Learning to plant for profit in China. Farmers find out the hard way that free-market system has its risks

There are big risks for peasant farmers who sell in Canton's free markets. One week tiny red peppers can sell for seven yuan per jin ($2.50 a pound), and the next week the market can be flooded and the price reduced to one or two yuan (35 to 70 cents).

``When I came here for the first time last year, I could make a profit of 10 fen per jin [a little over three cents a pound],'' said Wang Zhongren, a farmer from Gansu Province who was selling dangsheng root, a popular medicinal herb. ``But the news got out and now it's very difficult to turn a profit.''

For the peasant farmers who come to Canton's Li Wan market from every province in China, the teeming alleyways and stalls offer prospects of high profits as well as big losses. Conversations with the farmers-turned-salesmen show that the impact of China's agricultural reforms begun six years ago will reverberate through the Chinese peasantry for many years to come.

The practical task for those farmers producing cash crops is learning what to produce, where to sell it, and for how much. These are the lessons the Communist Party has urged them to learn, though probably few of them understand the party's high-sounding words on the subject.

``The most important task is to bring a coordinated change in our ideological and working style while rural production is shifting to the orbit of a commodity [market] economy. . . . We must learn how to swim in the great ocean of the commodity economy!'' said a commentary on agricultural reform in the People's Daily earlier this year.

The realities of the situation are at once more mundane and less obscure than the party's rhetoric. The sights and sounds of the Li Wan market -- the largest of nine such markets in Canton -- define the very place where farmers are learning to ``swim.''

Take Mr. Wang, for instance. Last year he adjusted his planting to take advantage of the high profits he then could make on dangsheng. This year he shipped to Canton more than two tons of the dirty brown roots from Gansu, more than 1,000 miles to the northwest.

But after several weeks, all of it was still sitting in the warehouse unsold. At least a dozen other farmers in Gansu had also heard about the opportunities and now there is a surplus, he explained.

Nearby, a row of melancholy farmers from Hebei Province leaned against a stone wall behind mounds of little red peppers.

Before the economic reforms, they might have been members of a commune who shared in the ``big pot'' system, in which each person was provided for regardless of his work. But now they were all competitors, each trying to raise enough cash for the long trip home and the next planting.

One family of five had spent two days on the train, each one hauling a large sack of peppers, only to meet other farmers from their province doing the same thing. They told a story similar to Mr. Wang's -- supply exceeded demand and the price for peppers was at rock bottom.

The Li Wan market has for sale ordinary fruits and vegetables, as well as meat, seafood, and poultry. But it specializes in the herbs and medicines popular among southern Chinese and in a bizarre assortment of live animals that find their way onto Cantonese dinner tables -- cats, turtles, fruit-eating foxes, and owls. The sad-looking creatures sit in cages waiting for customers.

``The Li Wan market is nationally known for its brisk business,'' said Pan Chihuai, a retired military officer who spent his naval career doing political work in China's South China Sea fleet.

``This was the first place farmers could sell traditional Chinese herbs, beginning in 1979. Now we do business worth over 120,000 yuan [$42,000 a day], one-third of which is in herbs.'' Mr. Pan was employed two years ago by the Canton government to run the market. His work requires licensing and supervising some 2,000 sales stands along the narrow, covered walkways. He has taken it upon himself to teach a few farmers ``to swim in the great ocean'' of the marketplace.

Since 1979, all prices in the market have been negotiable, and Pan's office has recently begun a monthly mailing of market information to farmers, listing prices of common commodities.

He also helps farmers dispose of surplus crops.

``If a farmer approaches us, we can play the middleman and try to find a buyer,'' he said.

Earlier this summer, farmers from Shandong Province in northern China sent Pan samples of their surplus peanut crop. He was able to locate a foreign trading company that bought 1,000 tons for export.

``We got them a good price at 95 fen per jin [34 cents a pound],'' he said.

Pan said he hadn't heard about Wang's two tons of unsold dangsheng, but he knew there was a surplus.

``Send him to me,'' he said agreeably, but added that it was difficult to find a market for such specialty items with the Hong Kong traders, who often buy surplus production.