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Profit-sharing yields bonus for farmers
By Tan Weiyun |
May 17, 2013, Friday
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Print Edition
Print Edition
SHEN Mingchong, 61, who lives in the Minyi Community in Xinqiao Town, received an annual bonus of 1,715 yuan (US$279) recently. He's one of more than 27,000 farmers in the town who are profiting from the businesses and investments that have sprung from collective rural assets.
All up, he and his neighbors shared 30.4 million yuan in bonuses last year, about half the total profit from community assets that were leased or invested.
"I have 98 shares that paid 17.5 yuan a share," Shen said. His wife has 71 shares and his two daughters a combined 108 shares. "For the farmers like us who have lost land, the bonus, though not much, is a kind of compensation and guarantee from the government."
Starting from scratch
Xinqiao was the first in Shanghai to organize a system that allowed residents with local hukou, or registered permanent residency, to get shares in the collective assets of their community.
"It's probably the most successful one in Shanghai now," said Sang Weiguo, director of the town's department of financial affairs management.
Bonus sharing has been implemented in the district's 14 towns since 2011 but Xinqiao was the first.
By the end of last year, nine district towns had such associations. Ninety villages had branches to protect farmers' interests and their rights to manage and supervise assets operation.
Since 2009, the district has implemented policies to clarify property rights and liquidate rural collective assets. Since 2004, small villages have been merged into communities, replacing collectives created in the late 1950s.
The assets of those collectives, such as land and factories, were purchased by the local government and are now being run like a business.
"The assets belong to our farmers, so the profit should be shared among our farmers," Sang said. "The problem was to determine who was qualified to share in the profit and how to make the allocations fair."
In 2009, the Xinqiao Joint Association of Rural Collective Assets was set up with an elected board and supervisory board.
"We had no blueprint to follow, no policy to govern our activities, so we just started from scratch," Sang said.
It took a year of complicated procedures to determine who was qualified for shares and how many each household was entitled to receive.
The number of members is fixed. Shares can be inherited but they cannot be transferred to others.
To organize the new body, Sang traveled to Beijing, learning about other towns that set up associations and sold shares to villagers.
"But I found many problems," Sang said. Some villages required association members to buy shares. "So what was to prevent a rich man from buying up most shares? That didn't seem to work in the interest of the entire village."
Xinqiao's farmers don't need to buy shares. Units were allocated according to the number of years people farmed since 1956 and the size of farms they worked, according to tax bills.
"If anyone led a production team or joined the army, we take that into consideration," said Xia Muquan, 66, a board member in Minyi Community.
Growing value
Over the past three years, the association has delivered 87.5 million yuan in bonuses earned from assets. The value of one share has risen from 16 yuan in the first year to 17.5 this year.
"It's not much, but if the government operates the assets well, the returns should grow in the future," Sang said.
Returns from land leasing and rental of factories and warehouses are on the upswing. As one investor in the Caohejing High-Tech Park, Xinqiao earns profit of 60 million yuan a year. "We're quite optimistic about the future and the bonus pool will grow," said Sang.
About half of the profit is shared among the villagers, and the other half is reinvested. "Only by rolling a bigger snowball can we increase the income of our farmers," Sang said.
All up, he and his neighbors shared 30.4 million yuan in bonuses last year, about half the total profit from community assets that were leased or invested.
"I have 98 shares that paid 17.5 yuan a share," Shen said. His wife has 71 shares and his two daughters a combined 108 shares. "For the farmers like us who have lost land, the bonus, though not much, is a kind of compensation and guarantee from the government."
Starting from scratch
Xinqiao was the first in Shanghai to organize a system that allowed residents with local hukou, or registered permanent residency, to get shares in the collective assets of their community.
"It's probably the most successful one in Shanghai now," said Sang Weiguo, director of the town's department of financial affairs management.
Bonus sharing has been implemented in the district's 14 towns since 2011 but Xinqiao was the first.
By the end of last year, nine district towns had such associations. Ninety villages had branches to protect farmers' interests and their rights to manage and supervise assets operation.
Since 2009, the district has implemented policies to clarify property rights and liquidate rural collective assets. Since 2004, small villages have been merged into communities, replacing collectives created in the late 1950s.
The assets of those collectives, such as land and factories, were purchased by the local government and are now being run like a business.
"The assets belong to our farmers, so the profit should be shared among our farmers," Sang said. "The problem was to determine who was qualified to share in the profit and how to make the allocations fair."
In 2009, the Xinqiao Joint Association of Rural Collective Assets was set up with an elected board and supervisory board.
"We had no blueprint to follow, no policy to govern our activities, so we just started from scratch," Sang said.
It took a year of complicated procedures to determine who was qualified for shares and how many each household was entitled to receive.
The number of members is fixed. Shares can be inherited but they cannot be transferred to others.
To organize the new body, Sang traveled to Beijing, learning about other towns that set up associations and sold shares to villagers.
"But I found many problems," Sang said. Some villages required association members to buy shares. "So what was to prevent a rich man from buying up most shares? That didn't seem to work in the interest of the entire village."
Xinqiao's farmers don't need to buy shares. Units were allocated according to the number of years people farmed since 1956 and the size of farms they worked, according to tax bills.
"If anyone led a production team or joined the army, we take that into consideration," said Xia Muquan, 66, a board member in Minyi Community.
Growing value
Over the past three years, the association has delivered 87.5 million yuan in bonuses earned from assets. The value of one share has risen from 16 yuan in the first year to 17.5 this year.
"It's not much, but if the government operates the assets well, the returns should grow in the future," Sang said.
Returns from land leasing and rental of factories and warehouses are on the upswing. As one investor in the Caohejing High-Tech Park, Xinqiao earns profit of 60 million yuan a year. "We're quite optimistic about the future and the bonus pool will grow," said Sang.
About half of the profit is shared among the villagers, and the other half is reinvested. "Only by rolling a bigger snowball can we increase the income of our farmers," Sang said.
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