In Jiangxi Province, Chinese officials are giving a cash bonus to encourage large-scale farmers who exceed average rice yields.
A propaganda article describes a farmer with 1.5 million yuan in cash stacked in neat piles on a table in his courtyard as he counts his year-end bonus. In Poyang County, large-scale farmers who cultivate 6000 to 10,000 mu (1000 to 1650 acres) of rice get a bonus "award" if their yields exceed the average. The payment is 0.5 yuan per jin (about US$0.16/kg) for every jin over the 1,000 jin-per-mu (7500 kg/ha) average yield (from two crops of rice). The per-jin subsidy rises with the yield. If a farmer achieves a yield of 1051 to 1100 jin, the subsidy goes up to 1 yuan/jin. The subsidy is bumped up to 1.5 yuan/jin if the yield is 1100 jin or more.
The award is paid out at the end of the year. Farmers are getting awards of 50,000 to 100,000 yuan ($8250-$16,500). The article doesn't explain how authorities verify the yield obtained by the farmers.
The award program is being carried out in Poyang county where officials spend 2.5 million yuan on the payments annually. It appears to be an experimental program designed to attract business operators from other sectors to invest in agriculture and consolidate land into large contiguous operations.
The article describes a "large farmer" named Ling Jihe who made 10 million yuan in the construction business and started up an agricultural company in 2009. He says he went door to door carrying wads of cash to rent land from villagers in order to form a large farming operation. He invested tens of millions of yuan in renting land, making improvements on it and buying machinery. It seems that the business operators subcontract the land to other farmers who actually do the farming.
Farmers say the net return per mu from growing rice is relatively low--300 to 400 yuan per mu (about $300-$400 per acre)--but "economies of scale" give them good earnings of 3-to-4 million yuan from 10,000 mu of land. According to the article, the award payment adds to the "economies of scale."