©IFAD/Susan Beccio
Investing in
rural people
in China
Rural poverty in China
China is the fourth largest country in the world and home to more
than 1.3 billion people. It is an immense expanse that includes
vast seacoasts, fertile plains and valleys, rugged mountains and
windswept deserts.
Since the start of far-reaching economic reforms in the late 1970s, China has
witnessed unparalleled economic growth that has fuelled a remarkable increase in
per capita income and a decline in poverty. The economy, which has since become
the second largest in the world, has performed well in recent years, even against the
backdrop of the worldwide financial crisis and soaring food prices.
China is the first developing country to achieve the United Nations Millennium
Development Goal of reducing by half the number of its people living in extreme
poverty and hunger. Its reform-driven economic growth, together with a well-funded
national poverty reduction programme, has brought about a major reduction in
rural poverty.
But despite its remarkable progress in economic and social development and poverty
reduction, China still faces many challenges to reduce residual poverty. Disparities in
income among provinces and between urban and rural areas have been widening.
Urban incomes are now more than three times higher than rural incomes, and poverty
remains primarily a rural phenomenon.
About 50 per cent of the population resides in rural areas, where about two thirds of
the population is engaged in farming, forestry, animal husbandry and fishing. As of
2013, 50 per cent of total employment in China is in rural areas. The poorest rural
households tend to derive a large share of their income from agricultural activities,
which often show low levels of productivity and net profits.
The most vulnerable groups in rural parts of China are women, children and the
elderly, as well as ethnic minorities who live in remote mountainous areas. The
increasing migration of rural male labourers to urban and eastern coastal areas has
sharply extended the feminization of rural labour and agriculture.
Economic growth has been more rapid in the eastern provinces than in the west. About
51 per cent of China’s poor people live in the 12 provinces and autonomous regions in
the west. These areas are mostly situated in the central and western parts of the country,
where the poverty incidence in 2013 was 11 per cent, compared with the national
average of 6 per cent.
50 per cent
of employment
in China is in
rural areas
The main causes and characteristics of rural poverty vary in the different provinces
and autonomous regions. In general, they include:
• I ncreasingly frequent natural calamities, especially floods and droughts, caused by
extreme weather conditions that are associated with climate change
• R
emote locations with poor infrastructure and services, such as paved roads, markets
and safe drinking water
• Depleted natural resources and decreasing farm sizes
• L
ack of skills and capacity, and a disproportionate incidence of illiteracy and poor
skills among women
• Limited access to inputs, financial services, markets and value chains
©IFAD/Susan Beccio
• Reliance on traditional farming techniques.
Eradicating rural poverty in China
China’s government is increasing its investment in rural areas, especially in
infrastructure, irrigation, education and health. It is also introducing supportive
policies, including agricultural tax exemptions; subsidies for agricultural production
and increased agricultural procurement prices; and expansion of social protection and
social security coverage. Such investments aim to create a balanced, prosperous society
through economic and social development.
The government’s 12th Five-Year Plan was approved in March 2011. It calls for
harmonized growth to allow poor communities to benefit substantially from the
country’s impressive economic and social development. The government has pledged
to increase investment in support of economic development in poor rural areas.
However, China still faces an uphill task in reducing poverty. The government’s current
ten-year (2011-2020) rural poverty reduction and development programme recognizes
rural poverty as a long-term challenge – especially in border regions, areas inhabited
by ethnic minority groups, and former revolutionary bases that were settled from
the 1920s through the 1940s in remote, mountainous locations. The government
is committed to formulating and implementing strategic policies and efficient
mechanisms that will help achieve its objectives of eliminating absolute poverty and
substantially reducing relative poverty by 2020.
©IFAD/Qilai Shen
Government policy in China stresses the principle of development-driven poverty
reduction. This approach combines social assistance with sectoral development,
optimizing the roles and functions of central and local governments, extending
support to vulnerable groups previously designated as “low-income” rather than
“poor”, and continuing to fund poverty-reduction initiatives.
Focus areas for rural development include:
• Strengthening the capacity of poor people and improving their asset base
• Improving community-level infrastructure, facilities and services
• Ensuring that rural per capita net incomes grow faster than the national average
• Further extending and improving the social safety net for poor rural people
• Gradually improving the health and living standards of the poor in general.
IFAD’s strategy in China
Projects: 29
Total cost: US$2.1 billion
Total approved IFAD financing:
US$862.4 million
Directly benefiting:
4,393,300 households
In 1981, IFAD became one of the first international donors to finance operations in
China. IFAD is the only one of China’s development partners dedicated exclusively to
reducing poverty and increasing food and nutrition security in rural areas.
Most IFAD-funded programmes and projects in China operate in remote and
mountainous regions, where there are large numbers of poor indigenous people.
These initiatives usually include a focus on rural women, because they are largely
responsible for farm production and household tasks. IFAD has supported activities
such as land improvement, irrigation and water conservation, as well as increased
production of food, cash crops, livestock and fish.
The three main objectives of IFAD’s 2011-2015 results-based country strategic
opportunities programme in China, endorsed by the IFAD Executive Board in
September 2011, are to:
• E
nable poor rural people to use natural resources effectively and sustainably,
and introduce improved technology and advisory services adapted to changing
environmental and market conditions
• E
nsure that poor rural people and their organizations can take advantage of
improved market access and financial services to earn higher incomes and gain
greater resilience to risks
©IFAD/Susan Beccio
• E
nhance South-South cooperation and knowledge management, providing
opportunities for sharing knowledge generated through innovation and for scaling
up good practices in rural development.
4
Ongoing operations
Shiyan Smallholder Agribusiness Development Project
This project’s goal is to sustainably reduce poverty and improve livelihoods for small
farmers involved in agricultural value chains in the target areas. Its specific objectives
are to empower the rural poor to participate in commercial farming and to increase
farm family incomes while decreasing income variability.
Total cost: US$116.9 million
Approved IFAD loan: US$43.8 million
Duration: 2014-2019
Directly benefiting: 110,400 households
Project components include:
• S trengthening value chains to improve value-addition and access to markets
and rural financial services for smallholders, to be achieved through institutional
development and capacity-building for cooperatives, support for public-private
partnerships and establishment of a guarantee facility for pro-poor value
chain financing
• E
nhancing commercial farming to raise smallholder incomes through householdlevel commercial production of high-value crops and livestock; this will require
a shift from subsistence farming to market-oriented agricultural production.
The project’s support to commercial crop production will include provision of seeds,
seedlings and fertilizers. The production of commercial crops will provide additional
income for farmers through increased yields and productivity, and higher prices.
Improved market access will be achieved through cooperative marketing. Production
activities will also be tied to infrastructure improvement.
In line with IFAD’s targeting strategy and the government’s poverty reduction
priorities, small farmers with economic potential in five counties of Shiyan Prefecture
and three districts of Shiyan city have been selected to implement the project.
Yunnan Agricultural and Rural Improvement Project
The objective of this project is to improve livelihoods and income-generating
opportunities for poor and vulnerable groups through an integrated approach to
development. The project is in line with the government’s Five-Year Plan for
2011-2015, which calls for harmonized growth enabling poor populations to
benefit from China’s overall economic and social development.
Total cost: US$94.0 million
Approved IFAD loan: US$46.7 million
Cofinancing: Government
(US$47.3 million)
Duration: 2013-2018
Directly benefiting: 194,100 households
The project area comprises 45 townships in nine counties of Yunnan Province.
Project activities will give special priority to ethnic minorities and women, and
to poor households whose members are economically active.
5
©IFAD/Susan Beccio
Components of the project include:
• C
ommunity infrastructure improvements, such as the rehabilitation and
development of village roads and water supply systems
• P
roductivity improvements in the form of enhanced crop, livestock and
fishery production; expanded agricultural and livestock extension services;
and other support
• I mprovements in value chains and market access, for example by upgrading roads
and identifying, producing and marketing selected cash crops and
livestock products.
This last component will also involve market studies and the formation of farmers’
and producers’ groups and cooperatives – as well as local training and capacitybuilding, and development of market information services.
Hunan Agricultural and Rural Infrastructure
Improvement Project
6
In line with IFAD’s 2011-2015 country strategic opportunities programme for China –
as well as the government’s Five-Year Plan and 2011-2020 rural poverty reduction and
development programme – the objective of this project is to increase incomes
and improve food security for 182,000 rural households in Hunan Province. To
that end, the project aims to improve rural community infrastructure and support
sustainable agricultural development and marketing.
Total cost: US$93.2 million
The project is being implemented in nine Hunan counties that comprise the
poorest, least fertile, least accessible and least developed areas of the province. Nearly
600 target villages with the province’s highest incidence of poverty have
been identified as prime recipients of project support.
Directly benefiting: 182,000 households
Approved IFAD loan: US$46.0 million
Approved IFAD grant: US$1.0 million
Cofinancing: Government
(US$45.6 million); beneficiaries
(US$0.6 million)
Duration: 2012-2017
IFAD-supported activities will:
• Provide the rural poor with productive assets and community facilities
• Develop commercial agriculture through improved value chains and market access
• Support farmers’ cooperatives.
Guangxi Integrated Agricultural Development Project
The overall goal of this project is to promote rural development and poverty
reduction by scaling up innovative approaches in the target area. Its specific
objective is to increase the revenues of rural women and men through improved
agricultural production.
The project’s four components include community infrastructure development,
agricultural production and marketing support, and improvement of the rural
environment. More than half of those who will directly benefit from the project
live in poor and vulnerable households, and more than half are women. Among
the project’s anticipated benefits are increased revenue and food security from the
incremental production of about 157,000 metric tons of food grains, fruits and
vegetables, root crops, sugar cane and tea. The project will demonstrate and scale up
niche and cash crops and livestock production, increase access to information and
markets, improve conditions for technical training and extension, and enhance
Total cost: US$70.8 million
Approved IFAD loan: US$31.9 million
Cofinancing: Government
(US$39.0 million)
Duration: 2009-2015
Directly benefiting: 77,000 households
the effectiveness of technical services. Rural women and ethnic minorities in the
project area will be empowered economically and socially.
Jiangxi Mountainous Areas Agribusiness Promotion
Project (JiMAAPP)
This project aims to increase farmers’ production bases and improve the efficiency of
agricultural production. It will also enhance product quality and improve margins
along value chains, especially at the farm level.
JiMAAPP will have three components: agribusiness promotion and development;
farm production expansion and productivity enhancement; and project management
and coordination. It will target poor rural people, especially women.
Total cost: US$125.2 million
Approved IFAD loan: US$43.8 million
Approved IFAD grant: US$0.8 million
Duration: 2014-2019
Directly benefiting: 194,000 households
Qinghai Liupan Mountain Area Poverty Reduction Project
(LMAPRP)
The overall goal of the LMAPRP is to contribute to achieving sustainable and
equitable poverty reduction while improving the livelihoods of rural households
in Qinghai Province. The project’s development objective is to sustainably increase
the income of poor and vulnerable rural households residing in the following
seven counties in the Liupan mountain area situated in the eastern part of Qinghai
Province: Huangzhong, Huangyuan, Minhe, Ledu, Huzhu, Hualong and Xunhua.
Total cost: US$125.3 million
Approved IFAD loan: US$43.5 million
IFAD grant: US$1.0 million
Duration: 2015-2020
Directly benefiting: 128,000 households
The project will achieve its development objectives by:
• E
nhancing agriculture and livestock productivity, focusing on high-value/
locally-featured products
• I ncreasing opportunities for farmers to access markets by linking them to improved
cooperatives and enterprises
• S trengthening vulnerable groups’ capacity to engage in off-farm income-generating
activities
• P
roviding better ecosystem services through sustainable land resources
management.
7
The IFAD-funded project will benefit approximately 128,000 poor and
vulnerable rural households living in 683 poor villages, among which are
ethnic minorities accounting for about 31 per cent of the total population in
the province and 47 per cent of the total population in the project area.
IFAD invests in rural people,
empowering them to reduce
poverty, increase food security,
improve nutrition and
strengthen resilience. Since
1978, we have provided
US$17.7 billion in grants and
low-interest loans to projects
that have reached about
459 million people. IFAD is
an international financial
institution and a specialized
United Nations agency based
in Rome – the UN’s food and
agriculture hub.
Contact:
Matteo Marchisio
Country Programme Manager
IFAD
Via Paolo di Dono, 44
Rome, Italy
Tel: +39 06 5459 2862
Fax: +39 06 5459 3862
E-mail: [email protected]
For further information on rural poverty in
the People’s Republic of China,
visit the Rural Poverty Portal
http://www.ruralpovertyportal.org.
©IFAD/Susan Beccio
International Fund for Agricultural Development
Via Paolo di Dono, 44 - 00142 Rome, Italy
Tel: +39 06 54591 - Fax: +39 06 5043463
E-mail: [email protected]
www.ifad.org
www.ruralpovertyportal.org
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May 2016