Wormwood industry promotes prosperity in Anhui province

Forty-seven-year-old impoverished farmer Lu Canbing and his wife have been busy growing wormwood recently in Zhugang village, Jianxi township, Mingguang city.

Mingguang is a county-level city under the jurisdiction of Chuzhou city, Anhui province. Located in an area that lies outside the Jianghuai watershed and having little rainfall throughout the year, it is arid and barren, which results in low and variable crop yields. The city also lacks industries with high economic benefits to boost its economy due to the poor conditions.  

The Mingguang Bureau of Agriculture and Rural Affairs officials conducted several rounds of research and investigations in Nanyang city, Henan province and Qichun county, Hubei province in order to learn how they have increased incomes in their borders by pursuing undertakings in the wormwood sector and develop characteristic industries in their jurisdiction.

In 2018, the Mingguang government began embarking on wormwood projects in its villages in order to reduce poverty and revitalize its rural area, and a model that involves “enterprises + farmer households + production bases” was implemented. Impoverished families began growing wormwood for leading companies under a made-to-order system.

An official working for the Mingguang Bureau of Agriculture and Rural Affairs mentioned that the government provides a yearly subsidy of 15,000 yuan (US$2,121) per ha to poverty-stricken households that grow wormwood in order to help them escape from poverty and increase their incomes.

A total of more than 50 wormwood cultivation bases covering some 2,533 ha of land now exist in towns such as Jianxi, Shiba, and Gupei across Mingguang. Five wormwood processing and sales companies, and more than a dozen cooperatives have been established. They have made it possible for 2,000 farmers to increase their incomes, including 800 who were impoverished. The wormwood industry has become a pillar of Mingguang’s economy and has helped its residents escape from poverty.

Higher yield and economic benefits

Farmer Xu Bing in Tieshan village, Shiba town, Mingguang, currently operates a wormwood cultivation base. He had been working in Guangdong province until he returned to his hometown in order to participate in a land transfer project that involved rice and wheat farming in 2012. The low yields that it produced gradually dispirited Xu, however. In 2019, Tieshan began to promote wormwood cultivation in its borders and organized study trips to Nanyang and other areas where wormwood is grown. Xu participated in the program and converted all of his 53.3 ha of land to wormwood production after he returned from an educational tour.

He was only able to harvest the crop three times in 2019, which is less than what is possible, because it was a dry year. He nevertheless achieved more than 15,000 kg of total output and 15,000 yuan (US$2,121) of net profit per ha over the course of the year.

Wormwood is a perennial herbaceous plant with fibrous roots that can benefit growers for several years. The roots that remain in the ground after a harvest later generate a new crop, which lowers costs and increases yields.

Xu explained: “This year, we will likely have much better yields, and costs will be lower. We should be able to reach at least 25,500 kg of total output and 30,000 yuan (US$4,241) of net profit per ha. The roots that are thinned out when they are dense enough can eventually be sold for 2,000 yuan (US$283) per ton to people who use them to grow their own crops.” He has recently leased dozens of hectares of land in order to expand his operation. 

A wormwood processing factory was established in Tieshan this year. Local resident Su Wanhe now earns more than 3,000 yuan (US$424) a month at the facility during the slack farming season. He stated: “The plant makes it possible for me to easily sell the wormwood that I grow and also provides me with extra work near my home.”

Adding value to wormwood

Liu Chengjiang, secretary-general of the Mingguang Wormwood Association, pointed out that it is very important to extend the industrial chain in order to develop the sector and benefit local farmers.

In 2019, the Mingguang government struck a deal with two enterprises involving the establishment of wormwood processing factories in the city, So far five small and medium-sized processing companies have been formed, more than ten cooperatives were created, and 21 households became major growers and were provided with support. These developments have extended the industrial chain and motivated farmers to grow the crop.

The aroma of wormwood tends to drift through the air pleasantly at Anhui Zhong’ai Industrial Co. Ltd., and trucks full of products made out of the herb leave the area on a regular basis. The merchandise that the company produces is becoming increasingly popular as people become more health conscious. Sales are booming, and supply often runs short.

“We add very high value to our wormwood products,” the company’s manager Si Wujun explained. “Moxa rolls sell for more than 200 yuan (US$28) per kg, and essential oil extracted from the plant sells for more than 3 million yuan (US$424,094) per ton. The herb can also be used to produce quilts, pillows, cushions, and similar items. A moxa quilt weighing a little more than two kg can sell for more than 2,000 yuan (US$283).” He noted that his facility can process the plant into more than 100 types of products in three categories, including medical and healthcare goods, daily items, such as toothpaste and liquid bath soap, and various types of bedding.

Ai’yuan Agricultural Science and Technology Co. Ltd. has established a factory in Mingguang’s Zhugang village to process dried wormwood leaves into moxa. The company’s person in charge Li Qiang explained: “We can produce one ton of moxa per day, and it sells for 60,000 yuan (US$8,478) per ton. Our high-quality material sells for more than 200 yuan (US$28) per kg.” He stated that the plant is not very difficult to process and that products have good sales prospects. Li also mentioned that he brought 40,000 yuan (US$5,652’s) worth of products to an agricultural fair in 2019 and they sold out very quickly.

“A few years ago, local farmers grew more wormwood than could be sold,” Zhugang Party Branch Secretary He Mianwu noted. He explained that the village eventually made an agreement with Ai’yuan involving the establishment of a factory in the village in order to address the situation. “The facility purchased all of the unsalable wormwood that had piled up in the last two years, and stock of the harvested plant disappeared from the area,” the Party chief continued. The official personally led the cultivation of more than 6.67 ha’s worth of wormwood last year. He concluded that wormwood farming has become more promising now that growers do not have to worry about having a market for their crop.

Integrating agriculture, industry, and the service sector to alleviate poverty

Tieshan Party Branch Secretary Sun Dashun mentioned that the wormwood industry benefits leading growers, increases incomes for village collectives, and ultimately benefits more farmers than previous endeavors did. More than a dozen major farmers currently grow wormwood on more than 173 out of the 1,667 ha of arable land in Tieshan.

Sun stated: “Major farmers are very enthusiastic about cultivating the crop. This year, it is expected to be grown on 467 to 533 ha of land.” He also mentioned that a warehouse had been built in Tieshan and that space is leased out to people and organizations that wish to store the crop. The arrangement results in more than 80,000 yuan (US$11,309) of income for the village, which is paid to local shareholders as dividends.

Seventy-year-old Tieshan resident Chen Shiqiang and his family were impoverished until relatively recently as a result of a serious illness that his son had. The growing wormwood industry in the area eventually brought hope and new opportunities for them, however. Chen’s family currently earns 20,000 yuan (US$2,827) to 30,000 yuan (US$4,241) a year, including more than 4,000 yuan (US$565) from leasing their land, 10,000 to 20,000 yuan (US$1,414 to US$2,827) from Chen and his wife working at the processing factory, and 2,000 to 3,000 yuan (US$283 to US$424) of dividends from the warehouse.

Liu Chengjiang believes that there is a lot of demand for healthcare products made out of wormwood. The Mingguang government plans to build a number of tourist towns, resorts, cultural streets, and themed hotels based on traditional Chinese medicine culture and the health tourism industry, which will make it possible for people to view and experience herb farming and rural ecotourism. The tertiary industry that is created by the characteristic wormwood-themed agricultural and rural tourism towns will help to make the wormwood industry larger and more robust.

Mingguang is currently accelerating the development of local e-commerce projects and trying to fully eradicate poverty in its borders. The municipal bureau of commerce has been helping local cooperatives implement a model that involves “e-commerce + a base (cooperative) + impoverished households.” The jobs that have become available in the area and the sales that are occurring online are providing new opportunities for the city’s impoverished citizens.

More than 50 poverty-stricken families have become members of Zhugang’s cooperative. They grow, process, and package wormwood, which has resulted in an additional 5,000 yuan (US$707) of income per person per year. Thirty of them are no longer impoverished as a result of their participation in the industry.