For nearly a decade, MRLG’s national and regional alliances on Responsible Agricultural Investment (RAI) have aimed to uplift smallholder farmers while mitigating exclusionary impacts of export-oriented commodity agriculture. This vision recently fueled a dynamic learning exchange in Yunnan Province, China.
The Yunnan exchange, building on a prior delegation of Lao government stakeholders to Nanning, China in 2024, brought together over 50 technical experts and policymakers from Cambodia, Laos, Vietnam, and Myanmar to learn from China’s experience in creating a supportive environment for RAI. China’s approach, marked by farmer-friendly policies, public and private funding, infrastructure enhancement, and technical assistance, offers valuable lessons for countries in the Mekong region undergoing rapid agrarian transformations.
Key Takeaways and Insights
Secure Land Rights: Land tenure and transfer emerged as critical topics, forming the foundation for under-standing China’s agricultural models. China, which collectivized agricultural and forest land beginning in the 1980s, currently operates the “three rights separation” framework in which land is owned by the collective but individual use rights are transferred to households within the collective. These operational rights can be leased or subcontracted. This system is crucial for protecting smallholder interests and facilitating land transfers to maximize productivity, ensure smallholders receive a fair share of profits, and mitigate conflict. The exchange emphasized that transferring land rights in China essentially operates as a lease, with farmers retaining formal title unless the land is requisitioned by the state or collective. Land lease fees to farmers, paid either up-front via government support and/or as a share of the ensuing enterprise’s profit and serve as one of several income streams for farmers who also provide their own labour to cooperatives or otherwise secure non-farm economic activity.
- 3-3-4 Model: This model, used in the avocado industry, involves a platform company serving as the main investor, a leading enterprise providing technology and inputs, cooperatives managing daily operations and overseeing land use planning, and farmers contributing their land, labor, and often their use rights, which aims to balance the interests of different stakeholders. Within this framework, the village collective receives more than half the profit share, which is subsequently distributed to the village committee, cooperative, and farmers.
- 1+N+X+Z Model: Utilized in the floral industry, this model features a leading company, cooperatives, farmers, and other business entities. It facilitates large-scale flower cultivation by integrating smallholder farmers into the industry, allowing them to share in the profits and achieve economies of scale.
- Self-organized Cooperatives: In contrast to the company-driven models, these cooperatives are managed and operated primarily by villagers, handling tasks such as operation, brand management, and market access.
- Ecotourism Cooperatives: These models leverage a village’s natural and cultural resources to develop tourism, creating diverse income streams for villagers through self-operated businesses, management fees, and intangible assets while protecting the environment, exemplifying the potential monetary value of ecosystem services.
- Contract Farming: Many of the models observed in Yunnan fall under the umbrella term of “contract farming” as understood by Mekong stakeholders, underlining the need for clear rights and responsibilities of all parties to a contract.
- Policy Support: China’s success in agricultural development is attributed to supportive policies, including land reforms, financial incentives, infrastructure investment, and strict evaluation mechanisms. These policies aim to balance agricultural modernization with smallholder interests and environmental protection. Hearing directly from government stakeholders underscored these points: in Jining, now home to a booming floriculture sector, the government recalled their planned investment in the flower industry and the financial and technical assistance provided at multiple scales to realize this goal.
Challenges and Opportunities
While China’s context is unique, the exchange highlighted valuable lessons for the Mekong region. Participants recognized the need for clarity on land tenure, clear and equitable contracts, and policies and technical assistance that support smallholders’ access to resources and markets. A key takeaway is that the Chinese government sees clear value in supporting smallholder farmers as a pillar of rural development through decentralization of tenure from the State to collectives and households, providing monetary subsidies (often grants, rather than loans), and promoting innovative technologies through research universities. These supports are reinforcing; for example, in Laos, formalization of tenure can often unlock small-scale finance, but farmers without their rights recognized will struggle to obtain collateral recognized by lending institutions. The importance of adapting solutions to local contexts was a recurring theme, acknowledging the diverse conditions within the Mekong region.
MRLG’s Role and the Path Forward
MRLG plays a vital role in facilitating these exchanges, fostering dialogue and knowledge sharing between countries in the Mekong region and China. By connecting policymakers, technical experts, and other stakeholders, MRLG creates a platform for learning and collaboration that can drive positive change in agricultural investment practices. The Yunnan exchange underscored the power of collaboration and knowledge sharing in advancing responsible agricultural investment. As Mekong countries develop supportive legislation and policies, the insights gained from China offer a roadmap for creating more equitable, sustainable, and prosperous agricultural sectors. The continued efforts of MRLG and similar initiatives are essential for building a future where agricultural investments empower smallholder farmers and contribute to regional prosperity.
