How Does Rural Industrial Integration Move Forward? New Types of Business Entities Do It This Way
New Types of Business Entities Can Drive Integration Like This
Promoting the integrated development of the primary, secondary and tertiary industries in rural areas requires mobilizing the enthusiasm of the vast number of traditional small farmers, and the role of new types of agricultural business entities should not be underestimated. Through new types of agricultural business entities driving the integrated development of the primary, secondary and tertiary industries in rural areas, it is possible to achieve cross-sectoral and intensive allocation of capital, technology and resource factors, enabling agricultural production, agricultural product processing and sales, catering, leisure and other rural service industries to develop in a coordinated manner, ultimately achieving extension of the rural agricultural industrial chain, expansion of the industrial scope and increased farmers' income.
Industrial integration can be divided into the industrial integration type, the industrial chain extension type, the industrial crossover type and the technology penetration type, etc.
Industrial Integration Type
Establish a Complete Agricultural Industrial Chain
Sub-industries such as crop farming, aquaculture and animal husbandry establish organic upstream and downstream linkages within or between business entities, improving the comprehensive utilization rate of resources. The ultimate goal is to establish a complete agricultural biological industrial chain of “resources - products - waste - renewable resources.”
Leading agricultural enterprises and farmers' professional cooperatives are the core forces that lead, guide and incentivize family farms to accept the concepts of this model and put them into practice; family farms fully understanding, implementing and carrying out the model is the foundation for its smooth operation; leading agricultural enterprises and cooperatives actively carrying out technological innovation and possessing independent intellectual property rights, and the technical support of research institutions such as research institutes and universities, building a new model of industrialization of scientific and technological achievements with business entity technological innovation as the main body and combining production, learning and research, is an indispensable guarantee.
Agricultural Industrial Chain Extension Type
Industrial Chain Extension Generates a Benefit Chain
The production and processing links of the agricultural industrial chain continuously extend forward and backward, and through managing each link of the industrial chain, a full traceability process is achieved with respect to product safety. Ultimately, through industrial chain extension, a benefit chain is generated, producing an amplifying effect of 1+1>2 in planting, breeding, processing, branding and service benefits.
On the one hand, leading agricultural enterprises play an important role in organizing and coordinating, providing technical guidance and controlling key processes in the production cooperation process among various interest entities; on the other hand, leading agricultural enterprises are closely connected with the market and undertake important functions such as researching market demand, product research and development, guiding industrial chain production and processing, establishing sales channels and carrying out agricultural product marketing activities; farmers' professional cooperatives and family farms, etc. are responsible for completing the front end of the industrial chain, such as planting and breeding, variety cultivation, efficient fattening, scientific harvesting, slaughtering and other key processes, and are important entities in agricultural product production, providing basic guarantees for industrial chain extension.
Industrial Crossover Type
Build a Multifunctional Industrial System
Guided by consumers' demand for rural leisure tourism and related experiences, and with the concept of tertiary industry linkage and crossover integration, build an industrial system spanning the primary, secondary and tertiary industries in rural areas and integrating production, living, experience and ecological functions. Ultimately, this drives the expansion of consumer demand related to the multifunctionality of agriculture, increasing the value-added links and space for agricultural development.
Leading agricultural enterprises play a main-force role in building sightseeing industrial parks, innovating agricultural production methods and developing comprehensive-function business tourism areas. At the same time, leading agricultural enterprises should also carefully study market and customer needs, carry out market research, carefully analyze customer sources, composition and consumption trends, establish customer information systems and customer feedback systems, and, guided by customer needs, develop personalized experience projects that are marketable, truly enhancing customer experience value. Farmers' professional cooperatives and family farms also play an important role in building agricultural leisure parks, developing distinctive agriculture and helping consumers achieve leisure, sightseeing, tasting, picking and other agricultural production experiences.
Technology Penetration Type
Provide Technical Support and Pathways
High and new technologies represented by modern biotechnology, information technology and aerospace technology penetrate and spread into the field of agricultural operations, blurring the boundaries between agriculture and the secondary and tertiary industries and giving rise to new business forms such as precision agriculture, space agriculture, information agriculture and molecular agriculture. Ultimately, agricultural production acquires “industry-like” industrial attributes, providing technical support and pathways for modern agricultural development.
Due to reasons such as capital, technology and talent of business entities, at the current stage the core entities in the penetration-type integration model are mainly leading enterprises with strong economic and technological strength, while family farms and professional cooperatives mainly play the roles of technology appliers, cooperators and service providers in the practice of this model.
Industrial Integration Needs to Break Through Traditional Methods
The integrated development of the primary, secondary and tertiary industries in rural areas refers to taking agriculture as the foundation and support, and by means of industrial penetration, industrial crossover and industrial restructuring, extending the agricultural industrial chain through the formation of new technologies, new business forms and new business models, expanding from the primary industry to the secondary and tertiary industries, and building agricultural industrial complexes and consortiums, thereby achieving the goals of agricultural modernization, integrated urban-rural development and increased farmers' income. The integration of the primary, secondary and tertiary industries in rural areas can adopt the method of forward integration based on agriculture toward agricultural product processing and rural services, such as setting up origin processing industries, establishing direct-sale stores for agricultural products and developing agricultural tourism; it can also adopt the method of reverse integration relying on rural services or agricultural product processing toward agriculture, such as relying on large supermarkets to establish agricultural product processing or raw material bases. Whichever method is adopted, it must be through the integrated development of the primary, secondary and tertiary industries in rural areas that new technologies, new business forms and new business models are formed.
The integrated development of the primary, secondary and tertiary industries in rural areas must break through traditional agricultural development methods. On the one hand, agriculture as the primary industry is an important foundation, and the development and growth of the secondary and tertiary industries must be built on the primary industry. On the other hand, the secondary industry, such as agricultural product processing and distinctive product development, in turn drives and promotes the development of planting and breeding in the primary industry and the catering, accommodation and leisure tourism industries in the tertiary industry. Conversely, without the development of the modern service industry and leisure tourism of the tertiary industry, planting and breeding and agricultural product processing would also lack staying power for development. In terms of industrial layout, agricultural product processing should be cultivated and supported as a related industry to achieve a breakthrough in agricultural product processing. (Zheng Fengtian Cui Haixing Cheng Yu)
Do You Choose Horizontal Broadening or Vertical Extension?
The integrated development of the primary, secondary and tertiary industries in rural areas includes not only agricultural industrialization but also a kind of horizontal agricultural industrial chain, and this horizontal industrial chain is conducive to greatly broadening the industrial development space of traditional agriculture. This horizontal broadening of the agricultural industrial chain is the fundamental reason why agriculture and related industries achieve organic integration, thereby increasing the added value of agricultural products and services. Therefore, if you want integrated development, you can choose horizontal broadening or vertical extension.
Vertical Extension Type Integration
Vertical extension type integration is market-oriented, relies on agricultural processing enterprises or cooperative economic organizations, takes the vast number of farming households as its foundation, and uses agricultural science and technology services as its means, linking the many links before, during and after production in the agricultural reproduction process into a complete agricultural industrial system, while also achieving vertically integrated operations of planting and breeding plus processing, production, supply and marketing, and agriculture, industry and commerce.
1. Vertical extension type integration of agriculture based on small family farms can be driven by different new types of business entities. That is, vertical extension type integration of agriculture based on small family farms can be divided into the leading enterprise-driven model, the cooperative organization-driven model and the government-driven model. The production-processing-sales vertical integration model driven by leading enterprises means that leading enterprises, on the basis of equality and mutual benefit, sign agricultural product purchase and sale contracts with farming households and farmers' professional cooperatives to form stable purchase and sale relationships. For enterprises, this model relatively stabilizes the scale of product production and better alleviates the problem of standardized production; for farming households, it greatly alleviates the risk problem of agricultural product market sales.
2. The production-processing-sales vertical integration development driven by spontaneous cooperative organizations mainly occurs in the integration process of agriculture and producer services. Agricultural producer services include multiple pre-production, in-production and post-production services such as agricultural material distribution, pesticide spraying and harvesting. Whether the production-processing-sales vertical integration development driven by spontaneous cooperative organizations succeeds depends on efficiency, and the specific efficiency depends on the internal organizational management status of the cooperative and the degree of suitability of the external environment. Because the individual farming households and farms that make up agricultural cooperatives have their own specific interests and behaviors, and the scale of small farmers is very small, the institutional organization cost is very large; in addition, China's farmers' cooperative tradition and cooperative concepts are far inferior to those of European and American farmers, so this institutional cost is very large.
3. The government-driven production-processing-sales vertical integration development model includes, first, production-processing-sales vertical integration development driven by specialized markets organized by the government. Second, local governments consciously promote the development of local brands, such as “one village, one product” and “one town, one product.” In a market economy, it is the market that plays a decisive role; therefore, the government-driven production-processing-sales vertical integration development model only plays an auxiliary role.
4. Vertical extension type integration of agriculture based on large-scale land transfer refers to the process of vertical integration from production to processing and sales generally being accompanied by “horizontal integration,” that is, organizing large-scale land transfer. This method is generally led by collective economic organizations, which rent farmers' contracted land and then lease it to other agricultural operators at a higher price; the agricultural operators then hire farming households to carry out production and operations. The main type of vertical extension type integration of agriculture based on large-scale land transfer is the “company + leased farm” model. This model internalizes agricultural product transactions, truly forming a seamless connection between small farmers and the large market, and achieving large-scale, standardized and commercialized modern agricultural production. This model has achieved good results in practice and has been welcomed by both enterprises and farmers.
Agricultural Multifunctional Expansion Type Integration
Agricultural multifunctional expansion type integration is achieved by expanding the functions of agriculture and rural areas, realizing the organic combination and complementarity of their production, living and ecological functions, and enriching the connotations of science and education, culture, art, participation and experience, forming agricultural multifunctional expansion type integration; the most important is the integration of agriculture and tourism. This kind of integration combines rural natural scenery, farmers' lifestyles and agricultural production methods with tourism, forming a new industrial business form——tourism agriculture, which can also be called leisure agriculture or sightseeing agriculture. Leisure agriculture can be divided, according to differences in operating entities, into the individual farming household type, the cooperative-driven type and the government-guided type.
1. The individual farming household type is mainly the farmstay operating model. Farmstay leisure tourism is a rural emerging industry developed in recent years in response to the new consumption trends of urban and rural residents, with “eating farm meals, staying in farm houses, touring farm scenery and enjoying farm life” as its main content, integrating leisure sightseeing tourism, experiencing rural customs and experiencing farming civilization. As an important type of leisure agricultural tourism, “farmstay” relies on rural natural ecology and environmental resources, rural activities and farmers' living resources, takes the original rural villages, residential buildings and rural culture as its carrier, and takes farmers' families as the basic reception unit. It is a leisure tourism method in which farmers provide modern urban people with a return to nature so as to gain physical and mental relaxation and spiritual pleasure, providing urban tourists with agricultural tourism projects whose main content is “eating farm meals, staying in farm houses, doing farm work and enjoying farm life.”
2. The cooperative-driven type means the local cooperative takes the lead, providing cooperative farmers with services such as agricultural product materials and technical training, guiding farmers toward large-scale operations while also being able to drive the development of local agricultural leisure tourism. The leisure agriculture development model with cooperatives as the main body can create a relatively large gap in scale compared with individual farming households, and on the basis of large areas of farmland and farms, it is more suitable for developing sightseeing and leisure agriculture.
⟧ 3. Leisure agriculture is a comprehensive economic phenomenon involving many industries such as agriculture, tourism and land, as well as related enterprises such as scenic areas, catering and travel agencies. There are no direct production relations or interest relations among them, and they are not restricted by other related industries and enterprises. Government-guided leisure agriculture development does not mean the government directly participates in the development and operation of leisure agriculture; rather, on the premise of allocating resources on a market basis, it scientifically exercises macroeconomic regulation, gives policy, legal and institutional support to the development of leisure agriculture, creates a good investment environment and development atmosphere, and regulates the behavior of market entities.