How Can China's Agricultural Origin System Be Built by Market Means?
A few days ago, the Ministry of Commerce and other multiple departments jointly issued the "National Agricultural Product Market System Development Plan", proposing to initially build an agricultural product market system with Chinese characteristics by 2020.
The plan, based on factors such as China's regional economic and social conditions, transportation locations, population distribution, and agricultural product circulation foundations, combined with national strategic deployments such as the “Belt and Road” initiative, the Yangtze River Economic Belt, and the Beijing-Tianjin-Hebei coordinated development, as well as the distribution of major national commercial functional zones and advantageous agricultural product production and marketing areas, lays out about 100 national backbone agricultural product wholesale markets and 8 market clusters in areas concentrated in national agricultural product production, distribution, and consumption. Relying on the market clusters, it forms a “three vertical and three horizontal” national backbone network for agricultural product circulation, connecting with regional agricultural product circulation networks.
However, the above system still has deficiencies. Some industry insiders analyze that China's agricultural product market system covering urban and rural areas is still in the initial stage of development, with problems such as lack of overall planning for market development, unreasonable layout, low degree of organization and standardization, asymmetric market information, and lagging market system construction still existing. The plan may improve these. However, the “origin” link in the agricultural product market is still missing.
“In our existing top-level design and existing markets, the degree of attention to origin markets is relatively low. In the operation of existing wholesale markets, the existing market infrastructure and operating conditions are very unfavorable to farmers' marketing.” Zhang Hecheng, Director of the Market and Economic Information Department of the Ministry of Agriculture, previously stated publicly.
How to strengthen this link has become a common pursuit in the industry.
Origin System Construction
In fact, the central level has begun to strengthen the construction of the origin link and has successively launched a series of plans.
This year's Central Document No. 1, "Several Opinions on Increasing Reform and Innovation Efforts to Accelerate Agricultural Modernization", proposed “strengthening the construction of agricultural product origin markets and continuing to carry out pilot construction of public welfare agricultural product wholesale markets”. In June, the Ministry of Agriculture issued the "National Agricultural Product Origin Market Outline" and the "China Agricultural Product Wholesale Market Development Research Report", with the official position being “hoping to establish a farmer marketing service system with Chinese characteristics and further enhance China's agricultural product circulation capacity and efficiency”.
“Origin market construction is to first solve the problems of the ‘first mile’ and the ‘last mile’ of agricultural product sales. The ‘first mile’ means farmers are too far from the market, or circulation services are too far from production. Recently, the State Council specially proposed to vigorously develop producer services, because our circulation is too far from production, and the market is too far from farmers.” Zhang Hecheng said.
Even so, the problems encountered in the construction of agricultural product origin markets are still numerous. For example, the state's investment in origin markets is still relatively small, especially in some basic hardware construction, where the gap is large compared with countries such as Japan and South Korea. In the origin market construction of some of the above countries, government investment can reach more than 50%.
As for the most important grassroots administrative region and concept in China's agricultural production——the county level—the regional distribution of agricultural economic development is unbalanced. Some industry insiders believe that the county-level agricultural economic structure is unreasonable and lacks strategic adjustment of the economic structure. At the same time, because China's agricultural industrialization is still in its early stages, the value-added portion of agricultural products is mainly completed in cities, resulting in many farmers being unable to benefit directly.
“Previously, the most macro-level concept in related fields was called advantageous industrial belt construction, which was reflected in the ‘Eleventh Five-Year Plan’ and the ‘Twelfth Five-Year Plan’. All major production areas of various agricultural products were included in this major production belt. This plan uses counties as units. For example, pigs, broiler chickens, laying hens, dairy cows, beef cattle, and meat sheep are all included in the plan by county. Other agricultural products are also divided by major categories, and some can be specified down to a particular variety.” Professor Qiao Juan of the School of Economics and Management at China Agricultural University told the "China Industry and Economy News" reporter: “This division is relatively coarse. The Ministry of Agriculture divides them according to local statistical data, production scale over many years, and the amount of commodities provided. If an area enters an advantageous industrial belt, the Ministry of Agriculture or the national finance will provide related support projects.”
“After the state delineates advantageous industrial belts, each province and city actually has its own advantageous agricultural regions when carrying out agricultural development planning, and further divides them. Taking Beijing as an example, very few areas can enter the national advantageous industries, but Beijing's suburbs also have agriculture. Therefore, based on local conditions, Beijing's suburbs also delineate advantageous industrial belts and industrial zones from existing industries, and also carry out regional planning and regional layout according to the original industrial layout and future overall planning. When allocating this regional planning and regional layout, the funds allocated to each district and county are not completely equal.” Qiao Juan said: “When related policies are introduced, national finance will support and assist advantageous industrial zones. Non-advantageous industrial zones are funded by local governments, with relatively less funding from the central government.”
Lack of Evaluation System
At the same time, regarding evaluation at the origin level, the related system is still lacking.
“At present, China does not have a common, commonsense, national-standard origin standard. Currently, China's understanding of origin is based on several sources, including historical cognition, general experience, market effects, and natural conditions. The natural conditions point is relatively common and plain cognition, but from a scientific perspective, it is not complete.” Gao Haiyan, Vice President of Yimutian Group and Dean of the Research Institute, told the "China Industry and Economy News" reporter: “The judgment of a good origin must be viewed from multiple dimensions. For example, from a market-oriented perspective, it also includes multiple factors such as market efficiency, market cost, and customer recognition. It is not that having a good product necessarily means it is a good origin. Although some places have good natural conditions for origin, their productization capacity is not strong. Some products have relatively good quality, but related supporting facilities are relatively backward and lack surrounding services, resulting in excessively high marketization costs. Therefore, good service should become one of the standard connotations of a good marketized origin. But in the traditional value system or cognition, these factors are ignored.”
“In terms of origin, the government emphasizes grain bases, because the degree of self-sufficiency in agricultural products must be maintained at a certain level to ensure national food security.” Feng Xingyuan, a researcher at the Rural Development Institute of the Chinese Academy of Social Sciences and Deputy Secretary-General of the Small and Medium Bank Research Base, told the "China Industry and Economy News" reporter.
In fact, many scholars in the industry say that China's county-level economy has not raised its awareness of high-quality origins to a sufficient level.
“This field is relatively difficult for the government, from the central government to local governments. Not much attention is paid to it. The central government focuses on grain, the grain purchasing platform and purchasing policy. For areas included in advantageous industrial belts, there will be minimum protective price purchasing.” Qiao Juan said: “For other varieties, this connection is more reflected in market connection. Local governments have also had similar situations. County-level governments encourage the development of several advantageous varieties within the county. But if the back-end market cannot connect well, it will harm farmers' interests. Now local governments all understand that the market should be used to guide. In some regions, a certain industry becoming an advantageous industry does not mean that a county only focuses on one variety; it just has relatively greater influence. Its input amount is mainly affected by the market level, and local governments only do auxiliary work.”
As for origin information data serving the market level, it is difficult for the government to achieve effective connection with the market.
“Previously, the agricultural information system was actually relatively weak. There was no official monitoring data; more were reported statistical data. Based on these statistical data, layer-by-layer reporting from townships to cities and then to provinces was completed, thus selecting advantageous regions. The advantageous regions selected in this way are based on county-level statistical data.” Qiao Juan said.
“It is very difficult for the government to produce very large quantities of constantly updated real-time data, and failure may occur.” Feng Xingyuan said.
From the above information, it is not difficult to see that the micro market and the macro economy are disconnected, which can also be called “there is a lag”. Therefore, the market level is more suitable for establishing an origin evaluation system that conforms to market laws. In order to solve the above problems, the market level is looking for solutions. The booming e-commerce may bring opportunities.
A few days ago, the Yimutian Research Institute released the “China Good Origin” platform activity. The platform aims to find a group of counties that meet its evaluation standards and help China's agricultural counties enhance value.
It should be noted that the evaluation standards of origin are inseparable from specific products. Some scholars believe that origin types should be divided based on products.
“In a certain region, there are planting and breeding industries, and there are many product varieties. It may have a nationally recognized advantageous brand (such as Wuchang rice from Heilongjiang), which means the region is a good origin for that product. But this does not mean that all agricultural products in the region have advantages.” Qiao Juan said: “The types of agricultural products are very complex and closely related to resources and the environment. The evaluation of origin should still be classified by product.”