E-commerce firms set foot on land circulation

For the past 50 years, Hu Shaobai has been toiling on a piece of farmland, planting rice and rapeseed. "Finally I can get a rest," he said, as he has recently transferred the land to an e-commerce company.

Zhejiang Xinghe E-Commerce Co. Ltd., an enterprise directly under Zhejiang Supply and Marketing Cooperative, in a joint effort with e-commerce giant Alibaba and the farmers' cooperative in Jixi County of Anhui Province, has launched China's first online personal customized farm project, also called Gengdibao, in March.

Customers participating the project can subscribe the right to use the land via the online platform and get the land output. The land is circulated from farmers to Xinghe company, which further entrusted the management of land to the local farmers' cooperative.

Seventy-year-old Hu Shaobai is a villager in Longchuan Village under Jixi. About 30 percent of the village's 1,300 mu (87 hectares) of farmland is left unattended.

"The young people have gone to work in the cities. Farmers as old as me mostly do not have enough energy to continue working in the fields. It has been a pity to have so much land wasted." Hu said.

Since the program was launched, 3,560 customers from around the country have subscribed more than 430 mu of land, and the sales volume exceeded 2 million yuan (320,000 U. S. dollars), said Dong Jiancheng, manager of the local cooperative.

Nearly 300 farming households in Jixi have signed land circulation contracts with Xinghe company. The farmers can get an annual circulation payment of 800 yuan per mu (one hectare equals 15 mu).

The local cooperative hires farmers to work in the subscribed land, and those farmers get a monthly wage of about 2,500 yuan, while in Jixi County, the average monthly wage of the farmers is less than 800 yuan in 2013.

The integration between land transfer and e-commerce can help protect farmers' rights and improve the development of modern agriculture. Urban land is owned by the state and rural land is under collective ownership. The use rights of the majority of the collectively-owned farmland were split and allocated to farmers under the household contract responsibility system introduced in 1978, when sweeping rural reform ended communal farming.

To boost economies of scale and give more property rights to farmers, China's central authorities have vowed to support the transfer and mortgage of land-use rights.

The use rights of 340 million mu of farmland had been transferred to larger farming entities as of the end of 2013, according to the Ministry of Agriculture. Many large growers and agriculture production companies have been confounded by problems such as distribution channels, logistics and sources of capital to support the enlarged production scale.

An Yufa, professor at China Agricultural University in Beijing, said, the mechanism of the online farming project would not only raise funds efficiently, but lower investment risk since the crops grown are already ordered by the customers.

The project can also ensure high quality management of farming which can improve the added value of the agricultural products, he added.

China's leading online retailer JD.com also announced last month that it will join with 18 vegetable and fruit production bases in Beijing to provide personal customized farm services.

Yu Ying, agricultural expert with JD.com said, the e-commerce companies have cooperative relationships with the logistic companies, and they can also gather customers' transaction information which can help guide the agricultural production after being analyzed.

Xinghe company is planning to extend the online personal customized project to other places including Huangshan City in Anhui and Quzhou City in Zhejiang province.

Xu Congxiang, a deputy to the National People's Congress (NPC), said, there is still a lack of laws and regulations to protect the parties involved and the healthy development of the project must be supported by legislation.