Li Yining proposes promoting the reform of the agricultural reclamation system from two levels

Using 4.5% of the nation's arable land area, it produces more than 7% of commercial grain; the agricultural reclamation economy has maintained a growth rate of more than 12% for 10 consecutive years; three major reclamation areas already have annual total operating revenue exceeding 100 billion yuan…… At the forefront of China's modern agriculture, how can China's agricultural reclamation better play the role of the “national team” of modern agriculture through deepening reform? At the recently held Fifth China Sustainable Development Forum for Poverty-Stricken Areas, renowned economist Li Yining said that in deepening institutional reform, agricultural reclamation should move toward marketization and corporatization, win through product quality and competitiveness, and grow into a vibrant economic entity.

This year's No. 1 Central Document clearly proposed accelerating the study and introduction of policies and measures to advance the reform and development of agricultural reclamation, deepening the reform of farm corporatization, reclamation area groupization, and equity diversification, and innovating the industry guidance and management system, the enterprise market-oriented operation system, and the farm operation and management system. It also proposed clarifying the ownership relationships of state-owned assets in agricultural reclamation and establishing a state-owned asset supervision system suited to the characteristics of agricultural reclamation. This pointed out the direction for the comprehensive reform of China's agricultural reclamation.

To this end, Li Yining suggested that a two-level state-owned capital management system for reclamation areas should be established as early as possible. The first level is to establish a state-owned asset investment company. The property rights of state-owned capital in the reclamation area must be clear. The state-owned capital investment company is the owner, or the representative of the owner, of the state-owned capital in the reclamation area. It is only responsible for preserving and increasing the value of state-owned assets, increasing or reducing holdings, and is only responsible for the allocation of state-owned capital, focusing on improving the efficiency of state-owned capital allocation, and is also only concerned with the profit and loss status of investments, not with specific agricultural reclamation business and operating activities. The second level is to establish a new agricultural reclamation enterprise group company. On the premise that the property rights of state-owned capital are clear and the state-owned asset investment company serves as the owner (or representative of the owner), the agricultural reclamation enterprise group company should be responsible to the state-owned capital investment company, because the capital comes from the state-owned capital investment company. The agricultural reclamation enterprise group company should establish a sound corporate governance structure and make it function normally.

“After the above reforms, the agricultural reclamation enterprise group company will become an independent market entity and will no longer be equivalent to the group company before reform. Its relationship with the government will be the same as that of other independent market entities: operating according to law, paying taxes and fees as required, providing products and services to society, and also contributing to public welfare undertakings and cultivating talent for society.” Li Yining said.

“This shows that deepening the reform of the agricultural reclamation system must shoulder two important missions: first, to make the state-owned capital investment company truly shoulder the task of properly using and managing state-owned capital; second, to make the agricultural reclamation enterprise group company an independent market entity, participate in market competition, increase its market share in competition, and establish its own brand.” Li Yining told reporters.

After restructuring, the agricultural reclamation enterprise group company should change the previous administrative management relationship between superior and subordinate companies and, in accordance with the modern enterprise system, establish a vertical corporate system of “group parent company—professional subsidiary—production base.” Subsidiaries should also have their own corporate governance structures and operate normally.

At present, enterprises in reclamation areas face the problem of insufficient capital. Li Yining said that after the establishment of the agricultural reclamation enterprise group company, both the parent company and subsidiaries must understand how to introduce capital, and through the introduction of capital, transform the parent company and subsidiaries into mixed-ownership enterprises; they must advance the employee shareholding system and the executive incentive shareholding system as early as possible, as these are effective measures that can both replenish company capital and stimulate the enthusiasm of employees and executives; they must accelerate the introduction of talent. After restructuring, from technological innovation to market development, from standardized management to changes in marketing methods, if talent is insufficient, enterprise development will be constrained.

Li Yining said that after transferring social functions to local governments, agricultural reclamation group companies should still care about the improvement and upgrading of social functions. This is because culture, education, health, transportation, medical care, telecommunications, and so on all directly affect the production and life of residents in reclamation areas and affect the improvement of residents' quality of life. To deepen the reform of the agricultural reclamation system, social security must be strengthened. It is necessary not only to strengthen social security coverage for employees, but also to expand the scope of social security so that people with farmer status who are not employees of the farm series are also included in the overall social security arrangements. At the same time, employees in the agricultural reclamation system who have so far not participated in social security should also be included in overall social security arrangements, and the level of social security for personnel throughout the agricultural reclamation system should be gradually raised.