Farmer innovation involves communication on both the vertical (between farmers and outsiders) and horizontal (among farmers) planes. When faced with barriers to vertical communication, small farmers in marginal areas have to depend on their own communication networks for knowledge diffusion and sharing. It leads to "farmer self-organizing innovation" (FSI) - an innovation process which is initiated, controlled and implemented by farmers themselves. This paper attempts to indicate: (1) what position the FSI has taken in innovation studies; (2) how farmers use and develop their communication network (FCN) for technology learning and innovation cooperation; and (3) what lessons and policy implications can be learnt from farmer innovation and self-organization. Based upon an integrated survey in Zhidan, a poor county of the Loess Plateau, itis argued that the innovative capacity of the rural poor in China might be difficult to strengthen unless more attention is paid to the promotion of farmer communication and cooperation. This paper also draws attention to the policy implications of promoting farmer innovation and building self-organizing networks in respect of rural sustainability in China in the 21 st ..C. entury.