Research on the Development of Rural Collective Economy in Shandong Province

Xiaoyan ZHANG, Jingxue HE, Lili WANG, Feng LIU

Institute of Science and Technology Information, Shandong Academy of Agricultural Sciences, Jinan 250100, China

Abstract The 19th National Congress of the Communist Party of China proposed a strategy for rural revitalization and made a scientific deployment. In this context, how to pursue the development of rural collective economy is of great significance. Analysis on the status of the development of rural collective economy in Shandong Province showed that decentralized small farmers had a wide range of wealth, poor income-generating capacity, and weak income growth. The development models of rural collective economy in Shandong mainly included the follows: property leasing to explore the way to make money on the spot; relying on resources to build advantageous industries; creating a livable living environment led by capable persons; cooperative management to sound agricultural production and management system; and reform of property rights system to develop the collective economy. In addition, it also found that the rural collective economy in Shandong Province had weak economic foundations, uneven development, financing difficulties, debt resolution difficulties, lack of scientific support policies, and limited innovation and development of leadership team. In response to these problems, countermeasures and suggestions were put forward in this article.

Key words Shandong Province, Rural collective economy, Development status, Development model, Existing problem, Countermeasure and suggestion

1 Introduction

The development of rural collective economy plays an important role in promoting rural development and increasing farmers’ income[1]. Shandong Province is a large agricultural province. The issues of agriculture, rural areas and farmers are always related to the actual interests of the province. Developing and strengthening the rural collective economy is conducive to supplementing the "short board" of economic development, thereby laying a solid foundation for building a model for revitalizing Shandong Province and achieving the grand goal of building a well-off society in an all-round way. This study is an overview of the development of rural collective economy in Shandong Province in the critical period of building a well-off society in an all-round way and in the context of the strategy of rural revitalization. In-depth investigations and visits to the rural areas of 16 counties (cities, districts) in 4 cities of Weifang, Qingdao, Jining and Tai’an were conducted. While mastering a lot of first-hand information and data, the macro situation of rural collective economic development was understood. According to the context of development status →development model → existing problem → countermeasures and proposal, the village-level collective economy in Shandong Province was analyzed.

2 Development status of rural collective economy in Shandong Province

According to statistics from Shandong Provincial Statistics Bureau, as of the end of 2016, Shandong Province had a total of 1 767 townships (towns) and 82 000 administrative villages. Among them, 35 000 administrative villages had established collective economic organizations. The total income of rural collective economic organizations was 54.087 billion yuan, and increased by 1.5 percentage points compared with 2015 (Table 1). The number of villages with operating income was 43 000, accounting for 52.7% of the total. Per capita disposable income of rural residents in Shandong Province in 2017 was 15 118 yuan, and increased by 8.3% compared to 2015. From a national perspective, rural collective economic development was very uneven, and there were great regional differences, which were far from the requirements of the central government and the expectations of farmers[2]. The rural economic development of Shandong Province also had the problems such as insufficient number of large-scale agricultural operators and professional farmers’ cooperatives (Table 2), uneven development, and poor ability to generate income. The problem of uneven development of scattered small farmers was prominent, and the average size of agricultural land per household was relatively small. In terms of scale, in 2016, the total number of farmer households in Shandong Province was 22.432 million. The number of farmer households with land below 0.67 ha was the largest, accounting for more than 90%. The proportion decreased with the increase of the scale, and the farmer households with land exceeding 6.7 ha accounted for only about 0.1% (Table 3). The average income per village was 174 000 yuan. The number of villages with income below 50 000 yuan was 61 000, accounting for 74.4%. About 39 000 villages had no operating income (Fig.1). It showed that the gap in the income of individual farmers was wide, the operating income was limited, farmers’ own ability to generate income was poor, and the proportion of village-level operating income was closely related to the development of the village collective economy[3]. According to the specific situation of rural areas in Shandong Province, it could be found that the collective economic income mainly consisted of operating income, outsourcing and submission income, investment income and subsidy income, of which operating income accounted for 43% of the total economic income of rural collectives throughout the year (Fig.2), so the revenue generating ability was poor.

Table1RuralcollectiveeconomicincomeinShandongProvincein2016

YearTotal income108 yuanTotal expenditure108 yuanTotal profit108 yuan2016540.87398.01142.862015533.13415.02118.12Year-on-year∥%1.5-4.120.9

Table2NumberofagriculturalmanagementorganizationsinShandongProvincein2016

RegionNumber ofagriculturaloperatorshouseholdNumber oflarge-scaleagriculturaloperatorshouseholdNumber ofagriculturalproduction andoperation unitsNumber offarmersprofessionalcooperativesShandong Province17 777 779466 124179 09690 085Jinan City819 54632 4106 9642 911Qingdao City1 003 10125 27710 1434 625Zibo City592 00910 3015 9832 625Zaozhuang City694 7857 2815 2232 732Dongying City230 59810 4633 3141 463Yantai City1 204 741 43 81819 2066 653Weifang City1 477 484161 41817 5258 542Jining City1 506 78741 27515 9518 457Taian City1 063 13011 2566 6873 414Weihai City448 1456 2517 7062 292Rizhao City650 26210 2588 0413 031Laiwu City285 1183 6672 561964Linyi City2 449 45020 58119 32710 314Dezhou City1 112 37017 7619 0635 981Liaocheng City1 277 16229 5509 0155 784Binzhou City703 31012 0857 9444 851Heze City 2 259 78122 47224 44315 446

Note: Farmers’ professional cooperatives refer to farmers’ cooperatives whose main business was agricultural production, operation or service.

Table3ScaledistributionofagriculturallandinShandongProvince

Scale∥haNumber of households (104)<0.672 047.90.67-<2.00168.12.00-<3.3318.93.33-<6.675.46.67-<13.332.1≥13.330.8

Fig.1IncomeleveldistributionofadministrativevillagesinShandongProvince

Fig.2IncomeofruralcollectiveeconomyinShandongProvincein2016

3 Development models of rural collective economy in Shandong Province

Due to the existence of factors such as division of labor, degree of marketization, and imbalances in regional economic development, the realization of rural collective economy has diversified. This study extracted four representative village-level collective economic development models: property leasing, resource-based, capable person-driven and cooperative management.

3.1PropertyleasingMaking use of property assets to generate income. In 2016, the rental income of rural collective construction land in Shandong Province was 970 million yuan, and increased by 186% year-on-year, with immediate results. Most of these villages are urban villages and suburban villages. By utilizing various types of idle real estate facilities, collective construction land,etc., property economy was developed through independent development, joint venture and cooperation and investment promotion. Through the construction of standard factory buildings, street shops, markets, office buildings, migrant workers’ apartments,etc., the village collectives are allowed to obtain long-term and stable rental income. Property assets had been built to generate income. For economically weak villages with remote geographical locations or planning restrictions, lack of resources, and difficulties in developing real estate properties on the spot, subsidies from governments at all levels were utilized to build property assets in areas such as urban planning areas and community service centers through purchase, off-site construction, joint village construction, and investment and joint construction. Houshigou Village, Tieshan Street, Huangdao District, Qingdao is a city-level economically weak village. From 2015 to 2016, the superior allocated 700 000 yuan of special poverty alleviation fund to this village. In order to maximize the return on assets, after making decision through democratic procedure, the village used the entire poverty alleviation fund to purchase property assets. Thus, the village can get a rental income of 56 000 yuan every year. The 406 000 yuan of late-period support fund for large and medium-sized reservoirs from Qingdao City was used to buy a hotel apartment, and thus, 24 000 yuan of rental income can be obtained every year.

3.2Resource-based(i) Developing characteristic and advantageous industries. Shandong Province focuses on the development of modern characteristic agriculture and forestry, brand agriculture and ecological recycling agriculture to build regional brands, and an industrial structure of "one product for one village" and "multiple products for one village". For example, Dongdazhai Village, Hetoudian Town, Laixi City has used all kinds of media to build the "Dongdazhai" brand. Apple of Dongdazhai brand implement industrialized management. It has passed the national A-level green food, pollution-free agricultural product and geographical indication certifications, with an annual increase of more than 4 million yuan. Apple industry has become the pillar industry of the village. Relying on brand effect, 6 companies have been attracted to settle in the park. The enterprises in the park create more than 3 million yuan in income for the village collective. (ii) Developing rural tourism. The villages with folk culture, rural scenery and natural landscape resources have mined rural tourism resources through rural tourism economic entities, and independently or jointly developed and operated farmhouse, fisherhouse, resort, picking garden, farming experience, ecological experience, leisure farm and other projects to increase collective income.

3.3Capableperson-driven"The key to getting rich collectively lies in the branch; the key to the strength of the branch is the monitor". Village-level party organizations and village committees directly lead cooperatives to drive farmers to become rich. The secretary of a community in Zhucheng City has taken advantage of the convenient location and organized the collective to fill the old river bottom with a length of more than 300 m and a depth of 6-7 m for the development of commercial and residential buildings. Since then, he has started to plan the construction of agglomeration and integration projects. The project has a planning area of 13.33 ha, and can accommodate 1 000 households. A total of 18 multi-storey residential buildings had been built, with a building area of 41 000 m2. The collective income had been increased by more than 20 million yuan.

3.4CooperationCollective economic organizations adopt contracting, leasing, shareholding, introduction of strategic investors,etc. to cooperate with other market legal entities or finance through government financing platforms to obtain high income, innovate development models, develop collective resources, and revitalize collective assets. Zhongshangyu Economic Professional Cooperative in Kuiwen District, Weifang City has actively carried out capital operations. It financed 40 million yuan from Weifang Jiahao Real Estate Co., Ltd., and can obtain an annual investment income of 8 million yuan. Dongguan Community, Shengcheng Street, Shouguang City has invested in 110 million yuan to establish a small loan guarantee company to enter the capital market and the financial sector, and the collective income has increased by more than 20 million yuan annually.

4 Problems in the development of rural collective economy in Shandong Province

4.1WeakeconomicfoundationIn the process of implementing the household contract responsibility system, most of the village collective assets and resources have been depleted, and the village collective economy has returned to a nearly blank state. Thus, the village has become a veritable "three-no-village", and it has lost the important material foundation for economic development. In the remote villages without resources available for development and utilization, talents, funds or other advantages, the collective economic development of villages is maintained only by the government’s limited subsidies, and they even have a lot of debt. The problem of the gap between the rich and the poor is particularly prominent. As mentioned above, the average income of Shandong Province in 2016 was 174 000 yuan. However, the proportion of villages with income below 50 000 yuan was 74.4%, and about 39 000 villages had no operating income. As some villages have serious debts and bad reputation, the collective enterprises have difficulty to raise funds from the financial system. Excessive informal channel financing increases not only financing costs but also financing risks and social instability. In short, the existing collective enterprises have difficulties in financing and they are difficult to grow.

4.2LackofscientificsupportpoliciesLacking strong supportive policies. Since 2004, the Central Committee of the Communist Party of China had issued 13 No.1 documents, which all stressed the need to vigorously develop the rural collective economy. However, the long-established inertia thinking of increasing farmers’ income and neglecting collective economic development had made the rural collective economy lack strong external guarantees during the development process[4]. On the one hand, for the development of rural collective economy, governments at all levels often give directional and principled guidance, lacking specific and actionable policy support. Many supporting laws and regulations related to the rural collective economy have not yet been established. Therefore, it is difficult to carry out operations in a timely and effective manner. On the other hand, many places pay attention to increasing farmers’ income, rather than paying enough attention to the development of village collective economy. Therefore, rural collective economy lacks necessary guidance, strong support measures and preferential policies. Scattered poverty alleviation funds cannot effectively help the villages, and cannot guide the village collective economy to sustainable development.

4.3Limitedinnovationanddevelopmentofleadershipteam

To develop the rural collective economy, all agricultural and non-agricultural resources must be fully mobilized, and special emphasis should be placed on the government’s guiding role in the effective realization of formal development of the rural collective economy[5]. However, field research found that village Party secretary and management and finance staff were generally aging and lacked professional knowledge. More than 60% of them were over 50 years old, and more than 80% of them had an education level of high school or below, characterized with weak innovative consciousness and ability, irrational knowledge structure and rigid thinking. It was mainly manifested in the following points. First, the fear of difficulties was serious. Most village operations relied mainly on superior financial assistance. Some rural cadres had developed inert thoughts such as "waiting", "requiring" and "reliance". Some village cadres had the idea of "setting for less", lacking the motivation to leapfrog development. They had low goal positioning and serious fear of difficulties. They worried about the villagers’ complaining about the failure of development and management and dissatisfaction with the organization, and even being punished, lacking the spirit of responsibility. To some extent, this had affected the development of village-level collective economy. Second, there was a lack of intellectual support. Some village cadres had enthusiasm for development, but their management capabilities were limited. They had found no channels for development. Most of the people who had the ability had gone out to do business and work. The relative quality of people left behind in the countryside was lower, and their thinking was conservative. College graduates were more willing to look for development opportunities in cities.

4.4LowindustrylevelanddifficultdevelopmentFirst, the industrial level is low, the scale is small, and the source of collective economic income is limited. From the survey, more than one-third of the villages in the city had no operating income; some villages had become "empty shell" villages with "no collective property, no collective resources, no collective enterprises, and no collective income", and the collective economy had existed in name only. Even in villages with operating income, the overall economic strength was weak, and the collective economic income mainly came from low-level industries such as collective land contract fees, making it difficult to form market competitiveness and achieve sustainable development. Second, it is difficult to develop the industry. Excepting a few well-developed village collectives, the majority of rural areas still currently focus on the development of traditional breeding. Developing new forms of agriculture such as leisure and tourism requires strong economic strength and policy support, in addition to innate advantages such as better natural resources and transportation locations. At the same time, affected by traditional breeding habits, fostering new industrial models requires long-term development and guidance.

5 Countermeasures and suggestions

5.1Givingfullplaytoresourceadvantagesandrevitalizingcollectiveassetresources(i) Taking advantage of resources. By integrating resources such as village collective forest land, orchards, potholes, mobile land, and idle factories, lease economy would be developed to activate the inherent vitality of village-level collective economic development and increase village-level collective economic income. Through unified development, individual household contracting operations and reasonable revenue sharing, edge economy, such as timber forest, economic forest and Chinese herbal medicine would be developed to increase village-level collective income and villagers’ income. (ii) Taking advantage of location. Villages could be guided to give full play to their respective advantages and broaden the source of collective income to build professional villages with distinctive characteristics and strong competitiveness. Villages within the urban planning area should carry out construction of new rural communities, and free up land indicators to build commercial markets and establish tertiary industry projects, around the principle of integrating into the central city, by making good use of the preferential policies linked to the transformation of "village in the city" and increase-decrease linking of urban and rural land. Villages near large factories should focus on service companies. With capital and land participation, service entities could be established, tertiary services such as modern logistics could be developed and projects on the industrial chain could be extended to build a regional economic community. Services such as site, factory building, hydropower and labor could be provided to enterprises to increase collective and village incomes. Villages near the main roads should take advantage of the flow of people and logistics to plan and build economic belts along the road, thereby increasing the collective income of the village by developing industries such as e-commerce and modern logistics. Villages along rivers must develop leisure village tour projects such as farmhouses, picking gardens and fishing gardens through a variety of channels, such as collective investment, driven by large households, stock cooperation and investment promotion, changing resource advantages into economic advantages.

5.2Formulatingsupportingpoliciesandincreasingfundingsupport(i) Formulating supporting policies. Currently, in the process of accelerating the development of village-level collective economy, special attention should be paid to the assistance to economically weak villages. We should formulate supporting policies according to local conditions, stimulate collective economic development, give full play to local advantages for economically weak villages, pinpoint economic growth points, broaden income channels, increase support for weak villages and grant funding and project support. Through "blood transfusion" and "hematopoiesis", the economic strength of economically weak villages could be strengthened to ensure that village-level organizations function properly. (ii) Increasing funding support. We should establish special funds for the development of collective economy at the village level, integrate funds for supporting agriculture in various sectors, support village collective management projects with feasible development plans, low operating risks and scientific management by means of discounts, rewards, subsidies,etc. In particular, we must increase support for some economically weak villages to increase their collective economic income. At the same time, we should increase credit support, promote the extension of the service chain of agricultural financial institutions, innovate microfinance methods for eligible village-level collective economic development projects, increase credit lines, reduce loan interest rates, extend loan maturities,etc. to provide preferential treatment and support, and solve the problem of insufficient funds for rural collective economic development. In addition, we should improve taxation and other preferential policies and implement corresponding reduction and exemption policies. For economic projects or new enterprises that are collectively developed by the village, in addition to the amount of deductions and exemptions provided by the tax law, further deductions might be granted as appropriate.

5.3OptimizingleadershipteamandimplementingfaulttoleranceandcorrectionmechanismOn the one hand, we should focus on optimizing the "two committees", select and appoint the best party secretary of the village, break industry, identity, geographical restrictions, choose boldly leaders in getting rich, experts in getting rich in technology, returning entrepreneurs, veterans, college students and village officials with emancipated minds, strong career, management skills and responsibility through mass elections, open competitions and organizational appointments as village officers to improve the ability of the village team to develop the collective economy, carry out training on new ideas, improve the quality of village cadres and comprehensively improve the quality and ability of village cadres to develop village-level collective economies. On the other hand, the implementation of a fault tolerance and correction mechanism is the key to motivating cadres to work. The implementation of fault tolerance after the fact will encourage trial and error beforehand and inspire the enthusiasm of daring to try. From the perspective of grassroots practice, reform is a process of continuous exploration, and it is inevitable to make mistakes in the process of exploration. When cadres have clear expectations for hindsight fault tolerance, they would naturally have the motivation to work. Otherwise, if someone worry out "settling account afterwards" before beginning to do something, they would inevitably be shiftless, and an idea of "the more you do, the more mistakes you make" would generate.

5.4Buildingamodernagriculturalindustrialsystemandimprovingindustrialcompetitiveness(i) Relying on operating entities to increase income is the most important form of accelerating the development of village-level collective economy. Villages are encouraged to establish planting and breeding, intermediary service, processing value-added and product distribution business entities, responding to market needs, focusing on the adjustment of rural industrial structure, agricultural industrialization, and rural socialization services. (ii) Developing advantageous industries. Based on resources, humanities and other advantages, collective economy such as "suburban type", "planting and breeding type", "resource type" and "service type" are developed targetedly. First of all, the village houses located in the center of the town and the suburban area can be used to set up property management companies and housekeeping companies around the service industry, to provide services for residents, communities,etc. and increase collective income. Secondly, village houses with good industrial development and many project constructions can focus on engineering construction and material transportation,etc. around enterprise construction and project construction. Thirdly, villages with good agricultural development can take the form of "branch + cooperatives (associations) + farmers",etc. to provide low-profit services such as logistical guarantees, labor intermediaries, and agricultural production for enterprises, large-scale farmers,etc., in order to increase collective income. Finally, villages with abundant natural resources can develop rural hotels, farm household tourism and other projects relying on the advantages of natural scenery, local culture, ecological resources and others to make the tourism industry bigger and stronger and increase the village’s collective resource development income and service operating income. (iii) Developing rural cooperative economy. We should encourage rural areas to develop cooperative economy, support the development of large-scale, professional and modern operations, and encourage village-level organizations to lead the establishment of various professional and technical associations, professional cooperatives[6]and professional service companies, which are specifically responsible for guiding agricultural production, jointly using large-scale infrastructure, unifiedly purchasing agricultural production materials, and concentratedly selling agricultural and sideline products, in order to increase the collective economic income by providing farmers with paid services such as technical guidance, information transmission, material supply, product processing, and marketing. We should also encourage village-level professional cooperatives and merchants to sign intent agreements, so that cooperatives supply agricultural products directly to supermarkets, grocery markets and convenience stores. Thus, a platform for direct sales of high-quality agricultural products and a production and sales integrated chain under market economic conditions should be established, looking for income growth points of village-level collective economy in services.