New changes in key agricultural support projects for 2016, revealed in a Ministry of Finance document
Agricultural industrialization will receive key financial support in the future.
On November 17, the Ministry of Finance issued the "Guiding Opinions on Supporting Agriculture's Advantageous and Characteristic Industries through Comprehensive Agricultural Development to Promote Agricultural Industrialization" (hereinafter referred to as the "Opinions"). The "Opinions" proposed striving to, within 3 years, initially form across the country a hundred regional agricultural advantageous and characteristic industrial clusters with relatively large resource advantages, long industrial chains, integrated development of the primary, secondary and tertiary industries, and strong demonstration and driving effects.
⟦NL> Li Guoxiang, a researcher at the Rural Development Institute of the Chinese Academy of Social Sciences, told the Daily Economic News reporter that agricultural industrialization can solve phenomena such as excessive supply of low-quality agricultural products in the agricultural product market, improper use of agricultural resources and factor allocation, and excessively high agricultural production costs, which cause agricultural output to increase without corresponding income growth.
Encouraging the development of "Internet + Agriculture"
2015 was again a bumper harvest year, but corn and wheat prices in major grain-producing areas all fell to varying degrees. Corn prices fell significantly, with farmers' prices falling by more than 20% on average, and the largest decline reaching 30% compared with last year, while wheat also experienced a round of decline before National Day.
Some estimates say that the sharp drop in grain prices in 2015 may have led to negative income growth in the hundreds of billions, which reflects the current situation in our country where agricultural output increases without corresponding income growth.
Li Guoxiang analyzed that the production cost of agricultural products in our country remains high, and the comparative benefit of agriculture is relatively low. The agricultural product market has an excessive supply of low-quality agricultural products, improper use of agricultural resources and factor allocation, and excessively high agricultural production costs, causing agricultural output to increase without corresponding income growth.
Against this background, agricultural industrialization is a necessary way out. The "Opinions" hold that under the new situation of rising agricultural production costs and intensifying hard constraints on resources and the environment, there is an urgent need to strengthen the role of comprehensive agricultural development in supporting industrialization development, so as to achieve improved agricultural quality and efficiency and sustained increases in farmers' incomes.
The support content mainly revolves around improving the industrial chain of agricultural advantageous and characteristic industries, specifically including: in planting, seedling breeding, standardized planting bases, agricultural product storage and preservation, and waste processing and utilization; in breeding, breeding of breeding livestock and poultry (including aquatic products), standardized breeding bases, livestock and poultry (including aquatic products) trading venues, forage planting, feed processing, harmless treatment of manure, and organic fertilizer processing.
In addition to traditional agricultural fields, the Daily Economic News reporter noted that processing bases, raw material warehousing, finished product storage and preservation, cold-chain logistics, and origin wholesale markets involved in processing and circulation industries are also key support areas. At the same time, the Ministry of Finance will also encourage the development of "Internet + Agriculture" and actively support the construction of e-commerce platforms for advantageous and characteristic agricultural products.
Li Guoxiang said that the key to realizing agricultural industrialization lies in the active participation of multiple agricultural market entities such as enterprises, farmers and their organizations, with leading organizations as the dominant force, extending the supply chain, and by building mechanisms for benefit sharing and risk sharing, organically linking different agricultural industrial segments into a whole to obtain value appreciation and high added value.
As for the method of financial fund support, the "Opinions" emphasize giving full play to the guiding and leveraging role of financial funds on financial capital and social capital, adjusting and improving the support methods of financial funds for agricultural advantageous and characteristic industries, and gradually forming a diversified support system mainly based on loan interest subsidies, supplemented by financial subsidies, and coexisting with multiple forms such as financial equity investment funds.
Financial commentator Li Wenhai told the Daily Economic News reporter that in the past, financial support was mainly based on tax incentives, financial subsidies, and project support, which made pre-evaluation, in-process supervision, and post-event accountability for supported enterprises extremely complicated and bred a large amount of rent-seeking space, while mainly using loan interest subsidies can effectively avoid this problem, and the scope of support will also become larger.
Key support for advantageous and characteristic industries
According to the "Opinions", the key industries supported financially will mainly be those included in the "National Comprehensive Agricultural Development Support Plan for Agricultural Advantageous and Characteristic Industries". Provincial agricultural development institutions are encouraged to determine about 10 key agricultural advantageous and characteristic industries within their regions. County-level agricultural development institutions shall, in principle, select the best options within the scope of the region's agricultural advantageous and characteristic industries.
The Ministry of Finance requires that, for agricultural advantageous and characteristic industries within the region, key links and weak links in the industrial chain be accurately identified for key support and continuous support, to build a complete industrial chain and make the regional agricultural advantageous and characteristic industries bigger and stronger.
The "Opinions" state that limited comprehensive agricultural development financial funds should be concentrated on supporting regional agricultural advantageous and characteristic industries, to solve the problems of projects being small and scattered and benefits being low, fully give play to the effects of industrial agglomeration in saving costs, promoting innovation, and stimulating economic growth, and improve the efficiency of the use of comprehensive agricultural development financial funds.
The advantage of industrial clusters lies in obtaining more value appreciation and high added value. For example, in the first half of the year, 10 agricultural industrial clusters in Shangrao City, Jiangxi, had sales revenue of 4.536 billion yuan, a year-on-year increase of 12.31%; they drove 84,000 farmer households, with an average income increase of 3,600 yuan per household. The growth of agricultural industrial clusters promoted the vigorous rise of new agricultural business entities. In the first half of the year, the city had 6,255 farmers' cooperatives, an increase of 421.
Regarding the timetable, starting from 2016, comprehensive agricultural development industrialization operation projects will focus on supporting regional agricultural advantageous and characteristic industries. For advantageous and characteristic industries included in the priority support scope of comprehensive agricultural development, key support and continuous support will be provided.
The "Opinions" also state that efforts should be made to, within 3 years, initially form 1~2 advantageous and characteristic industries in each comprehensive agricultural development county, form about 10 in each province as a unit, and initially form across the country a hundred regional agricultural advantageous and characteristic industrial clusters with relatively large resource advantages, long industrial chains, integrated development of the primary, secondary and tertiary industries, and strong demonstration and driving effects.
"The development plan for agricultural industrialization must also avoid overcapacity." Li Wenhai said that just like steel and cement, if all northern provinces go in for apples, the result will inevitably be falling product prices, thinning corporate profits, and large stockpiles of agricultural products. In particular, industrialization also requires a period of time to cultivate, and it is not so easy to "turn around," so the issue of differentiation among regions should be noted in advance.
The Ministry of Finance also mentioned that, according to market changes and development trends, a dynamic management mechanism will be established for the advantageous and characteristic industries to be supported, to improve the precision of industrial support.
In terms of restraint mechanisms, the National Agricultural Comprehensive Development Office will incorporate the progress of each province in supporting agricultural advantageous and characteristic industries into the comprehensive assessment scope for the management work of provincial agricultural development institutions. For provinces with high work enthusiasm and obvious results in the development of advantageous and characteristic industries, preference will be given in fund allocation in the next planning cycle.