China Development Brief, No. 53 (Spring 2012)
In recent years, the international co-operative movement has gained ground across the globe, with the business model it promotes, the co-operative, now forming an integral part of our society. Co-operatives come in many shapes and forms, but are generally enterprises or organisations jointly owned and run by those who make use of their facilities and services. Individuals are able to pool together resources to generate profits and cost-savings that would not have been possible if they were on their own. Co-operatives are also seen to have more ethically, consumer and worker-focused policies, often balancing profit-making against the interests of the wider community.
To celebrate and highlight the benefits co-operatives bring to communities while also enhancing cooperation between the international co-operative movement and other key players such as governments, the United Nations designated the first Saturday of each July as the International Day of Co-operatives, with each year having a different theme. The theme for 2014 is ‘Co-operative enterprises achieve sustainable development for all’, and focuses on the role of co-operatives in safeguarding favourable living conditions in the communities they operate in.
To celebrate this day, CDB chose to highlight this article about a cooperative in Anhui province, originally published in 2012.
CDB Senior Staff Writer, Guo Ting, delves into the fascinating world of rural cooperatives in this profile of an Anhui cooperative founded by Yang Yunbiao, a former rural rights-defense (weiquan) activist..
This article is part of a special section in Issue No. 53 devoted to NGOs in Anhui, a province that has in the past received scant attention for its NGO activity. Rural cooperatives are also a subset of the NGO community that has received little attention. According to the 2006 Agricultural Specialized Cooperatives Law, cooperatives should register as a commercial enterprise, and yet many also have a social, community-based mission. Some scholars as a result count them as NGOs or nonprofits or social enterprises.
As the saying goes, those living on a mountain live off the mountain and those who live near the sea live off the sea – so, one has to make use of one’s local resources. But, for the large agricultural province of Anhui, it is the land that forms the only livelihood of most people. This is perhaps the reason why the farmers of Anhui are frequently at the forefront of agricultural innovation and reform. Thirty years ago, the villagers of Xiaogang were the first to sign onto the new contracting system, daring to be the first to fight for systemic reforms; fourteen years ago, the farmers of Nantangxing Village in Sanhe Town, Yingzhou district of Fuyang city in northern Anhui, in order to protect their land rights and interests, came together in Beijing to fight for their rights, a move that shook the entire nation. Today, that fight has long been settled, and those farmers who returned home safely are still brave risk-takers in rural development1.
Making a profit from public interest
The thin mist and drizzle cannot stop the biting cold in the first month of the Chinese New Year, and although some fresh green paddy fields on the Huai Plains of the Yangzi River show early signs of spring, northern China is still in the angry clutches of the winter chill. On the sixth day of the new year, following my earlier plans, I got off the bus along the recently opened rural route at the Sunzhuang intersection in the outskirts of Fuyang City, and was met by a young lady clutching an umbrella who immediately rushed over. The lady is Fu Li, a long-term volunteer from the Liang Shuming Center for Rural Construction (乡村建设中心) in Beijing, and she is here to support the agricultural cooperative in Nantangxing Village. As I was turning down the road to the village, my eye caught sight of the main cooperative building, sitting only 200 meters away.
This white three-story building was erected in 2008, by none other than the famous Taiwanese eco-friendly architect Hsieh Ying-chun. It is consistent with the theories of environmental protection, as it uses only local construction materials and was built by the local villagers themselves. Walking inside, I was met by a gust of clean, fresh air. The entire building is light and spacious, and is of a style that differs greatly from the other local buildings. This style is said to be a typical Taiwanese architectural style, which is especially cool and ventilated for the summer months.
The chairman of the cooperative, Yang Yunbiao, waits in an office on the second floor; lying on the floor are several cases of newly distilled spirits, the mouth of one bottle accidentally broken open. The entire room is filled with the scent of the sorghum spirit, as the forthright and outspoken Yang begins our conversation.
In Yang’s view, in order to improve the famers’ quality of life, finding profitable business opportunities is the key challenge. The cooperative had once considered, in its early years, introducing a knitting industry for the seniors, and now it plans to expand into both the organic food industry as well as the rural tourism industry. However, it is clear that the profitable distillery is the biggest success of the past two years. In 2010, the cooperative began setting up the distillery as a joint-stock business, and sought advice from the village seniors about the best traditional distilling method. The idea was to use their home-produced sorghum method to create pure-grain spirit, and now, after two years, the distillery is reaping the rewards of these efforts. Currently, annual alcohol production is approximately 7-8 tons, which generates a profit of around 60,000 yuan, split as dividends for the shareholders. And of course, in return for the investment, shareholders are given some of the distillery’s own spirits, which not only saves on capital which can continue to be used for production, but also allows shareholders to use the alcohol to host parties or as gifts, in turn improving the distillery’s reputation. According to industry experts, the quality of the spirits is actually quite good, and a pressing concern is to get the brand name out into the public. Some time ago, the Beijing NGO, Migrant Worker’s Home (工友之家), held an event in which the director, Sun Heng, ordered ten cases of the alcohol from Yang who, it was said, received quite positive feedback. Thus, Yang jokingly requested that I help to advertise the spirit among NGOs, to capture a market share in public interest circles, and establish the spirit as the preferred drink of public interest organizations.
Just as our conversation was in full flow, a shareholder of the distillery brought along his son, who works away from home and had only returned for the New Year to pay a visit to Yang. Suddenly, the room was filled with people, dreaming together about the distillery’s future. Yang and the shareholder said that if they could construct a new building, they would start by creating a two-story cellar and use it to store the alcohol. They also planned to work together on developing the village’s rural tourism industry by inviting selected tourists to participate in tastings. Alternatively, they might work with cooperatives in other areas with complementary resources. One idea was to partner with a Hubei cooperative producing gastrodia (an ingredient in Chinese traditional medicine) to produce medicinal spirits, which would help improving their overall market prospects.
Aside from the distillery, a division of the cooperative had set up a micro-financing credit union that sees annual profits of around 20,000 to 30,000 yuan. In 2005, when the credit union first disbursed dividends, each share cost only 14.50 yuan, but now, each share it costs 150 yuan. Another major business operation and source of income is the collective procurement of agricultural materials, which mainly consists of the cooperative buying low-cost seeds, fertilizers, and other, similar products from the suppliers, and then selling them to the cooperative members. Furthermore, as local laborers increasingly work outside the village, there is a lot of untended land. The cooperative has rented a substantial amount of land to be used for farming. Ever the entrepreneur, Yang also drew lessons from the Beijing Little Donkey Farm (小毛驴) model, and is planning to use the excess land to not only develop agricultural opportunities but also develop the area’s rural tourism potential. Yang told me that the day after our meeting he plans to go to Fuyang to inspect some model tourist villages, in a bid to get this model implemented county-wide before year end in 20122.
As we sat in the spacious and bright office, with the rich fragrance of liquor in the air, we chatted about ways of increasing revenue and profits. Thinking back to over ten years ago, when the farmers demonstrated in Beijing to protect their rights, spending many restless nights holed up in an alley somewhere near the Dongdan area of Beijing, it feels to Yang as if that was an entirely different world. However, Yang thinks that this is inevitable in times of rapid change and development. When he went to Beijing for a meeting ten years ago, activist groups were everywhere, but if he were to go again today, most would be building cooperatives and rural development organizations. Most of the rights-protection groups found it difficult to adapt to the rapid changes of the outside world, and following failures, they disbanded.
However, when comparing the rights struggles of that time with today’s rural construction, to see which is more important, Yang still thinks that the earlier struggles were an indispensable process. These are entirely different times, and back then was a time of difficult circumstances, wherein if you did not rise up and struggle, survival itself became difficult. From experiencing the bitter struggle, the villagers now appreciate more fully these modern days of stability and financial opportunities.
Today’s environment is much better than in the past – the early land rights struggles have now adopted organizational forms, the objectives of the early years have been realized, and rights campaigners and the government get along better. In 2006, the government issued an Agricultural Specialized Cooperative Law, which came into effect a year later. Following this law, Yang and colleagues immediately went to Yingzhou District Trade and Industry Bureau to register, and although the Bureau had not yet stocked any registration forms, it was simply a matter of downloading the documents from the internet to complete the registration.
Reconstruction of Rural Community Life
From the mutual aid society to the joint-stock distillery, the goals of the cooperative, in addition to making money, also include the vision that by getting the rural community to collaborate in production, rural residents can move away from an individualistic way of living and towards a more public-minded community, and in doing so change the dominant view in society of only looking out for oneself.
When Yang was a child, everyone was very poor, but he remembers that every time a beggar arrived from outside the village, every household would, regardless of their wealth, spare a bread bun and a hot meal. Several decades later, as production rapidly increased and the economy gradually improved, another form of poverty emerged – the indifference and estrangement between people. As Yang sees it, the 30 years following the reforms has, in some ways, been a process of transformation into organizations, which has undermined the original intimacy and camaraderie amongst villagers. Many people now not only do not sympathize with others, but do not even seem to show concern for their own relatives. At the same time, as the economy develops, the rich/poor divide is becoming increasingly obvious, and while the wealthy are getting more powerful, the poor become more vulnerable. One incident that particularly troubles Yang was that last year, two elderly villagers committed suicide. The two villagers were both over 70 years old, and could not work in the fields or labor elsewhere, and their children had abandoned them. On Chinese New Years, they felt particularly lonely and isolated and took their own lives in an act that shook the entire village.
Coming from his many years of experience, Yang is of the opinion that the key to changing the status quo is to encourage people to move out of the isolation of their own homes, for everyone to come together and rebuild a communal way of life in the village. In 2010, Yang went to visit a village in Taiwan, where he found that the local villagers operated a “communal kitchen” in which every family in the village takes turns to host, and everyone else brings their meals to the host family to eat together. Yang started out thinking that this system was rather too formal and a little boring, but after joining in a few times, he found that sharing a common table for meals truly was the best way to bridge the gap between people, allowing the villagers to establish trusting relationships. And because of this system, everyone developed very friendly interpersonal relationships in that village3.
In fact, Yang’s own family relationship is an excellent example. Yang has four other brothers, and every year, around the time of his mother’s birthday, all the extended family, children and grandchildren alike, get together to wish her a happy birthday. Everyone gets together under one roof to play games and take part in other activities, and over time, deep relationships have formed. The villagers view Yang’s family as the most tight-knit in their locality.
In addition to promoting interpersonal exchanges, communal ways of life also emphasize shaping the better aspects of human relationships. Several years ago, one of the reasons that the Nantang Agricultural Cooperative introduced the Robert’s Rules of Order was to emphasise that when communicating, everyone should be equal. However, after Nantang started flourishing, Robert’s Rules are no longer used. As Yang explained, the rules were very effective at resolving large differences, but now that the cooperative’s actions are less controversial and everyone’s interests are more aligned, differences are getting smaller. Moreover, as long as everyone has the group’s common interests at heart, then it is only a matter of moving forward without the need to vote on every matter4.
In order to rebuild community life, there is currently a rich variety of regular activities organized by the cooperative, with a members’ meeting on Monday, the Senior Society activities on Wednesday, cultural activities on Saturday and child-care activities over the weekend. There are quite a few participants each time, but the biggest headache for Yang is that participants are all aged forty and upwards, with a lack of young newcomers. Because this impacts on the future development of the cooperative, Yang has been trying over the past couple of years to attract and train young people to become the future backbone of the cooperative. However, it is very difficult as Fuyang is a village of migrant workers with 90 percent of its young people working elsewhere, and they are all have become accustomed to lifestyles in the big cities, and their hobbies and experiences are centered around urban life. They return home during public holidays, but often their experience is limited to visiting relatives and family festivities, so their impression of home is that of watching TV and playing cards – meaningful conversations are rare, let alone discussions about village community life5.
The cooperative has spent quite a lot of thought on how to keep these young people. By taking advantage of the recent Spring Festival, when all the young people returned, the cooperative organized a number of activities which included not only singing, game playing, lotteries, but also discussion groups, book clubs, and other, similar events. The cooperative hoped that using these types of activities would strengthen everyone’s interactions and deepen their understanding of their hometown; they hoped to use practical events to tell young people that there is a different way of life at home other than drinking and playing cards, one that involves communal discussions and book reading. Yang hopes that by strengthening their sense of community, the young and the old can build a strong social network, and leave both groups with fond memories.
Of course, to retain young people who are well paid in their work elsewhere, it is critical to provide attractive employment opportunities. In Yang’s own words, young people need financial returns, and one cannot hope that everyone can share in the same ideals. From this perspective, the cooperative’s distillery, the credit union, and the agricultural procurement projects also have some value, but it is far from enough, and they are still searching for projects that are more suitable for young people. Apart from rural tourism, Yang plans to apply to the rural livelihood program run by Heifer International’s Anhui Office”, hoping to create more projects which will ultimately allow for public welfare, income, ideals and reality to successfully come together6.
Editor’s Note: The article refers to a period of time when farmers came to Beijing to petition mostly on issues related to land seizures. In the early 2000s, some of these rights-protection farmers began to work with intellectuals who persuaded the farmers to return to their homes and channel their energies into setting up cooperatives. ↩
Editor’s Note: The Little Donkey Farm (小毛驴) is a cooperative/social enterprise established in Beijing’s Haidian district in 2008 that allows people to rent a plot of land to either farm or lease, and provides training in agricultural techniques and management. ↩
Editor’s Note: Farmer’s cooperatives in Taiwan, South Korea and Japan, are seen by Chinese advocates of rural cooperatives as potential models. ↩
Editor’s Note: Robert’s Rules of Order is the title of a book written by a U.S. Army colonel in the 19th century setting forth a set of rules that are now widely used to promote democratic debate and deliberation in associations, legislative bodies, and other groups. ↩
Editor’s Note: Yang Yunbiao’s cooperative is not alone is facing this demographic challenge. Many cooperatives operate in villages where many of the able-bodied men and women have left for work in the cities, leaving the children and elderly behind. ↩
Editor’s Note: Heifer International is an international NGO devoted to working with local communities to end poverty, and has localized its offices in China. ↩