Abstract Smallholder farming has in China been viewed as a practice needing transformation. Its relationship with rural development and economic growth has been frequently analyzed in China. Government‐led initiatives promoting the integration of smallholder operations with industrialized agriculture have resulted in collaboration models between smallholders and large‐scale agribusiness. Circular agriculture understood as an agricultural practice that enhances economic and ecological sustainability represents one of the mechanisms through which such collaboration can take place. While this collaboration provides smallholders with opportunities for increased productivity and income, it also carries the risk of marginalization. This study examines the collaboration between agricultural capital and smallholders in southwest China focusing on an integrated pomelo planting and a pig breeding project. The varying interests and risks faced by smallholders, government agencies, agricultural cooperatives, private enterprises, and financial institutions are explored. Findings suggest that local governments play a key role in facilitating the introduction of capital and affording the initial costs of organizing smallholders, while agricultural cooperatives decoupling smallholders from capital are central to the operation of large‐scale production models. However, findings also show that local government involvement is often politically motivated, that smallholders' autonomy and voice in decision‐making are limited, and that a risk of exploiting their interests under the guise of institutional innovation remains. The viability of these collaboration models lies thus rather in its ability to attract new producers and create jobs particularly for returning migrants or local smallholders. The findings could offer a potential pathway for addressing the agricultural transformation challenges facing China.
Li et al. (Mon,) studied this question.