The nongken system consists of 1,785 state-owned farms in 34 relatively poor regions of 31 provinces. In total they occupy about 5 percent of arable land and sustain 13.5 million people. More than 3,000 SOEs holding over C¥750 bn in assets provide associated agricultural processing, distribution, and sales services. The nongken system is no longer sustainable. Farms are small, and ill-equipped to manage modern agricultural production, trade and distribution systems. They are weighed down by social provision responsibilities, unspecified and unsupervised state-owned assets, and are poorly run link