Traditional agriculture cannot lift poor people out of poverty, beset as they are with unfavorable natural conditions. So how can we win the battle against poverty? The problems faced by Baise in the Guangxi Zhuang Autonomous Region are typical. So how did Baise lift 134 impoverished villages out of poverty in just the last year?

Facilitating poverty alleviation through distinctive local businesses and helping poor areas to build a capacity for self-development are the main poverty alleviation themes of this year’s government report. Poverty alleviation through industrial development in Baise provides an example for old revolutionary base areas.

Dragon fruit key to lifting an impoverished village out of long-standing poverty

Zhenliang Village is located in the Dashi mountainous area on one side of the Youjiang River Valley, in Silin Town, Tiandong County, Baise. Several previous attempts to rid the village of poverty were unsuccessful, but finally the planting of dragon fruit proved the key to success.

“Afflicted by a shortage of water and good quality soil, farmers in Zhenliang Village were reduced to growing corn in cracks between the rocks. They could earn only 200–300 yuan (U.S. $29–44) per mu (0.16 acre),” says Liang Qingsong, a young Party member from the village.

After graduating in 2008, Liang Qingsong chose to leave the village in search of work. Learning that the soil and climate in his hometown might be suitable for growing dragon fruit, he was struck by the idea of returning home to start his own business. In 2012, he rented 5 mu (0.82 acre) of land to cultivate dragon fruit, and extended the plantation to 50 mu (82 acres) the following year.

In 2014, the authorities in Tiandong County began to focus on the poverty alleviation model known as “new types of business entity+ base + impoverished households”. The county government helped Liang Qingsong to transfer the usage rights of 500 mu (820 acres) of land, and at the same time provided him with cement supports for the saplings as well as subsidies for seedlings. Liang immediately established the first professional dragon fruit planting cooperative in Tiandong County, with all 45 impoverished households in the village joining in.

“The annual land rental is 800 yuan (U.S. $117) per mu (0.82 acre), and each household cultivates about 5 mu (0.82 acre). Every household bought a share in the cooperative with 5,000 yuan (U.S. $731), which came from industrial development poverty alleviation funds allocated by the county government. At the end of the year they receive a dividend of about 800 yuan (U.S. $117). The base employs 30 long-term workers with a monthly salary of 1,600 yuan (U.S. $234). One family member working in the base can bring an annual income of at least 25,000 yuan (U.S. $3,655) to the family,” says Liang Qingsong.

The area under dragon fruit cultivation has now been extended to 1,500 mu (247 acres), covering 840 impoverished households from 3 impoverished villages. Liang aims to extend this to 20,000 mu (3,295 acres), generating 200 million yuan (U.S. $29.24 million) in revenues and lifting thousands of impoverished households out of poverty.

Fostering new types of business entity is an important element of poverty reduction in Baise. To date, more than 80 percent of impoverished villages in Baise have set up professional cooperatives.

“The close connection between the interests of impoverished households and the new types of business entity reduces the risks taken by impoverished households when they engage in commercial activities. It also stimulates their belief that they themselves can play a proactive role in eliminating poverty,” says Li Wenxin, researcher at Guangxi Academy of Agricultural Sciences.

“Poverty alleviation can only work when businesses are able to access a substantial market,” says Liang Qingsong. When he rented the land in Zhenliang Village, he promised to return all the land under dragon fruit to the villagers in 5 years, and only be responsible for cultivation of seedlings, consulting, and sales. 

At present, the cooperative mainly sells its dragon fruits in Guangdong. This year, with the help of the “Baise—Beijing” special fruit train, the cooperative plans to extend its market to the capital. 

“In essence, industrial development is a kind of business activity that must follow the rules of the market. Special attention should be paid to the leading role of new types of business entity,” says Zheng Fengtian, vice-dean of the School of Agricultural Economics and Rural Development at Renmin University of China. 

Finance converges the market

Poverty alleviation through industrial development cannot work without financial support. Compared with traditional agriculture, growing specialist crops such as fruits needs substantial initial investment and is capital intensive. Through a mortgage on the 550 mu (91 acres) of land he transferred, Liang Qingsong borrowed 2.5 million yuan (U.S. $365,500) in 2016, and expects to pay it back in 3 years.

Every impoverished household in Baise can borrow 50,000 yuan (U.S. $7,310) as poverty alleviation micro-loan with the interest payments subsidized by the government. But fearful of the risks posed by fluctuations in the market, many of them dare not invest the loans in industrial development.

Long Xiuzhen, head of an impoverished household in Fengji Village, Nanpo County in Jingxi, was faced with this very dilemma. The village is suitable for planting mulberry and raising silkworms, and some villagers had already achieved prosperity through this activity. Long has 6 mu (0.99 acre) of hilly land, on which she plants corn every year. Beset by poverty, the Long family lived crowded together in shabby old houses built of tile and wood. Although she admired the families involved in raising silkworms, she dared not try herself for fear of losing money.

Jingxi Xinshengjian Silk Company offered an opportunity to Long Xiuzhen. She bought shares in the company with a poverty alleviation micro-loan and now receives a dividend of 5,000 yuan (U.S. $737) each year. The company also provides technical guidance, guarantees the supply and quality of silkworms, and conducts unified purchase, which put Long’s worries to rest.

“40 kg silkworm cocoons can sell for more than 1,000 yuan (U.S. $146),” says Long. “This is many times the income generated by several mu of corn. I transferred all of my land to planting mulberries. My harvest of spring silkworms can sell for 5,000 yuan (U.S. $737); together with the dividend, I will certainly be rid of poverty this year.”

Regarding the low take-up of micro-loans, Baise is now trying out a new model of poverty alleviation financial support: The village has set up a registry of approved businesses and cooperatives. These are eligible for loans from commercial finance companies, with interest payments subsidized by the government. Impoverished families are encouraged to buy shares in the companies using poverty alleviation micro-loans, and they then receive annual dividends. Last year alone, 300,000 impoverished households benefited from this program. 

Under the Baise model, the more impoverished households a company employs, the more financial support it will get. Jingxi Xinshengjian Silk Company employs 800 impoverished households, and receives funding of 40 million yuan (U.S. $5.85 million) in return. This policy encourages leading agricultural enterprises to join in the poverty alleviation effort.

“Poverty alleviation through industrial development is an existing solution,” says Li Wenxin. “Targeted poverty alleviation through industrial development is a new one. The Baise model aims to solve problems such as the effective disbursement of funds and the low capacity of impoverished households to withstand risk, as well as the financing difficulties faced by enterprises. It thereby enables impoverished households to enjoy the full benefits of industrial development.”

The benefit sharing mechanism among impoverished households, cooperatives and leading enterprises in Baise enables the characteristic industries involved to grow bigger and stronger. For example, the area planted with mango has reached 1.15 million mu (189,448 acres), with an annual output value of 4 billion yuan (U.S. $584.8 million), and it is reckoned that 68,000 impoverished households representing 252,300 people have been lifted out of poverty. Mango cultivation in Baise has therefore become a model poverty alleviation case of developing characteristic and competitive industries.

“Able cadres” shoulder the burden of mass work

Pan Congcong is a post-90s graduate from Tsinghua University. In October 2015 she was transferred from the Discipline Inspection Commission in Guangxi to the post of first secretary to Fengfang Village, Lucheng Yao Ethnic Township, Tianlin County in Baise.

Soon after taking up her post, Pan Congcong found herself confronted with a challenge. The villagers earned very little from planting corn on the hillsides. With a very good local market, raising chickens offered the possibility of a much higher income. But, fearful of the risks involved, villagers were reluctant to try the business out. The Tsinghua graduate had to first teach the villagers how to calculate simple financial accounts.

“During the day, the villagers all worked in their fields,” says Pan. “We could only gather to discuss how to develop the chicken business and carry on mass work in the evening.” Meetings often lasted late into the night. When the last of the villagers had left, Pan would switch off the lights and lock the door, before returning home herself.

Her tireless efforts served to inspire the villagers. In 2016, with the support of a county policy that provides rewards for successful initiatives rather than subsidies, villagers in Fengfang Village raised more than 70,000 chickens. This has increased the income of every single impoverished household by more than 20,000 yuan (U.S. $2,924).

“Lack of training, technology and confidence is the main characteristic of impoverished households,” says Li Wenxin. “Turning sound policies into tangible businesses needs cadres responsible for poverty alleviation to ‘walk the last mile’. To mobilize villagers they need to have ideas and ability, but they also need to be able to calculate accounts.”

Located in the rock desertification mountainous area of Shechang Town, Multinational Autonomous County of Longlin, Xinzhai Village suffers from a severe shortage of water and good quality soil. In October 2015 Luo Zuocheng took office as the village’s first secretary. At the sight of the bare and stony mountains, he was tempted to back out of the assignment.

Instead he buckled down to some research, and established that raising black pigs might offer a route to help the village escape from poverty. But in the village, where there was space to raise pigs there was no water, and where there was water there was no space to raise pigs. He came up with the idea of “enclave economy” — an arrangement that breaks the administrative divisions between two or more administrative units, to allow them to coordinate economic development.

Following extensive efforts, he found a piece of land 90 km from the village and built a pig farm there. He established a cooperative in which all the impoverished households in the village took a share with their poverty alleviation loans. The cooperative now has more than 300 pigs, and each impoverished household has increased its income by about 10,000 yuan (U.S. $1,462). 

Luo Zuocheng speaks with great passion of his first efforts to mobilize the villagers: “Many impoverished households were trapped in passivity. Together with other village cadres I went door to door, visiting them and speaking to them again and again. At 6 o’clock in the morning, before they got up, I was already waiting outside their doors.” 

Baise is a famed old revolutionary base as well as an impoverished area. “Able cadres” there are casting off their label of “academics” to become thought-leaders in poverty alleviation. 

The article was translated by Jin Ling and its original unabridged version was published in Chinese.