Seminar Series: Abstract

Franchising the State: Farmers, Agricultural Technicians and the Marketization of Agricultural Services
Dr Graeme Smith Research Associate - Contemporary China Centre, RSPAS, ANU

In contrast to many developing countries, China has enjoyed rapid growth in the total factor productivity of its agricultural sector (two percent growth for staple commodities over the period 1995 to 2005, between three and five percent for most horticulture and livestock commodities). Much of this increase has been attributed to successful state-led agricultural research, but the contribution of agricultural extension to this rise in productivity has been questioned. This paper explores the nuances of the apparent marketization of agricultural service provision in central China, drawing on surveys of farmers and agricultural technicians; interviews with officials, entrepreneurs, and researchers; and a case study of the Anhui-based agricultural supplies franchise. The picture which emerges is complex. Personnel and resources from a weakened part of the local state - the agricultural extension service- have been captured by this franchise. However, space for the development of entrepreneurship within this business model is constrained from both above and below. From below, as the franchise stores are located within rural townships, and must adapt to the local rules of the game, set by rent-seeking officials; and from above, as the company trades on strong connections with the Commerce Bureau to enhance its legitimacy as a franchise and attract subsidies from higher levels of government. These pressures are stymieing the development of a genuine franchise brand, and eroding the loyalty of franchisees.