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Inner Mongolia boosts poverty relief efforts

2019-11-29

Huo Jinyuan, a 72-year-old farmer in Ulaanqab in the Inner Mongolia autonomous region, struggled to make ends meet before an oats company joined hands with the local government and financial institutions to help lift impoverished households in the region out of poverty.

The annual net income of his family has now increased from between 3,000 yuan ($427) and 5,000 yuan to 12,000 yuan as Yinshan Oats, a company specialized in oat breeding, planting, deep processing and warehouse logistics in Qahar Right Wing Middle Banner of Ulaanqab, offered him free oat seeds and bought the oats he planted for 3 yuan per kilogram, 30 percent higher than the market price.

The production capacity of his farmland also increased from around 750 kg per hectare to about 3,000 kg thanks to the high-quality seeds and training on oat planting provided by the company. 

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Herdsmen feed mares at a husbandry cooperative in Ulaanqab, the Inner Mongolia autonomous region. [Photo by Jiang Xueqing/China Daily]

A total of 1,087 poverty-stricken families enjoyed the same benefits amid a nationwide poverty-relief battle in China.

President Xi Jinping called for perseverance in the fight against poverty as time is limited for the country to meet its goal of eradicating extreme poverty by 2020. He made the remarks when deliberating with deputies from Gansu province at the second session of the 13th National People's Congress, China's national legislature, on March 7.

During an inspection tour in Chongqing in April, Xi said: "The battle against poverty has entered a decisive and critical stage. We must press ahead with our full strength and strongest resolve and never stop until a complete victory is secured."

Gao Sen, head of the government of Qahar Right Wing Middle Banner, said civil servants in the banner strictly implemented President Xi's instructions on poverty alleviation and development.

"Taking the tough battle against poverty as a major task and the most important project concerning the improvement of people's livelihoods, we pooled various resources and concentrated on poverty reduction," he said.

To make sure the poverty alleviation program works in Qahar Right Wing Middle Banner by spurring the development of the oats industry, Bank of Inner Mongolia formed a partnership with the local government and Ping An Property and Casualty Insurance.

The bank has provided a one-year working capital loan of 30 million yuan to Yinshan Oats for two years since 2018 at a lending rate of 6.25 percent. Meanwhile, the local government provided a security deposit worth 10 percent of the loan amount. The insurer issued a surety bond promising to repay the loan in the event of a default and offered the company an interest subsidy of about 2 million yuan a year.

The company used the interest subsidy to provide 40 metric tons of oat seeds, 650 tons of potato seeds, fertilizer and pesticides for free to 1,087 impoverished households last year.

"I was born and raised in Qahar Right Wing Middle Banner, an administrative division hit hard by poverty, and I wanted to do something for people in my hometown. The fight against poverty is a major agenda for China. Our company should make a contribution by promoting industry-based poverty alleviation," said Lu Wenbing, chairman of Yinshan Oats.

China's poverty-relief efforts are in the middle of a transition from making donations to helping poverty-stricken families expand their production capacity and make a profit.

In Guangyilong, a town in Ulaanqab, 300 impoverished families joined a husbandry cooperative. Each family bought a Mongolian mare at a price of 9,000 yuan, of which the family paid 3,000 yuan and the rest was paid by PICC Property and Casualty Co Ltd.

The families signed a three-year contract with the cooperative, entrusting it to raise their mares and extract serum from the animals when pregnant. During the term of the contract, the cooperative will pay each family 1,000 yuan a year in dividends and gain a profit from the serum, which is used in pig breeding.

At the end of the contract, the families own the mares and foals born to the mares belong to the cooperative.

As the current demand for the serum of pregnant mares is only 300 tons a year in China, the key to starting the business was finding a buyer. PICC introduced the cooperative to Ningbo Sansheng Pharmaceutical Co Ltd, which agreed to buy the serum after it passed the drug manufacturer's inspection.

"Apart from lifting 300 rural households out of poverty, we are looking forward to those families being able to buy more mares in three years' time and joining our cooperative as shareholders with their mares as assets," said Zhang Jinzhu, legal representative of the cooperative.

Its production capacity is expected to reach 15 tons in 2020. Considering that the income from pregnant mare serum may vary from 180,000 to 260,000 yuan per ton, it is estimated that the cooperative will make a profit of 700,000 to 800,000 yuan a year, he said.

"To reduce poverty through financial support, we must raise our political awareness and adhere to commercially sustainable lending. Financial institutions should promote intellectual development of impoverished families and invigorate them to make money, thus preventing them from relying heavily on government assistance," said Zhang Chunlin, president of the Agricultural Bank of China Inner Mongolia Branch.

With the help of financial institutions and the China Banking and Insurance Regulatory Commission, 192 impoverished families and the rural collective economic organization in Tumuertai town in Qahar Right Wing Rear Banner purchased a total of 292 Angus cattle for 4.69 million yuan, of which the regulator contributed 2.6 million yuan and Zheshang Jinhui Trust Co Ltd contributed 500,000 yuan. Ping An Insurance (Group) Co of China Ltd also donated 148,400 yuan to purchase insurance for the cattle.

The families and the rural collective economic organization signed an eight-year contract with Inner Mongolia Huoshanben Agriculture and Livestock Co Ltd, entrusting the company to raise their cattle. The company will pay dividends totaling 13,800 yuan per cow during this period and will return cattle of the same age and size as they were when bought by their owners when the contract expires.

The current market price for a fully grown Angus cow is more than 30,000 yuan, and it takes three years for a newborn calf to become ready for slaughter, said Sun Qi, general manager of the company.

Located in Daxi village of Tumuertai town, the project will also lead to a transition of the village's planting industry from growing grains to grass, in addition to providing 10 jobs to poverty-stricken families at a monthly salary of 2,500 yuan.