low. Due to the unhealthy production and management system, the organizational degree of farmers’ cooperation is not high, and the scale production and professional operation are still at the initial stage, directly affecting the rural households’ management level and income. Plus the price fluctuations of farm produce, the rural households’ pig breeding income level is low and unstable.