Agricultural Reclamation Reform Guidelines Approved by the Deep Reform Group, Related Policies to Be Refined
On the morning of October 13, Xi Jinping presided over the 17th meeting of the Central Leading Group for Comprehensively Deepening Reforms and delivered an important speech. The meeting reviewed and approved several documents, including the "Guidelines on Further Advancing the Reform and Development of Agricultural Reclamation." We believe that, following the relevant descriptions of agricultural reclamation reform in the 2015“No. 1 Document” and the Third Plenary Session of the 18th Central Committee, this policy has now been elevated to approval at a meeting of the Deep Reform Group, which shows the central government's high degree of attention to agricultural reclamation reform, and we cannot rule out the possibility that policy details disclosed later may exceed expectations.
At present, the problems in the agricultural reclamation system are prominent, and reform is imperative. The agricultural reclamation system is an enterprise management system created by China during a specific period. It bears many major social responsibilities, and management suffers from a confusion between government and enterprise functions. Specifically, the existing agricultural reclamation system has the following three prominent problems: (1) the relationship between government and enterprise is confused, and the burden of agricultural reclamation providing social functions is heavy; (2) market-oriented operation lags behind, restraining the operating efficiency of agricultural reclamation; (3) defects in the management system have caused serious losses in some agricultural reclamation enterprises.
⟦NL> We believe that this agricultural reclamation reform is expected to have a substantive impact on reclamation area enterprises in the following respects: (1) Injection of high-quality group assets. In accordance with the reform direction of“reclamation area groupization,” agricultural reclamation should separate government functions from operating assets, and in the future high-quality farms, enterprises, and other assets in the agricultural reclamation system are expected to be integrated and injected into listed company platforms. (2) Introduction of private capital to stimulate enterprise vitality. In accordance with the reform direction of“equity diversification,” reclamation area enterprises will attract private capital participation, improve management levels and operating efficiency, and stimulate the vitality of reclamation area enterprises. (3) Further advancement of marketization. In accordance with the reform direction of“farm enterpriseization,” land rent in reclamation areas will adopt market-based pricing, which will help unlock land profit potential and reflect the reasonable value of land. (4) Land capitalization. This agricultural reclamation reform policy does not rule out the possibility of delegating land ownership to the reclamation area level, releasing long-dormant land resources, helping agricultural reclamation land achieve capitalization through securitization, asset mortgages, trust transfers, and other methods, and will also promote the integration and injection of land assets in reclamation areas.
Key recommended targets: Beidahuang——the company and its group have abundant land assets, and will continue to advance equity diversification reform in the future; Nongfa Seed Industry——there are strong expectations for group asset injection, and in the future it is expected to become an integrator of land asset securitization.