Farmers flock to sheep bank for funding
Innovative measures are raising living standards in an isolated community on the edge of a desert. Li Lei reports from Beijing, with Hu Dongmei in Yanchi county, Ningxia Hui autonomous region.
Yin Guotao, a sheep farmer in a remote village in Yanchi county, Ningxia Hui autonomous region, beamed at his friends as he spoke proudly about his lucrative business.
The 47-year-old was buoyed by last year’s earnings of more than 500,000 yuan ($74,000) from the sale of 2,000 Tan sheep.
The animals were purchased by Ningxia Suyuan Technology Development Co, a government-backed company that advocates organic sheep farming.
“I am not bragging,” Yin said, referring to his earnings. However, the amount is worth boasting about, given that Yanchi is an impoverished county on the southwestern border of the Mu Us Desert, one of China’s largest arid areas.
His earnings mean that Yin is one of Yanchi’s leading, and wealthiest, farmers of Tan sheep, a breed endemic to China that is noted for its delicious meat and long-staple wool. Gourmets regard the meat as some of the best in the country, which is reflected in the market price of about 40 yuan per 500 grams.
However, farmers in Yanchi toiled for decades for scant financial reward as a result of poor access to markets and a lack of the financial services that are crucial to business expansion.
It wasn’t until last year that Yanchi was removed from the regional government’s list of destitute areas. The county was one of the last places in China to be officially classified as poverty-free, ahead of the central government’s goal of eradicating rural poverty by the end of 2020.
Nine years ago, when Yin started his farm, he was haunted by the fear that the volatile price of lamb and the lack of distribution channels would destroy his livelihood.
Those fears have been shared by generations of Yanchi farmers, who depend on animal husbandry for a living.
Things began to change in 2017, when the Tan Sheep Bank — a microfinance program devised by Suyuan in the same year — took root in the county.
Yin is just one of many farmers in the county to be helped by the program in the past two years. Using the sheep as collateral, the bank offers loans to poor farmers looking to expand their operations.
The interest rate is almost zero, which is a boon for impoverished farmers with limited means of securing development funding.
Yin obtained a loan of 150,000 yuan, a figure determined by the number of sheep in his flock and their breed purity. The company also pledges to buy the sheep when they are ready for market.
Farmers who register with Suyuan are eligible for a monthly interest payment of about 3 yuan for each sheep. To be registered, the sheep must meet standards set by Suyuan and be raised organically, thus catering to consumer demand and boosting sales.
According to Suyuan, it has signed purchasing contracts with 56 farmers, including 32 officially classified as impoverished. However, only 14 of the farmers have taken out loans, which total more than 700,000 yuan.
Breed purity
Ningxia’s Tan sheep have a combined brand value of 6.8 billion yuan, according to the Ministry of Commerce.
However, ensuring breed purity is a constant headache. Over the past decade counterfeit Tan meat has flooded the market, pushing down the price and ultimately taking a toll on farmers.
The problem is exacerbated by the fact that Yanchi lies at the junction of the provinces of Shaanxi and Gansu and the Inner Mongolia autonomous region.
That means Tan sheep can easily be interbred with other strains, which undermines the quality of the meat, according to Feng Jingtao, director of Suyuan, who said the sheep are among Ningxia’s most recognizable products.
“The sheep bank was designed to tackle the problem and assist poverty relief efforts,” he said.
Suyuan uses the loans and interest payments to encourage farmers to ensure the purity of their Tan sheep. Meanwhile, in an effort to counter fakes, it has established a system to trace the origins of meat entering the market.
“We have rigid standards that we apply when sheep are registered. That has sent a message to farmers: if you want to collect interest payments or obtain a loan, you need to ensure that your flock only contains purebred Tan sheep and you must alter your farming methods to meet market needs,” Feng said.
He added that the change would boost market prices and sales, which will benefit the farmers.
Stable incomes
Zhou Guilin, a poverty relief official in Yanchi, said the bank, together with other relief programs that loan money to poor farmers to raise Tan sheep, could stabilize incomes and prevent residents from slipping back into poverty.
According to figures provided by her office, nearly 10 percent of the county’s 11,193 impoverished families feel trapped because of a lack of startup capital, and more than half have at least one sick or disabled member.
Zhou said all the families are potential participants of the program. “You don’t need to be young and strong to raise Tan sheep. Many 60- or 70-somethings are herding them,” she said.
The sheep bank is just one of many innovative approaches devised by the nongovernmental sector to assist the nationwide poverty reduction campaign, which aims to eradicate extreme poverty in both urban and rural areas nationwide in time to mark the centenary of the Communist Party of China in 2021.
In late 2012, the central leadership ramped up targeted relief efforts and reiterated its pledge to eradicate rural poverty by 2020.
The five-year period that ended in 2017 saw the impoverished population — which stood at almost 100 million in 2012 — cut by two-thirds.
The feat was described by the State Council Leading Group Office of Poverty Alleviation and Development, the top anti-poverty agency, as the greatest achievement in the country’s history.
Last year, the task was listed as one of the “three tough battles” the country must win by 2021, along with preventing financial risks and tackling pollution.
About 10 million rural poor saw their living standards rise last year, according to Liu Yongfu, China’s anti-poverty chief, when he addressed a national poverty reduction conference in Beijing in January.
However, even as the 2020 deadline approaches, about 20 million rural poor nationwide are still waiting to be lifted out of poverty.
Liu has described the task as “arduous” on many occasions because many of the remaining poor are scattered across vast, inaccessible rural areas, such as Yanchi, or are unable to work as a result of age, illness or disability, and therefore require the assistance of innovative relief methods.
Zhou, the poverty relief official in Yanchi, said a diversified approach to relief is required because people are impoverished for different reasons.
“The Tan Sheep Bank can help farmers, but we will endeavor to identify those who are unable to work and ensure they receive basic living allowances and other fundamental protective measures,” she said.