Engaging Smallholders in Flower Agribusiness for Inclusive Rural Development: The Case of Yunnan, China

Serious farmland scarcities make smallholders a default mode for China’s agriculture, which makes efficient and equitable rural development a great challenge. Tensions lead to alternation between autonomous family farming and coordinated collective agriculture. Rapid urbanization since the 1980s has strongly stimulated flower-growing and agribusiness in Yunnan, China. The organization for commercial flower-farming is, however, an issue. Officially promoted for collective farming, voluntary cooperatives are wrecked by the free-riding problem. Grower associations nevertheless spontaneously emerge, with the flexible entry and exit of members without binding joint-assets and joint-ownership, which is facilitated by technological changes to the transaction. Empirical investigation in Tonghai, Yunnan, unveiled the institution of agribusiness–smallholder partnership for inclusive rural development. Smallholders have actively participated in flower agriculture, which has contributed significantly to the development of rural economies. The high casualty of micro-smallholders suggests that farm size is an important and crucial factor for sustainable farming. Effective rural development has to be supported by endogenous non-agricultural jobs so that farm size can be increased