Top-level design for Internet Plus Agriculture takes shape, development path gradually becomes clear
Since Premier Li Keqiang of the State Council proposed “Internet Plus” during this year’s “Two Sessions,” “Internet Plus” has become the focal point of economic and social development. On May 15, the Ministry of Commerce launched the “Internet Plus Circulation Action Plan.” On June 24, the State Council issued the “Guiding Opinions on Internet Plus Action,” which explicitly designated 11 key areas for Internet Plus, with modern agriculture ranking third, right after entrepreneurship and innovation and collaborative manufacturing. The Ministry of Agriculture and other ministries will also roll out Internet Plus action plans for related sectors in the near future. Agriculture, an industry that seems the most ancient and traditional and the farthest from the Internet, will undergo fission and rebirth as it becomes connected through the Internet. Agriculture, being the farthest from the Internet, is indeed the hardest sector to add the Internet to, yet it may become a transformation with the greatest room for imagination, and because of its particular characteristics, agriculture may also restructure the connection logic of Internet Plus in the consumer goods sector.
China’s agricultural modernization has achieved tremendous success, but various risks and structural contradictions are also accumulating. On June 30, at the “Path and Transformation of Internet Plus Agriculture” forum, Wang Xiaobing, Deputy Director of the Market and Economic Information Department of the Ministry of Agriculture, stated that China’s agricultural development faces both a “ceiling” on agricultural product prices and a “floor” on costs. Unlike foreign farmers who take the “lion’s share” of agricultural product profits, the profits of Chinese agricultural products are absorbed and dissipated through each level of the distribution channel. At the same time, the cost of agricultural production is rising year by year, and the problem of unsold agricultural products occurs frequently. More urgent than bringing e-commerce to villages and households is solving the problem of getting agricultural products out of the villages.
According to data from the National Bureau of Statistics, from January to May, national online retail sales of physical goods grew by 38.5% year-on-year, 28.1 percentage points higher than the growth rate of total retail sales of consumer goods during the same period. Online shopping for general consumer goods has already reached scale and formed a system, and whether large platforms or vertical sectors, each has gradually formed its own leading enterprises. However, although e-commerce for agricultural products started relatively early, it is far from producing large enterprises, forming a large scale, or solving the profit dilemma.
Industry insiders say this is constrained by the special attributes of agricultural products, such as low premium rates and high logistics costs. Therefore, the traditional business logic of Internet Plus in the consumer goods sector needs adjustment. Gao Haiyan, Dean of the Yimutian Research Institute, believes that the B2C model is not suitable for getting agricultural products out of villages at the current stage, and that the best way to increase the average order value is B2B. Unlike the consumer goods sector’s progression from B2C to B2B, Internet Plus agricultural products needs to directly enter the B2B model.
As for farmers among the “three rural issues,” the previous approach of educating netizens cannot be applied either. “The Internet Plus farmer approach is not advisable at the current stage; Internet Plus farmer organizations should be chosen instead.” Dang Guoying, a professor at the Chinese Academy of Social Sciences, pointed out that the scale effects of agricultural cooperatives can solve many problems. The Netherlands has roughly just a few cooperatives nationwide, but China has over a million agricultural cooperatives, large in number but small in scale. How China’s cooperatives can find innovative mechanisms for cooperation with farmers in the process of connecting with the Internet is something that needs to be considered.
In addition, farmers’ sensitivity to technology, Internet awareness, and ability to enter the market structure are relatively weak, which is a form of inclusive education that the state needs to promote. It is reported that from 2014 to the present, the Ministry of Agriculture has established 3,700 village-level agricultural information service stations, solving the “last kilometer” problem of services through information entering villages and households. This year, these agricultural information service stations will be rolled out nationwide, providing farmers with public welfare services and convenience services.
On May 8, the State Council issued the “Eight National E-commerce Measures,” and the central government will allocate 2 billion yuan in special funds for rural e-commerce infrastructure construction. It is reported that the first draft of the “Guiding Opinions on Accelerating the Development of Rural E-commerce,” involving more than twenty ministries and commissions including the Ministry of Commerce, has been completed. The State Council also explicitly proposed adding broadband access to 14,000 administrative villages this year, implementing fiber-to-the-village construction in 10,000 administrative villages, and ensuring over 95% of administrative villages have fixed or mobile broadband access; in the next two years, over 80% of administrative villages will achieve fiber-to-the-village.
The grand blueprint for Internet Plus Agriculture has already unfolded, but as the sector most lagging in informatization, the work needs to start from the most basic step of getting connected. From the most basic step of getting agricultural products out of villages, to the informatization of rural services and farmers’ lives, and finally to the IoT-ization of agricultural production, the path of Internet Plus in the “three rural issues” will gradually become clear through practice.