Developing Various Forms of Moderate-Scale Operation, Driving the Transformation of Agricultural Development Mode

China's basic national condition is that it has a large population but little land, with the average land operated per household being only a little over 7 mu, and small-scale, dispersed household farming has long been the main mode of agricultural operation in China. This mode of agricultural operation is not conducive to the optimal allocation of resources or the effective improvement of labor productivity, and to a certain extent it has slowed the process of agricultural modernization. In recent years, as industrialization and urbanization have accelerated, more and more surplus agricultural labor has shifted to non-agricultural employment, creating conditions for moderately expanding the scale of agricultural operation and effectively raising labor productivity. Around the country, beneficial explorations of various forms of moderate-scale agricultural operation have been carried out, accumulating rich practical experience. In the long run, pushing agriculture to transform from traditional dispersed household operation to a new type of operating system combining intensification, specialization, organization and socialization is the inevitable path for China to build a strong modern agricultural nation. Recently, the General Office of the State Council issued the "Opinions on Accelerating the Transformation of the Agricultural Development Mode," once again emphasizing that to accelerate agricultural modernization at present and for a period to come, we must take the development of various forms of moderate-scale operation as the core and effectively transform the agricultural development mode.

I. Steadily carry out the work of confirming, registering and certifying rural land contractual management rights

Establishing and improving the system for registering and certifying land contractual management rights is important foundational work for stabilizing rural land contractual relations, promoting the transfer of land management rights, and developing moderate-scale operation. In February 2015, the Ministry of Agriculture and five other ministries and commissions issued the "Opinions on Doing a Good Job in Confirming, Registering and Certifying Rural Land Contractual Management Rights," adding 9 provinces (regions) including Jiangsu, Jiangxi and Hubei to carry out whole-province pilot programs, while other provinces expanded whole-county pilot programs. To date, 1988 counties have carried out confirmation and certification. All localities should, in accordance with the unified arrangements of the central government, firmly and effectively carry out the work of confirming, registering and certifying rural land contractual management rights, properly resolve problems such as inaccurate area and unclear boundaries of contracted plots, and encourage areas with the conditions, on the basis of confirming, registering and certifying contracted land, to explore quantifying contracted land as shares and distributing according to shares, so as to develop moderate-scale operation. At the same time, publicity should be strengthened regarding the work of confirming, registering and certifying rural land contractual management rights and policies on the transfer of rural land management rights, so that farmers fully understand the purpose, significance, role and procedural requirements of the confirmation, registration and certification work, fully give play to the principal role of the farmer masses, and raise farmers' awareness and ability to safeguard their land contracting rights and interests.

II. Develop various forms of moderate-scale operation

The 2015 No. 1 Central Document pointed out that we must uphold the principal position of farmer household operation, innovate methods of land transfer and scale operation, cultivate new types of operating entities such as specialized large households, family farms, farmer professional cooperatives and leading industrialized enterprises, and actively develop various forms of moderate-scale operation. Developing agricultural scale operation must be “moderate”; one must not blindly seek large scale or push it through by force. Nationwide, because natural and economic conditions such as agricultural resource endowments and farmers' employment and income structures vary greatly from place to place, it is impossible for there to be a one-size-fits-all standard for suitable land operation scale. Therefore, reasonably determining the land operation scale suited to local conditions must rely on exploration in practice by each locality. Judging from practice in many places, where the farming income from the land operation scale is equivalent to local wage income from secondary and tertiary industries, and where the land operation scale is equivalent to 10—15 times the local average contracted land area per household, this is relatively suited to the production needs of most areas and should be given key support. Not only are the suitable scale standards for agricultural operation in different places not uniform, but the forms of achieving agricultural scale operation must also be adapted to local conditions; all localities should, in light of reality, continuously explore and enrich effective forms suited to local development. Where conditions permit, according to farmers' wishes, cultivated land may be consolidated into contiguous tracts in a unified way, with the land quantified as shares and rights confirmed to households, and the operating income distributed according to shares. Farmers should be encouraged, on the premise of voluntariness, to solve the problem of fragmented contracted land by means of exchange and consolidation of plots. Contracted farmers should be encouraged, in accordance with law, to transfer contracted land by means such as subcontracting, leasing, exchange, assignment and shareholding. Areas with the conditions should formulate support policies to guide farmers to transfer contracted land on a long-term basis and promote their shift to employment. Farmers should be guided to join contracted land as shares to establish land share cooperatives, contracted farmers should be encouraged to carry out joint-household operation, and farmer cooperative federations should be guided into development, so as to expand the area of production and operation, solve problems such as land fragmentation and low output capacity, and promote intensive scale operation. Leading enterprises should be guided and encouraged to achieve scale operation with farmers or farmer cooperatives through methods such as “contract farming.” In recent years, some areas have explored agricultural land trusteeship to develop moderate-scale operation and achieved very good results. This operating model can, on the premise of adhering to the unchanged household contract operation system, provide farmers with pre-production, mid-production and post-production socialized services. It not only allows farmers to retain their land contracting rights but also to obtain more income than from land transfer; it not only saves production costs but also liberates rural labor; it not only opens up stable channels for farmers to increase income but also raises the per-unit yield benefits brought by scale production. It is an effective form for the transition from spontaneous agricultural land transfer to scale operation. Through land trusteeship services, the Shandong supply and marketing cooperative changed the previous scattered one-household-at-a-time operating model, implemented scale production, standardized planting and intensive operation, and brought more real benefits to farmers, making it very popular among the farmer masses. At present, the area under land trusteeship exceeds 10 million mu. Practice has proved that agricultural land trusteeship can better adapt to the new situation of agricultural land transfer, effectively avoid many disadvantages brought by administrative promotion of agricultural land transfer, has a solid mass foundation and a relatively broad scope of application, and is a down-to-earth form of achieving scale operation. Therefore, all localities should be encouraged to actively promote trusteeship service models that neither change household contractual relations nor leave the land untended. Large grain-growing households, large agricultural machinery households and agricultural machinery cooperatives should be encouraged to carry out full-process trusteeship or trusteeship of major production links, so as to achieve unified cultivation and develop moderate-scale operation.

⟦NL> III. Implement well the fiscal, credit and other support policies for moderate-scale operation

Recently, the Ministry of Finance formulated the "Opinions on Supporting Various Forms of Moderate-Scale Operation and Promoting the Transformation of the Agricultural Development Mode." Previously, the China Banking Regulatory Commission and the Ministry of Agriculture had already issued the "Guiding Opinions on Financial Support for Large-Scale Agricultural Production and Intensive Operation." Other relevant departments have also issued a series of support policies promoting moderate-scale agricultural operation. All localities should do a good job in implementing support policies and ensure that all effective measures are truly put in place. At present, policy implementation should focus on two aspects. First, accelerate the cultivation of new types of agricultural operating entities. In recent years, large numbers of various new types of agricultural operating entities have emerged around the country, powerfully driving the development of moderate-scale operation. By the end of 2014, there were 3.41 million specialized large households and family farms, 1.29 million cooperatives, and more than 120,000 leading enterprises nationwide. With the approval of the State Council, starting in 2015 the three subsidy policies - subsidies for improved crop varieties, direct subsidies to grain farmers and comprehensive subsidies for agricultural inputs (referred to as agriculture's “three subsidies”) - were adjusted and improved, to be coordinated for supporting moderate-scale grain operation, with priority tilted toward new types of operating entities such as large grain-growing households, family farms, farmer cooperatives and agricultural socialized service organizations. Finance departments at all levels should also increase support for farmer cooperatives, focusing on supporting the development of family farms of moderate scale that use family members as the main labor force, rely mainly on agriculture for income, and engage in specialized, intensive agricultural production. Pilot programs for financial leasing of large agricultural machinery should be encouraged, and innovative agricultural machinery credit services should be created, meeting the machinery purchase and use needs of moderate-scale operating entities through multiple channels and forms. Fiscal support-agriculture projects should be effectively connected with new types of operating entities, enabling them to participate more extensively and deeply in the construction, operation and management of such projects. Second, support and guide institutional and mechanism innovation conducive to moderate-scale operation. Steadily advance pilot programs for mortgage and guarantee of land management rights. Promote the establishment of county-level financing guarantee institutions mainly funded by the government and focusing on agricultural credit guarantee business, and accelerate the building of a nationwide agricultural credit guarantee service network. Actively promote the building of an inclusive financial service system, continue to give play to the guiding role of policies on targeted fee subsidies for rural financial institutions and rewards for increments in agriculture-related loans by county-level financial institutions, and encourage financial institutions to increase support for moderate-scale operation. Use methods such as loan interest subsidies, risk compensation, financing credit enhancement and venture capital funds to help moderate-scale operating entities broaden financing channels and reduce financing costs. Further improve the catastrophe risk diversification mechanism for agricultural insurance and effectively raise the level of risk protection for moderate-scale operation.

IV. Promote the development of agricultural socialized service organizations

Establishing and improving the agricultural socialized service system is an important aspect of building a modern agricultural operating system. The Third Plenary Session of the Seventeenth Central Committee proposed that we must “accelerate the building of a new type of agricultural socialized service system that relies on public service institutions, takes cooperative economic organizations as the foundation, leading enterprises as the backbone and other social forces as supplements, combines public-benefit services with commercial services, and coordinates specialized services with comprehensive services.” Practice has proved that raising the level of organization and scale through developing joint and cooperative relations among farming households and agricultural socialized services is also an effective form of achieving agricultural scale operation; moreover, the larger the scale of agricultural operation, the more it needs a sound socialized service system to match it. All localities should adopt measures such as fiscal support and credit support, implement relevant tax preferential policies, and accelerate the cultivation of various forms of commercial agricultural service organizations. Supporting qualified commercial service organizations in undertaking public-benefit agricultural services through methods such as government purchase of services can help farmers apply modern agricultural technology and equipment on limited cultivated land by purchasing agricultural socialized services, and is an effective means of improving the agricultural socialized service system. For example, some places have explored purchasing social services to encourage large agricultural machinery households, agricultural machinery cooperatives and other agricultural machinery service organizations to carry out socialized services such as cross-regional deep loosening and land preparation, and this has produced very good results. The 2015 No. 1 Central Document set out the clear requirement of adopting methods such as purchasing services to encourage and guide social forces to participate in public-benefit services. At present, the Ministry of Agriculture has organized pilot programs in some counties and cities for institutional innovation in government purchase of public-benefit agricultural services from commercial service organizations, supporting, through government ordering, targeted commissioning, rewards in place of subsidies, loan guarantees, bidding and other methods, commercial service organizations with certain qualifications to undertake public-benefit agricultural services that are quantifiable, easy to supervise and widely beneficial; exploring expansion of the scope of effective collateral for commercial service organizations and production and operation entities in pilot counties, raising credit limits and appropriately granting interest rate preferences; encouraging pilot counties to establish government-funded agricultural guarantee companies to provide loan guarantees for various commercial service organizations and production and operation entities. Localities should be encouraged to summarize and promote experience from pilot programs of fiscal support for full-process socialized agricultural production services and new types of agricultural socialized services, and promote the organization and unification of production and operation in areas such as seed and fertilizer supply, agricultural machinery operations, agricultural technology extension, production management and product sales, so as to improve the benefits of regional scale operation. Supply and marketing cooperatives have long been rooted in rural areas and close to farmers, have relatively sound organizational systems and operating networks, and have now established 340,000 comprehensive service agencies, giving them unique advantages in serving agriculture. Recently, the Central Committee of the Communist Party of China and the State Council issued the "Decision on Deepening the Comprehensive Reform of Supply and Marketing Cooperatives," pointing out that supply and marketing cooperatives should extend from circulation services to full-process agricultural socialized services, and focus on agricultural production services, agricultural product circulation services, integrated urban and rural community services and rural cooperative financial services to accelerate the building of a comprehensive, large-scale and sustainable service system for agriculture. All localities should further deepen the reform of supply and marketing cooperatives, adapt to the requirements of modern agricultural development, make great efforts to improve agricultural socialized service capacity, and turn supply and marketing cooperatives into cooperative economic organizations that truly meet farmers' needs.

V. Prudently carry out pilot programs for paid withdrawal from household contracted land

For some residents who have long settled in towns and cities and have stable employment, paid withdrawal from household contracted land may be explored in rural reform pilot areas, but this must be built on the basis of adhering to collective ownership of rural land and the full voluntariness of farmers. At the same time, it must be noted that at the present stage withdrawal from land contractual management rights must not be made a condition for farmers to settle in cities; whether farmers who settle in cities are willing to withdraw for compensation must be fully respected. In addition to farmers' subjective wishes, the process of paid withdrawal from household contracted land is closely related to the degree of improvement of the rural land system and the degree of progress in the citizenization of the agricultural transfer population and other economic and social development foundations. At present, farmers who are unwilling to give up agricultural operation because of their choice of lifestyle will exist for a long time, and on the whole the subjective and objective conditions for large-scale promotion of paid withdrawal from contracted land by farming households are not yet in place; therefore, this reform pilot must be carried out prudently and steadily within the scope of rural reform pilot areas.

In addition, in the process of developing various forms of moderate-scale operation, attention must be paid to properly handling the issue of industrial and commercial capital entering agriculture, and resolutely preventing “de-agriculturalization.” In recent years, in some places industrial and commercial capital has transferred rural land and then carried out non-agricultural construction, affecting cultivated land protection and grain production. For this reason, the Ministry of Agriculture, together with the Office of the Central Rural Work Leading Group and other departments, issued the "Opinions on Strengthening Supervision and Risk Prevention of Industrial and Commercial Capital Leasing Agricultural Land," making clear that land transfer and the development of scale operation must adhere to three bottom lines: the nature of public ownership of land must not be changed, the red line of cultivated land must not be breached, and farmers' interests must not be harmed; as for industrial and commercial capital entering agriculture, it is mainly encouraged, according to local resource endowments and industrial characteristics, to focus on developing capital- and technology-intensive industries, engage in agricultural product processing and circulation and agricultural socialized services, and develop improved seed and seedling breeding, high-standard facility agriculture, large-scale breeding and other modern planting and breeding operations suited to enterprise-style operation; regulation and management of industrial and commercial capital leasing agricultural land should be strengthened, the risk prevention mechanism for industrial and commercial capital leasing agricultural land should be improved, ongoing and ex post supervision of industrial and commercial capital leasing agricultural land should be strengthened, use control over leased agricultural land should be strengthened, and resolute measures should be taken to strictly prohibit the “de-agriculturalization” of cultivated land.