<strong>China''s Tobacco Industry Strives to Develop Model Cooperatives</strong>

Source from:  TobaccoChina Online  06/08/2013

The tobacco industry of China is striving to develop model specialized cooperatives of tobacco growers in all major tobacco-growing zones across China, in efforts to meet the requirement of development of a modern tobacco agriculture in the country.

Along with steady development of a modern tobacco agriculture and year-on-year promotion of large-scale growing of high-quality leaf tobacco, all tobacco-growing zones in China, under unified guidance by the tobacco industry, havse actively innovated forms of organization of leaf tobacco production, earnestly launched pilot projects of establishing specialized cooperatives of tobacco growers, made clear the definition of functions and orientation of development of specialized cooperatives of tobacco growers, and explored models of establishment of specialized cooperatives of tobacco growers and ways of their operation, making remarkable achievements.

As a result of persistent efforts over the past few years, the tobacco industry has succeeded in establishing a number of model specialized cooperatives of tobacco growers in major tobacco-growing zones, including Hongyun Cooperative and Jinchun Cooperative in Hunan Province in south central China, Aoxi Cooperative and Pingba Cooperative in Guizhou Province in southwest China, Hongyun Cooperative and Ziwu Cooperative in Yunnan Province in southwest China, Huimin Cooperative in Nange Township of Sichuan Province in southwest China, Juye Cooperative in Fujian Province in southeast China and Wangying Cooperative in Hubei Province in central China. These are all model specialized tobacco cooperatives with a well-established structure of governance, with well regulated operational management, with scientific price-fixing mechanisms, with rational systems of distribution of gains, with active participation by local tobacco growers and with high-quality service provision.

DEVELOPMENT OF MODELS AND FULL-SCALE PROMOTION

In 2013, the Central Committee of the ruling Communist Party of China issued an official document on the development of agriculture, known as Official Document No. 1 of 2013, which urges innovation of systems of management of agricultural production and steady increase of the extent of organization of farmers. In efforts to implement this official document, innovate systems of management of agricultural production, develop new types of agricultural production operators, increase the extent of organization of tobacco growers, and accelerate the process of promoting the establishment of specialized cooperatives of tobacco growers, the State Tobacco Monopoly Administration (STMA) – the regulator of China's tobacco industry – issued on March 19 a notice to launch a campaign to establish model comprehensive service-oriented specialized cooperatives of tobacco growers by the whole tobacco industry in 2013.

On the basis of careful selection and submission of candidates by all tobacco-growing zones in China, the STMA, after review, has designated a total of 91 specialized cooperatives of tobacco growers, including Chengchuan Cooperative in Xiangyun County of Yunnan Province, Jiangbei Cooperative in Yuqing County of Guizhou Province, Huimin Cooperative in Nange Township of Sichuan Province, Jinchun Cooperative in Ningxiang County of Hubei Province and Liangyou Cooperative in Jukou Township of Jianyang City in Fujian Province, as model cooperatives for the year 2013.

The development of model cooperatives by the tobacco industry in 2013 will closely follow the requirement of the Law of the People's Republic of China on Specialized Cooperatives of Farmers and the Guiding Opinions of the State Tobacco Monopoly Administration on Accelerating the Process of Promoting the Development of Comprehensive Service-Oriented Specialized Cooperatives of Tobacco Growers, and will be intended to have the model cooperatives play demonstrative roles in terms of development models, systems, mechanisms, business expansion, innovation and efficiency. The STMA hopes that by setting up a number of model cooperatives and through the development of leading model cooperatives, all tobacco-growing zones will be able to form models for the establishment of specialized cooperatives of tobacco growers that can be followed and generalized.

According to the STMA, the development of specialized cooperatives of tobacco growers will follow the principle of "each exclusive high-quality leaf tobacco production and supply base having one specialized cooperative of tobacco growers", and efforts will be made to make tobacco growers more willing to join cooperatives, in order that 80 percent or more of the tobacco growers will join cooperatives. Steps will be taken to scientifically establish specialized service taskforces; improve service networks; give priority to doing a good job of specialized service at such key processes as tobacco seedlings development, tractor plowing, crop protection, leaf tobacco curing and leaf tobacco grading; and actively explore ways of improving specialized service at such processes as tobacco seedlings transplantation, fertilization, leaf tobacco picking and transportation. Efforts will be made to strengthen support for the development of cooperatives, strictly implement policies of the tobacco industry on subsidies, regulate the forms of and standards for subsidies, win more favorable policies and funds through multiple channels and by multiple means, and keep innovating mechanisms for improving support and guarantee policies. Besides, under the premise of focusing energy on tobacco production, efforts will be made to do a good job of managing and maintaining facilities of model cooperatives, generalizing applicable technologies, and improve the functions of material supply, information support, etc, in order to strengthen the "hematopoietic function" of the tobacco industry and its internal driving force.

To improve the quality of the work of the tobacco industry to establish model cooperatives and promote the development of model cooperatives to higher levels, the STMA, in accordance with the standards for the existence of complete regulations and rules, well-established governance structures, energetic management teams, support service systems, strict internal control systems and high economic efficiency, issue a set of Measures for Grading and Assessing Model Specialized Cooperatives of Tobacco Growers by the Tobacco Industry. Therefore, all tobacco-growing zones across China are required to formulate their own specific rules for grading and assessment, quantize their indexes for specific grading and assessment and realize strict grading and assessment level by level, in accordance with the Measures for Grading and Assessing Model Specialized Cooperatives of Tobacco Growers by the Tobacco Industry to the issued by the STMA.

REDUCTION OF COSTS, IMPROVEMENT OF EFFICIENCY

Presently, the comprehensive service-oriented specialized cooperatives of tobacco growers already established are actively extending specialized service at such processes as tobacco seedlings transplantation, fertilization, leaf tobacco picking, harvest and transportation, on the basis of improving and promoting specialized service at the five basic processes of tobacco seedlings development, tractor plowing, crop protection, leaf tobacco curing and leaf tobacco grading, to gradually form whole-process service provision at all crucial processes of tobacco production.

The development of whole-process service has so far realistically contributed to promoting realization of the targets of "reducing manpower and costs and improving efficiency." According to members of Wangying Cooperative in Enshi Prefecture of Hubei Province, Wangying Cooperative, by means of unified organization and unified service provision, has succeeded in generalizing intensive farming and mechanized operation in tobacco growing. As a result, the specialized tobacco-growing farm households with the cooperative have seen their annual per capita manpower use decline by 13.67 days per mu (per 0.067 hectare) per household on the average. Likewise, the family-run tobacco-growing farms with the cooperative have seen their annual per capita manpower use decline by 15.62 days per mu (per 0.067 hectare) per household on the average. Computed by local wage standard of 80 yuan (13 U.S. dollars) per person per day, and with the deduction of spending in purchasing specialized service provided by the cooperative, the specialized tobacco-growing farm households (each having an average of 15 mu or one hectare of tobacco-growing fields) with the cooperative have realized an average reduction of 694 yuan (110 U.S. dollars) per mu (per 0.067 hectare) per year for manpower use while the family-run tobacco-growing farms (each having over 50 mu or 3.3 hectares of tobacco-growing fields) with the cooperative have realized an average reduction of 850 yuan (135 U.S. dollars) per mu (per 0.067 hectare) per year for manpower use.

According to official statistics, the annual per capita manpower use by units of exclusive high-quality leaf tobacco production and supply bases covered by specialized cooperatives of tobacco growers already established nationwide reached an average of 24.8 days per mu (per 0.067 hectare) in 2011, 10 days fewer than traditional leaf tobacco production operators. In the year, the indirect income growth for tobacco growers reached 300 yuan (48 U.S. dollars) or higher as a result. For some units of exclusive high-quality leaf tobacco production and supply bases with relatively well-established cooperatives, their annual per capita manpower use in the year declined to some 20 days or even lower.

Speaking to reporters, Teng Zhao, deputy chief of the Specialized Tobacco Seedlings Development Squad of Boyang Cooperative in Hubei Province, said: "My father worked as a tobacco grower for more than a dozen years. Previously, he used to develop tobacco seedlings by himself. In January each year, he would have to get up early and work until nightfall busy growing tobacco. Now, with unified tobacco seedlings development and tractor plowing provided by the cooperative, he has less work to do and spends a little money doing the same work. The operation of the cooperation has truly realized reduction of manpower and costs."

So far, there have been nationwide 1,506 comprehensive service-oriented specialized cooperatives of tobacco growers assuming the functions of production service, facilities management and maintenance, technology generalization, distribution of material supplies, information service, etc, with 410,500 farm households as their members. According to the relevant planning of the tobacco industry, there have been nationwide by the year 2015 more than 800 comprehensive service-oriented specialized cooperatives of tobacco growers with complete systems of regulations and rules, with a well-established governance structure, with highly capable management teams, with support service systems, with strict internal control and with high economic efficiency, which will realistically cover all tobacco growers in the country.

"HEMATOPOIESIS" MORE IMPORTANT THAN "BLOOD TRANSFUSION"

For sustainable development of comprehensive service-oriented specialized cooperatives of tobacco growers, mere "blood transfusion" by the tobacco industry would not have been enough. Therefore, many other measures have been adopted to strengthen the function of "hematopoiesis" of the cooperatives.

Since 2005, the tobacco industry has invested more than 50 billion yuan (8 billion U.S. dollars) in the construction of infrastructure facilities for tobacco production, including tractor paths in tobacco fields, irrigation systems, leaf tobacco curing barns and machinery works, and in forming large-scale profit-making assets including tobacco seedlings development mills, leaf tobacco curing mills and farm machinery and equipment works. After the establishment of specialized cooperatives of tobacco growers, the rights to use such assets and to gain proceeds from them have been transferred to cooperatives in entirety, creating conditions for the cooperatives to actively launch business diversity, raise the rate of comprehensive utilization of facilities, increase their accumulation, enhance their internal development capacity and extend channels for increasing income, on the premise of focusing their energy on the main business of tobacco production.

Over recent years, market demand for the supply of fruits and flowers grown in Yunnan Province – the largest tobacco-producing region in China – has kept going up year-on-year. In response, the local specialized cooperatives of tobacco growers have managed to seize all favorable opportunities to launch business diversity besides tobacco production. For example, cooperatives in Yao'an, Mouding and other counties have actively organized tobacco growers to make a use of infrastructure facilities for tobacco production for growing pyrethrum, erigeron breviscapus and other crops with strong local characteristics, and to develop such characteristic businesses as fermented bean curd production and pig raising. As the growing of cash crops requires a relatively short period of time, involves a low intensity of labor and applies technologies that can be easily mastered, tobacco growers can make a use of ready manpower and material resources to proceed with growing other cash crops on the basis of fulfilling their assignments for tobacco growing. In 2011, the members of some cooperatives in Yao'an, Mouding and other counties saw their annual per capita income go up by more than 2,000 yuan (318 U.S. dollars) as a result of engaging in business diversity.

Typically, Huimin Cooperative in Nange Township of Sichuan Province has been quite successful in developing business diversity by having its members subcontract for cash crop growing or leasing assets to its members for growing cash crops. It leases tobacco seedlings development greenhouses to its members for growing seasonal vegetable at a rate of 500 yuan (80 U.S. dollars) per unit per year, leases leaf tobacco curing barns to its members for growing fungus at a rate of 100 yuan (16 U.S. dollars) per unit per year, and leases farm machinery to its members for growing cash crops at a rate of 50 yuan to 2,000 yuan (8 U.S. dollars to 320 U.S. dollars) per set per year. In addition, the cooperative makes a good use of surplus farmland by operating family farms or launching joint-venture businesses of growing ecological crops with urban residents.

For specialized cooperatives of tobacco growers in Guizhou Province – the second largest tobacco-growing region in China, they operate what they call "sideline business" within themselves, in which members of the cooperatives would join service teams after finishing their own farming. Some members of the cooperatives who grow small plots of tobacco, in the capacity of specialized cooperative members, would provide service for "professional growers" who grow large plots of tobacco and who are in need of service in large quantities. As a result, there has formed within the cooperatives a system of coordinated labor supply and market demand, which not only provides "professional growers" with stable sources of labor, but also enables farmers growing small plots of tobacco to earn extra income. Meanwhile, the cooperatives do not have to spend energy hiring people from outside. Therefore, the establishment of specialized cooperatives of tobacco growers in Guizhou Province well serves three purposes.

A member of Golden Farming Specialized Cooperative of Tobacco Growers in Suiyang County of Guizhou Province told reporters that besides the distribution of bonuses at the end of the year, what he favors is the pattern of democratic organization and management of the cooperatives, and the sense of pride from reaping gains by means of the modern way of thinking and management systems that "only urban people have". Enditem