China Strives to Cultivate Its Own International Grain Giants
Faced with the monopolistic position of international agricultural oligopolies over transnational grain trade, China should give play to the leading role of state-owned agricultural enterprises and strive to cultivate its own international “grain giants.” The state farm system (nongken) possesses a complete modern agricultural industrial system and is the most realistic and most feasible vehicle for building international “grain giants.” In building international “grain giants,” the state farm system must firmly safeguard the grain output of its “big granaries,” must build a whole-industry-chain development model, and must strengthen the control capacity of its “grain giants.”
A few days ago, the Central Committee of the Communist Party of China and the State Council issued the "Opinions on Further Advancing the Reform and Development of the State Farm System." This is the first specialized document issued by the central government in 24 years to comprehensively guide the reform and development of the state farm system, fully reflecting the great importance the Party Central Committee and the State Council attach to the development of the state farm cause, and marking that the reform and development of the state farm system has been elevated to a major national strategy and a major measure for comprehensively deepening reform.
The state farm system (nongken) was established in a specific historical period in China to undertake important national missions. For more than 60 years, the state farm system has made major contributions to safeguarding national food security, supporting national construction and maintaining stability in the border regions. Data show that the state farm system currently has nearly 100 million mu of cultivated land, with a total grain output of 72 billion jin and a commodity rate as high as 90%.
At present, although China is already a major country in world grain production and import and export, its voice in the market is not strong. Faced with the monopolistic position of international agricultural oligopolies over transnational grain trade, China should give play to the leading role of state-owned agricultural enterprises and strive to cultivate its own international “grain giants.”
The state farm system possesses a complete modern agricultural industrial system and is the most realistic and most feasible vehicle for building international “grain giants.” According to estimates, if all cultivated land in the state farm system were built into high-standard farmland with guaranteed yields in both drought and flood, by 2020 the annual commercial grain produced on state farm land could reach 100 billion jin, enough to meet the one-year staple food needs of about 35% of the urban population.
The "Opinions" propose that the state farm system, with safeguarding national food security and the effective supply of important agricultural products at its core, and with advancing the reform toward reclamation-area groupization and farm enterprise-ization as its main line, should accelerate the transformation of its development mode, promote the integration of resources and assets and the optimization and upgrading of industries, build large bases, large enterprises and large industries of modern agriculture, comprehensively enhance the state farm system's internal driving force, development vitality and overall strength, effectively give play to its backbone and leading role in modern agricultural construction, and provide strong support for the coordinated advancement of new industrialization, informatization, urbanization and agricultural modernization. This has set a clear direction forward for the state farm system to build international “grain giants.”
China's national conditions and agricultural conditions determine that China's “grain giants” are fundamentally different from those of developed countries: they are neither an agricultural transnational corporation pursuing maximum profit nor a grain enterprise dumping surplus agricultural products abroad. China's “grain giants” should be producers that take grains as the core of production and operation and possess their own large bases, suppliers that safeguard the stability of the domestic market, leading enterprises that drive farmers toward the market, and market entities that steadily implement the “going global” strategy. The basic goal of cultivating international “grain giants” in the state farm system is to build modern agricultural industrial groups that are globalized, cover the whole industry chain, occupy the high end of industry and engage in capital operations, so as to hold the discourse power over resources, prices and profit distribution, and enhance production capacity, supply capacity and control capacity.
In building international “grain giants,” the state farm system must first firmly safeguard the grain output of its “big granaries.” It should focus on strengthening the construction of commercial production bases and build solid national grain strategic emergency bases. At the same time, it should integrate scientific and technological resources inside and outside the reclamation areas, explore the formation of scientific and technological innovation consortia for rice, seed industry and others, and form comprehensive platforms for agricultural scientific and technological innovation, technology integration and transformation and application with enterprises as the main body.
Second, it is necessary to build a whole-industry-chain development model. It should strengthen the construction of grain drying and storage facilities in the state farm system, enhance its post-harvest handling and primary processing capacity for grain, and promote the integrated development of the primary, secondary and tertiary industries. It should vigorously develop cold-chain logistics systems for fresh agricultural products and gradually establish and improve a nationwide circulation network for quality agricultural products from the state farm system. Using the agricultural product quality traceability system of the state farm system as a platform, it should build the China State Farm brand and construct a nationwide e-commerce platform.
⟦NL> Third, it is necessary to strengthen the control capacity of the state farm system's “grain giants.” It should advance industrialization, groupization and shareholding reform, improve the two-tier system of parent and subsidiary companies, and build an organizational framework for large agricultural transnational groups with state-owned farms as the basic operating units. It should strengthen the unified operation and management service functions of state-owned farms and form an agricultural operation interest community that combines unified and decentralized management. It should focus on advancing the agricultural operation model of “industrial company + state-owned farm + family farm,” promote the extension of the agricultural industry chain toward the high end, and form a vertically integrated agricultural operation system.