Law-based support injects momentum into seed industry development
On April 24, after the "Draft Amendment to the Seed Law of the People's Republic of China" was submitted to the 14th session of the Standing Committee of the 12th National People's Congress for deliberation, the draft amendment to the Seed Law was made public to solicit opinions and suggestions from the whole of society. A new chapter on “support policies” was added. Strengthening support for the seed industry is determined by the industrial position and development stage of our country's seed industry. Raising policies to the level of legal provisions is a continuation and reinforcement of support policies, and will make support more solid in implementation and deeper in its roots.
The industrial position and development stage of the seed industry determine that support must be strengthened
The crop seed industry is a national strategic, foundational, and core industry, and is fundamental to promoting the long-term stable development of agriculture and safeguarding national food security. To ensure that the rice bowl of the Chinese people is firmly held in their own hands, the seeds must be tightly gripped in our own hands. As the most basic agricultural production input, seeds in our country have reached a coverage rate of improved varieties of more than 95%, and their contribution rate to agricultural yield increases has reached more than 40%. Especially at a time when resource constraints are increasing and the yield-increasing effect of inputs such as chemical fertilizers is declining, the promotion of improved varieties is of even greater significance for increasing yields.
However, our country's seed industry market is still in the initial stage of development, and it has been only a little more than ten years since it entered the market-oriented stage. Market concentration is relatively low, and seed enterprises are generally small in scale. The trade volume of the top 10 “integration of breeding, propagation, and promotion” seed enterprises in our country accounts for 13% of the total domestic trade volume, while the trade volume of the world's top 10 seed enterprises accounts for 35% of the world's total trade volume, and the trade volume of the top 20 seed enterprises in the United States accounts for 70% of that country's trade volume.
From the perspective of different crops, our country's rice, wheat, cotton, rapeseed, and other varieties have relatively strong international competitiveness, while there is a relatively large gap with developed countries in corn, soybean, and some vegetable varieties. As the place of origin of rice and the birthplace of hybrid rice, our country has first-mover advantages in germplasm resources, technology, and other aspects, and domestic varieties are mainly used in production. Wheat variety breeding and research and development in our country is mainly based on conventional breeding, and it occupies a relatively advantageous position, with wheat production mainly using domestic varieties. However, at present, the per-mu yield of corn in our country is only about 400 kg, a gap of nearly 300 kg with the United States. Our country is the place of origin of soybean, with an average per-mu yield of 116.7 kg, while the global average per-mu yield is 165 kg, and the United States is 177 kg. Our country is a major vegetable-producing country in the world, with vegetable planting area and output accounting for 42.8% and 51.7% of the world respectively, but foreign high-end vegetable varieties occupy an important market share, especially high-end varieties suitable for protected cultivation, and the value of imported seeds accounts for more than 70% of the national seed market value.
Foreign-funded varieties are entering our country with strong momentum. The corn variety “Xianyu 335” from Pioneer Hi-Bred International, Inc. of the United States has become one of the main corn varieties planted in our country. Our country imports about 15,000 tons of seeds each year, mainly vegetable seeds, as well as some sunflower seeds and beet seeds. Imported tomato seeds account for less than 10%, and peppers account for about more than 15%. However, the prices of foreign seeds are generally several times or even dozens of times higher than domestic seeds. Although the proportion of imported vegetable seeds in total seed use is not large, foreign seeds, while extracting excess profits, increase the production costs and operational risks of domestic farmers. Taking tomatoes as an example, when using foreign varieties, the seed cost per mu is about 1,000 yuan more than when using domestic varieties. According to calculations by experts from the Shandong Provincial Vegetable Research Institute, imported seeds in Shandong Province account for about 20% of total seed use, but their seed market value has already exceeded the market value of domestic seeds, which account for 80% of seed use.
Whether considered from the position of the seed industry or from its stage of development, legal and policy guarantees are still needed to provide support for the seed industry in multiple ways.
Raising support policies to legal provisions reflects the continuity of support for the seed industry
In recent years, the state has issued a series of support policies and measures to accelerate seed industry development in areas such as industrial policy, financial support guarantees, scientific and technological investment, tax incentives, agricultural insurance, credit support, and talent cultivation. Incorporating these mature and feasible support policies and measures that have been tested in practice into the law, standardizing and systematizing them, and fixing them in legal form is the development and continuation of our country's seed industry support policies.
In 1989, the State Council promulgated the Regulations on Seed Management, regulating seed production and operation; in 2000, the National People's Congress promulgated the Seed Law, fully opening the seed market and starting the process of seed industry marketization. Especially in recent years, multiple documents and measures to strengthen the seed industry have been issued consecutively, and the density and value of state support measures for seed industry development are unprecedented.
In 2011, the State Council issued the "Opinions on Accelerating the Development of the Modern Crop Seed Industry", for the first time clearly defining the crop seed industry as a national strategic and foundational core industry and enterprises as the main body of modern seed industry development, opening a new journey for modern seed industry development; in 2012, the General Office of the State Council issued the "National Plan for the Development of the Modern Crop Seed Industry (2012-2020)", mapping out the blueprint for the future development of the seed industry; in 2013, the General Office of the State Council issued the "Opinions on Deepening the Reform of the Seed Industry System and Improving Innovation Capacity", further clarifying policies for deepening the reform of the seed industry system and proposing the goal of building a strong seed industry nation.
The Ministry of Agriculture also revised the "Measures for the Administration of Crop Seed Production and Operation Licenses" to encourage enterprises to accelerate mergers and acquisitions and become bigger and stronger; revised the "Measures for the Approval of Major Crop Varieties" to open a green channel for variety approval for qualified integrated breeding, propagation, and promotion enterprises; included seed machinery in agricultural machinery purchase subsidies and implemented subsidies for seed machinery. The Ministry of Finance, together with the Agricultural Development Bank of China and Sinochem Group, contributed 1.5 billion yuan to establish the Modern Seed Industry Development Fund to support enterprise mergers and acquisitions; the Ministry of Finance, together with the State Taxation Administration, reduced or exempted corporate income tax for integrated breeding, propagation, and promotion enterprises to support enterprises in increasing research and development investment; the National Development and Reform Commission established a special project for biological breeding, with cumulative investment of 472 million yuan to support 41 enterprises in improving breeding capacity; the Ministry of Agriculture arranged 500 million yuan in special funds for the seed project to support the construction of crop germplasm resource nurseries, variety regional trial stations, testing centers, improved seed propagation, and scientific research and breeding innovation bases; the Ministry of Finance included 38 national-level major seed production counties in the reward scope for major grain-producing counties, with more than 200 million yuan in newly added fiscal reward funds, etc.
While the state has increased support, localities have also continuously strengthened support for the seed industry. Since the full text of Document No. 8 was issued, support policies have been introduced one after another across regions. Jilin implements 50 million yuan each year to establish a provincial seed industry development fund; Liaoning has invested a total of 110 million yuan from various parties to establish the Liaoning Dongya Modern Seed Industry Research and Development Center relying on industry-university-research institutions; Shandong has arranged 160 million yuan to support seed industry development and established a modern seed industry development fund of 372 million yuan; Hunan, Hubei, and Zhejiang have added 90 million yuan in special funds to support improved variety research and integrated breeding, propagation, and promotion cultivation projects; Sichuan has arranged 535 million yuan in special funds for basic scientific and technological research to support higher education institutions and research institutes in strengthening basic public-interest research, core technology research and development, and accelerating the cultivation of innovative talent, etc.
Support policies have taken root, and law-based support for seeds will make the roots go deeper
The draft provides comprehensive provisions on how to support enterprises. Vice Minister of Agriculture Yu Xinrong said: “We must further increase investment in enterprises, support enterprises in further improving their capabilities in scientific research, production, management, services, and other aspects, narrow the gap with multinational seed enterprises as soon as possible, and promote enterprise restructuring in the seed industry. We must not only build 2-3 seed industry ‘aircraft carriers’, but also accelerate the cultivation of specialized and service-oriented enterprises. Our goal is that through efforts, by 2020 the concentration of the top 50 enterprises should reach more than 60%, and we must strive for Chinese seed enterprises to have stronger competitiveness among international seed enterprises.”
“Opportunity, seize the opportunity.” Li Jijun, general manager of Henan Qiule Seed Industry, told reporters, “Many of the company's major reform decisions have seized national policies and support opportunities.” Qiule Seed Industry contributed funds and joined with other domestic seed companies to establish a major corn scientific research and breeding platform——Zhongyu Jin Marker Biotechnology Co., Ltd., decoupled from the Henan Academy of Agricultural Sciences, established the Henan Qiule Seed Industry Science Research Institute directly under the company, promoted the company's listing on the “New Third Board”, built a “green channel” rapid approval platform for new corn varieties, and participated in national major scientific research collaborative projects on corn and soybean.
The Modern Seed Industry Development Fund, as an innovative support method, has begun to show results. “While we look for investment targets, some enterprises also actively come to us to discuss funding needs.” said Zhu Shunquan, chairman of the Modern Seed Industry Development Fund. On June 16, the Modern Seed Industry Development Fund signed a strategic cooperation agreement with Jiangsu Zhongjiang Seed Industry Co., Ltd. Zhongjiang Seed Industry was one of the enterprises that actively came to discuss. “Through targeted additional issuance, the enterprise has sufficient funds and can better strengthen breeding research and development work.” said Jiang Hongyun, general manager of Zhongjiang Seed Industry Co., Ltd. As of now, the Modern Seed Industry Fund has invested in 15 projects, with an investment scale of 670 million yuan, leveraging 760 million yuan in fiscal capital and jointly gathering more than 6.9 billion yuan in other social capital.
⟦NL> The draft provides that the state supports insurance institutions in carrying out seed production insurance. People's governments at or above the provincial level shall adopt measures such as insurance premium subsidies to support the development of seed industry production insurance. Sichuan has already piloted seed production insurance. Ding Shengyu, a hybrid rice seed production farmer in Zitong Village, Yonghe Town, An County, Mianyang City, was originally most worried that continuous rainy weather during the flowering period would lead to large-scale yield reductions. At the end of 2014, Mianyang launched hybrid rice seed production insurance, and “seed production insurance cleared away farmers' concerns.” Li Weiping, head of the Mianyang City Seed Management Station, introduced that the cost of hybrid rice seed production in Mianyang is about 2,000 yuan per mu. Calculated at a premium rate of 5%, the premium is 100 yuan/mu, of which the municipal finance bears 40%, the county-level finance bears 20%, seed production enterprises pay 20%, and farmers bear 20%.
Seed industry support policies have taken root. Continuing support policies, strengthening seed industry entities' expectations for policies, enhancing confidence in seed industry development, and promoting good support policies into law will improve support efficiency and release more development momentum through law-based support for seeds.