Interpretation of Key Points on the Rural Land System and Farmer Protection

On January 16-17, 2015, the Fifth National Forum on Farmers' Cooperative Organizations was held at the National Agricultural Exhibition Center. This forum was hosted by the Institute of Advanced Studies in Sustainable Development of Renmin University of China, the China Rural Civilization Research Center of the Public Economy Research Association, the Rural Reconstruction Center of Renmin University of China, the China Rural Reconstruction Institute of Southwest University, and the Straits Rural Reconstruction Institute of Fujian Agriculture and Forestry University, and organized by the Beijing Liang Shuming Rural Reconstruction Center and the Guoren Green Alliance.

The following is a transcript of Professor Wen Tiejun's speech:

Thank you everyone. Let me first say a few words related to what Professor Zhang just reported to everyone. Consider it a report on some study insights. Professor Zhang is a few years older than me, and in the fields of agricultural policy and rural development, especially in cooperative research, he started much earlier than I did, and in terms of the level and depth of his research, and even his contributions to the country, he is far stronger than I am. So when Professor Zhang has several times said he follows me, it makes me uneasy. When someone of elder-brother generation says this, I can only express a few study insights related to his report. So before entering my topic, let me first introduce my understanding of developing cooperatives to everyone. It is better to use the story-telling approach. Because when it comes to theory, I feel I cannot speak theory in front of a theory master like Professor Zhang Xiaoshan, so I will talk about three kinds of cooperatives among contemporary cooperatives that should be said to have history. These three kinds of cooperatives each have their own background. Just now Professor Zhang mentioned Spain's Mondragon government and mentioned how that priest back then used his conscience to promote cooperative culture. I will explain this story a bit more so everyone can hear it more completely. In fact, in the early years when the great tide of industrialization rose, after this tide passed, it destroyed the lives of many rural land common people like a crushing force. Because industry requires people to be labor power, and the surplus of your labor that you contribute is appropriated by capital. This is the mainstream. How did this cooperative rise back then? In fact, it was because this priest took in a few so-called problem juveniles, or problem youths, who in the great tide of industrialization could not be used as normal labor power. Among them, five people, led by this priest, went to learn skills. Some knew how to do this, some knew how to do that. In short, why is Mondragon mainly an industrial cooperative? Its early founders, these five problem juveniles and problem youths, were reformed by the priest and cultivated their own skills. They said they could not just make a living for themselves. At most I become labor power in the great tide of industry. I contribute my surplus labor, and I am still controlled by industrial labor. So under spiritual inspiration, these five people formed a cooperative culture. They said the five of us cooperate together, we create an organization, and this organization is the origin of the earliest Mondragon cooperative. They all had their own skills, and they organized their respective abilities together and formed a kind of public ownership, in which the property we created was owned in common by everyone. That was later why all Mondragon property was commonly owned by everyone. And the next rule was that when you join Mondragon as a member, your first-year wages must be contributed and become your property. Based on your first year's labor, the contribution you make, part of your wages becomes your equity share. Therefore it became a so-called industrial cooperative enterprise in which all members held shares. With further development, as the industry itself developed, what did it become? It became something that included primary, secondary, and tertiary industries. Why is it called comprehensive? Why does Professor Zhang now call in policy circles for developing specialized cooperatives into comprehensive cooperatives? Farmer brothers say that after doing cooperatives for ten years they are still miserable and poor, and no one makes money. May I ask which enterprise makes money? Even if it has very strong capital power, can it make money? About others I dare not say, but I myself now serve as an independent director at the largest financial enterprise, the Agricultural Bank of China, and I also serve as a director at China's largest agricultural enterprise, the New Hope Group. New Hope is almost zero in the agricultural field. If you do not finally combine primary, secondary, and tertiary industries together, and you tell him to do a cooperative, are you not fooling him? You tell him to do agriculture, is that not fooling him? So why do we need to do primary, secondary, and tertiary industries? Not long ago I said to a cooperative backbone, if you have the ability, go directly into new fields, do high technology, register a high-tech company. That is much better than being miserable in the primary industry. Why? Because that leads. Why do I advocate what Professor Zhang proposed in the last few slides, that central documents clearly state that mature farmers' cooperatives can do mutual finance? Why? Finance is the tertiary industry. I just said information needs six harmonies, and investment can make money. Otherwise profit is close to zero. Go and seriously investigate many enterprises that have entered agriculture. Quite a lot of them want to convert into cooperatives because only by converting into cooperatives can they get government preferential treatment. Without government preferential treatment, their operations in the agricultural sector are losing money.

Why is so much stuff now falsified? If they do not make their actual situation, which may be a few percent or a little over ten percent, why create one hundred percent? If they do not create more, can they get subsidies? Moreover, governments at all levels all tell you to grow cash crops. The more cash crops there are, the more serious the surplus becomes. Now Chinese cabbage is all over the streets. You see milk being dumped into the fields. Is that not also happening? In the past capitalism had overproduction. Now do you not also have overproduction? Under the situation of comprehensive surplus in the entire so-called cash crop field, how do you guarantee farmers' interests? How do you return benefits? Why did I first use the story of Mondragon? Mondragon developed secondary industry in the great tide of industrialization. It directly deeply processed primary industry, agriculture, planting, and breeding into secondary industry. I have visited Mondragon enterprises. All primary industry enterprises cannot make money. They make money in secondary industry. It became cooperation across the entire industrial chain, and it became finance, insurance, supermarkets, even catering, even tourism, restaurants. All went in, and it became a cooperative enterprise with a complete industrial system. So the emergence of Mondragon certainly also had cooperative culture. The priest's moving spirit drove several problem juveniles, and after training they accepted the culture, helping themselves and helping others, forming the prototype of early Mondragon. But did these economic and cultural factors alone let them develop? There is also something that some studies do not mention. I do not know why. What? Where did Mondragon develop? In the Basque region of Spain. The Basque armed police, like our police, are state police, while local police, police stations, are local. What role do the armed police play? Preventing Basque separatism. Note that Spain in fact has always had many conflicts, armed conflicts. Therefore this area inherently has a kind of cohesion: we are Basques. So there was an important background of conflict culture, and it became the largest enterprise in the entire Basque region. Because the Basque region could not be recognized by Spain, it pursued separatism, so the government gave it preferential treatment, and so the Basque region became the fourth largest enterprise. So this must be given some kind of economic tilt, otherwise it would make trouble. This is the political background. So in our study of social culture, this has been ignored.

The other is Israel's cooperatives. Who ran Israel's cooperatives? Israel and Israelis had to survive in the entire Arab region, so they necessarily had to practice a political culture of holding a hoe in one hand and a gun in the other. It itself had a political and cultural background. So it is related to the development of Israel's communes. Back then the director of the Israeli settlement center came over, and I was then in the central rural work area. At that time I was given a task, and he also said how it came and went, and we also poured out everything like beans from a bamboo tube, how it came and went. He said we support this project with 4 billion US dollars every year. How are cooperatives formed? Can it really rely only on us farmers ourselves having cooperative culture, relying on our own historical and cultural inheritance, relying on ourselves to form a backbone, and working miserably? Look at those cooperatives that are still famous in the world today. Without Basque government support, and without a cooperative across the entire industrial chain, how could it succeed? Israel, 70% or 80%, originally at the founding of the state, the collective economy was over 80%. If it were not for individual farmers fighting for territory on this land, and if you did not hold a hoe in one hand and a gun in the other, how could it be formed?

Let us look at Japan and South Korea, and China's Taiwan, all originating from Japan. Japan's comprehensive agricultural association enterprise is now considered a category of agricultural cooperative with a heritage of more than one hundred years. How did it arise? You should know that it was after Japan began building the nation through industry and, supported by domestic strength, became a military power. It wanted to attack the Korean Peninsula, attack Northeast China, and then wage holy war into Siberia. Where did their strength as a nation come from? Their foundation was in the countryside. Which rural soldier was willing to go to the front? Could this approach work in Japan? It had to stabilize the countryside. How to stabilize it? Only by organizing farmers could it be stabilized. So note that in 1894 China lost the naval battle and paid Japan 300 million US dollars in indemnity. Part of it Japan used to strengthen armaments. Then it defeated the Soviet Union. They said we are now the only one relying on our own strength to defeat a white nation. We are the only colored people who have defeated whites. They carried this around. We make no evaluation of him, we do not say whether he was right or wrong, but we say that with China's 300 million silver dollars he committed aggression and used Chinese public funds obtained through war to build Nippon Steel, and so on and so forth. These six major Japanese zaibatsu were built back then with Chinese military funds. Another kind of power was to establish shrines in the countryside. You know that in Japanese villages and urban neighborhoods, what you see everywhere are shrines, and at the same time they supported cooperatives organized by farmers. In 1894, and the 1895 Treaty of Shimonoseki with China's indemnity, and in 1897 rural measures began. On the whole he knew that to be a strong nation it would not do to be on a small island. He had to fight close to Northeast China, and toward Korea, and then enter Manchuria and Mongolia. So do you say Japan was just an economic organization? Was it just relying on agricultural cooperativization? Why 80%, 90%, the entire comprehensive agricultural association? Therefore, because it was a strategic arrangement for the nation to become strong, it continuously received quite substantial government preferential treatment. Do you know what this preferential treatment was? Why did Japan's comprehensive agricultural cooperative succeed? Because Japan's agricultural cooperative was the only monopoly enterprise in the entire rural field, and other enterprises were not allowed to enter this field. Japan only broke this idea in 2011. At the beginning of the twentieth century, enterprises were prohibited from entering to compete. Every enterprise could do agriculture and do zaibatsu business, but among the zaibatsu it was very strict. Do not think that because you are a returnee you can directly skip being a division chief. First follow along carrying the bag and properly serve your leader. So Japan had no competitiveness, but it had unprecedented stability. Politicians wanting to take office discussed with them, and delivered a great financial group to the village, namely the comprehensive agricultural cooperative. It controlled all economic fields, from finance, insurance, to land transactions, to supermarkets, to restaurants, real estate. All these fields that could earn income all formed distribution to farmers. So why is Japan's per capita income higher than the city's? Did it come from agriculture? From miserably farming the land? No, it came from finance, from insurance, processing, supermarkets, and so on and so forth. Only when these profits were returned to farmers could farmers have income. We have intentionally or unintentionally ignored all these backgrounds and histories, and then people say farmers, enter the free market, compete. I have monopolized the fields and will not give them to you. How can this possibly succeed? Everyone says fake cooperatives are now in fashion. Why? We cannot blame the government entirely. Up to now this fiscal system persists in not being reformed, and local finances get worse level by level. Local departments, especially those managing the medical industry and farmer-related departments, unlike localities, can get a share. Everyone is an official in the same court. If you manage finance, if you manage real estate, if you deal in stocks, then you get a full share. What about those of us doing agriculture? We have no choice but to use any interest to grab money and distribute it. I myself have experienced this. Everyone present has helped farmers develop. I will not name places. At that time there were not yet cooperatives. I did it in 2004, or 2005. I said we would do ten cooperative pilot projects and reported to the relevant departments, even directly finding the minister, saying please, in the current state support funds, can some targeted money be given? Let these comparatively standardized funds develop well. The minister was very straightforward, but lower down it became troublesome. They said have you gone through evaluation? We need to organize experts for evaluation, and then it becomes troublesome. You will not pass the evaluation. Why? To be honest, those who evaluate all have capital, and of course none are farmers. In the end we managed to get two. The first one said it would give. The farmer called and said the county said the higher level is coming to evaluate. Is it you who receives them or me? If I receive them, when the money comes we split it half and half. The other was even more interesting. The county said you first send me four thousand yuan. Why send it? They said we are going to the province to chase the project. Who pays for the eating and drinking? Can you guarantee to win it? If you cannot guarantee to win it, then you first advance the money yourselves. Why am I now doing cooperatives more and more slowly and less? You will understand once you do many things. They block you. In the end what to do? I said I would sell my old face once more, and I directly called the department head of the provincial department. The department head said handle it directly. When this money reaches our provincial department, it will not go down. Do not let the lower levels interfere. If the lower levels interfere, half is split at the door. It is not just plucking a hair from the eaves. Everyone. Why are fiscal funds now often occupied by a small number of people? Why is it like this? How do you say farmers' rights and interests are reflected? Many people say what we are doing is not a cooperative but a farmers' organization. I say if farmers do not organize, what then? You can only go out. Can you say you can make trouble? No. We are law-abiding citizens. If by any chance we are regarded as petitioners, then if you want to get some preferential policy, there is no way. He will treat you as an enemy. We all know this too. So at the beginning we transformed those petitioners into cooperatives. But many of our control systems do not recognize this. Even if I say I will not petition anymore, I will change into a cooperative, is that okay? No. You have already become alternative. If the relevant departments do not push you to be even more alternative, they count it as failing to complete the task. Why can we not make society a bit more harmonious? Originally it was caused by social burdens. You say you changed, you abolished the agricultural tax, but what about the past? No one settles the account. So if China wants to develop farmers' cooperatives, is it that easy?

If you turn back, you again have to say why finances are so unreasonable. Look behind finance, how many departments are there? Which department is willing to give up its own interests? No matter how much you say, in the face of complex institutional contradictions we are powerless. Everyone, do not think that if we hold a meeting, and we have held several, do not think that after coming here and holding a meeting, it will be solved when you go back. Do not hold hope. Why do you still come every year? Ask yourselves why you come. Do you say this cooperative training is useful? It is very useful, huddling together for warmth. In the deep winter. What I am saying are all plain truths. What did you come for? To tell each other your grievances, to pass on experience to each other, and to know that I am not the only one this difficult and bitter. Everyone is quite difficult and bitter, and some are even more bitter and difficult than I am. Then by comparison, life still seems passable, and then it feels as if there is a bit of comfort. Do you really take those laws and go back to act according to law? Is the law sick or are you sick? Are you stupid? Where is there anyone really acting according to law in the village? Is it possible? It is fine to fool students in the classroom. If you are fooled, you can only blame your own head for suffering. If he is stupid and you are stupid with him, it will stupid you to death. How can you possibly do it? We have done this for more than ten years. What are we doing? Why do many people criticize us? Because we are earnestly helping farmers organize. No matter under what name, whether you are an arts team, or an elderly association, or practicing some kind of Huangchang dance, just organize here, everyone huddles together, and when you go back also huddle together. It is always better than holding it in, because there is nowhere to reason with you.

Let me tell you another story. You know about the matter back then when Wen Jiabao helped migrant workers demand unpaid wages. Later I met him again. I said a group of you did not get your wages back. You only had a chance to meet the premier, and in the end followed the provincial party secretary to guarantee the problem would be solved. Was it solved? It only guaranteed that his own wages were brought back. This counted as giving Wen Jiabao enormous face. You are the premier of a great power. Do you say you want to help this group demand wages, can they be recovered? Can this system allow you to recover them? So when I later met Xiong Deming, what if you yourself got your wages back, then what? He said there was no way, go home and raise two more pigs, no other way. Do not think that in the past you had a broad road. You cannot talk that talk. You are not qualified. You are not the one on the platform talking about livelihood and getting a full share. You are just a cooperative. We must not forget now, not only you, why do we insist on mobilizing students to do this? Because students are now called the small asset organization. After they graduate and enter society, they mix into the middle class. Do what? The students we are now training are nothing more than to keep their conscience from completely dying after entering the middle-class club. Thus there is a considerable batch of thousands upon thousands of students trained by us. Now whether they become journalists, staff members, run companies, or enter government agencies, more or less they still retain sincere feeling and a passion in their hearts, and they are preserving it as much as possible. Where are our achievements? Among them. What do these people do? These people will not forget the experience back then when they went to the countryside in stages and once merged with the local area. These people will still continue to do it, even if only 10% or 5% do it, five times is greatly good. As for our elders and fellow villagers, they have not yet been alienated to the point of learning to toddle and stagger, and still taking that as beautiful. So what have we done? We say we have made a group of people, preserved conscience, preserved passion. Those willing to remain steady in this country through great storms, remaining steady still depends on farmers. Moreover, just now in Liang Shuming's ten-year project, I said this is not a niche matter. Because the state is adjusting. From almost completely ignoring farmers' interests in the 1990s, to accepting the three rural issues as the top priority, this is a huge change. Of course you cannot pursue the interests of every interest group. Only by taking care of interest groups' interests will they make adjustments. But after all we have seen that in recent years rural areas have received unprecedented central investment. After all we have seen that this investment effectively helped farmers prop up the umbrella of social security. Our compulsory education no longer charges money. Our farmer education has been developed. The government did it. All these major changes are changes in the environment. In this process of change, if we do nothing at all and just sit back and enjoy the results, is that us? We are active. It is precisely by using this opportunity. This opportunity is the same for anyone. For example, infrastructure has been built to your village. So now our cooperatives must grasp this historical period of opportunity. I just said the fiscal preferential policies have not been solved. Now the state's largest three expenditures are the three rural expenditures, over one trillion yuan. In 2003 it already reached over 130 billion. In 2014 it still grew by 50%, so approaching 150 billion. In 2015 it will still grow. This is the largest expenditure item. Next, as, note that everyone says Xi Dada fights corruption, and the anti-corruption effort is very strong. Those eating and drinking matters now basically, of course one cannot say have disappeared, are not so boldly done, and must be done secretly. These are good phenomena. We must seize the major climate change. Because you surely know he had unhealthy phenomena in the past. Now you can negotiate. This time I will only take a leg, I will not hug you. I will not petition for you and I will not make trouble. Let us trade. Trade is market economy, and let me tell you this is not one person trading. Behind me are three or four thousand households. If we stomp our feet, the whole locality will resound. If we say you are bad, then you are really bad. Will he not also have to weigh it? Therefore they have now all become social celebrities among farmers, known at home and abroad. It is they who are our hope. It is the result of so many thousands upon thousands of young people going to villages to truly do things, whether among migrant workers, among citizens, among students, or among village farmers. Our generation must remember what my student, who has already passed away, said. He said, teacher, take it, the students are successful. We are only a stepping stone, letting these students step more steadily. So organize for protection. And organizing is the first point of protection. This is what Mao Zedong said. So no matter by what method, organize.

Now the comparatively legal method is cooperatives. Further, I say that in coming to this meeting this time, what should everyone use? A new and comparatively important policy is the land issue I want to discuss. The land issue is very simple. Xi Dada has already set the tone. First, ownership cannot be changed, and must still be maintained. Second, farmers' contracted use rights cannot be changed. Third, transfer of management rights can be done. Therefore everyone present, note that if we want to develop comprehensive farmers' cooperatives spanning primary, secondary, and tertiary industries, it is crucial to turn the land rights of our members, especially core members, into shares and form the cooperative's property relations. Cooperative property relations relying on cash shares was a method with no other choice when we launched cooperatives more than ten years ago, in 2003. At that time there was no cooperative law. Now we not only have one, but there are also two important policies we can use. One is that mature cooperatives can do finance internally. The second is that land use rights can be made into shares. Making land use rights into shares is an important step in forming stable property relations. With this, everyone, we can relatively stably establish our internal finance, or what is called the cooperative finance property group. Many people worry whether I will thereby lose land rights. You cannot. Why? All resources cannot be changed. External resources up to now can only lease your land. Even if you say I will turn the land into shares for you, if you go outside and say it is shares for an entrepreneur, he does not dare, he cannot dispose of it. Why can he not dispose of it? There are too many lessons. Once you really dispose of it, you say I will take the one thousand mu you turned into shares, I dispose of it, I sell it. There may be several hundred farming households on it. I have three or five households who do not dare. Then it is troublesome. It is called wherever three households are involved, the king and Qin must act. In fact, as long as there are two or three farming households, and farming follows three households, it is also certain that the king and Qi must respond. Once something happens and they truly risk everything, for him it is a one-vote veto and his official cap is removed. Do you dare? Everyone do not worry. Farmers' rights are the ultimate expression, namely the mass spontaneous incidents happening everywhere now. If you want stability, then do not really touch farmers' two or three mu of land, because this land increasingly becomes the anchor of farmers' rights, with the anchor nailed into the ground. Let me say something even less pleasant. Since the global financial crisis in 2009, the great tide of industrialization, wave after wave has come, from Zhejiang. All places that were previously politically correct and stable have begun to appear unstable. Because when those local financial departments lend loans and say they want to develop production, in fact they flee. Then they leave behind large amounts of finance locally. This is the fundamental reason for the bad debts of local governments now and the unstable public security situation. It is rootless investment fleeing. Some also run to the interior. Someone says I will invest in your place, you give me matching land, and take loans. China's deindustrialization trend is certain. You now have older brothers coming back, and only younger sisters are left at home. The older brothers will come back, because capital decides it does not want him, it abandoned him. A large number of migrant workers will return home. Under this great tide of deindustrialization, these people come back. Do they intend to do agriculture? Ask these people who come back. They would rather bask against the wall nearby, chat and play cards, and still not do it. This means their labor power has already been priced by the industrial labor market, and even if they cannot earn money after returning, they still enjoy it. At this time, if you ask me, it is both a challenge and an opportunity. The so-called challenge is that the situation is unstable. The state must have more policies to respond to these challenges. We currently have a leader with a saying I still remember clearly. He said what is meant by resolving contradictions among the people? In order to resolve contradictions among the people, various preferential policies will still increase, and investment in rural areas will still increase. If we already have mature organizations, if we already have cooperatives with land as shares, we will certainly be the absorbers of further increased preferential treatment. Because at this time the government worries about security, and the government faces instability. Whoever can help stabilize, townships will certainly tilt more or less. All right, today I will not use this PPT. It is for classroom use. Perhaps everyone is not unwilling to listen. I will say some plain truths. There are certainly mistakes.