Fostering Farmer Cooperatives in Poor Western Communities of the People's Republic of China

Abstract

This policy note summarizes the People's Republic of China's experience with pro-poor farmer cooperative formation and comparative lessons from international experience.

Farmer cooperatives are one mechanism for strengthening the position of poorer and more vulnerable rural producers and making markets more inclusive. The People's Republic of China (PRC) promulgated a national Law on Specialized Farmer Cooperatives (hereafter the Law) in October 2006 to address a widening rural-urban income gap and the need for farmer self-development articulated by the 17th National Congress of the Communist Party of China. In less than six years, the number of cooperatives has increased rapidly to over 550,000, covering 17% of farm households. The Ministry of Finance provided CNY750 million in financial support to these cooperatives in 2011, and provincial finance departments an additional CNY1 billion.

This policy note summarizes the PRC's experience with pro-poor farmer cooperative formation and comparative lessons from international experience. The note also identifies options for strengthening inclusive farmer cooperative activities within the Outline and corresponding policy recommendations.