Agricultural industrialization releases greater energy through innovation
“In the past, I worried about selling on my own, could not keep up with the sales rhythm, and could not get a feel for the market's temper; now there is a cooperative that purchases in a unified way, or I sell to the company according to an order, which saves worry and effort and makes money!” The feelings of Chi Linguo, a large strawberry grower in Donggang City, Liaoning Province, represent the heartfelt sentiments of all farming households that have benefited from industrialized strawberry operations.
The Donggang strawberry industry is a microcosm of the rapid development of China's agricultural industrialization in recent years. Looking across the country, new forms of agricultural industrialized operations such as integration into “Internet+” are constantly emerging; leading enterprise operating models such as “use feed, get free breeding pigs” are constantly innovating; and new ideas for agricultural industrialized operations such as supporting farmers' land management rights as equity contributions are constantly being innovatively practiced……
Not only must enterprise financial statements look good, but farmers' pockets must also be fuller
⟦NL> Agricultural industrialized operations connect farmers on one end and the market on the other; the industrialization chain links bases, farmers, cooperatives, enterprises, markets and other entities in series, achieving efficient circulation of agricultural products, capital and other factors.
As of 2014, there were 354,200 various agricultural industrialization organizations nationwide and 125,500 agricultural industrialization leading enterprises, especially an increase in the number of large leading enterprises, with nearly 20,000 leading enterprises having annual sales revenue exceeding 100 million yuan and 70 reaching more than 10 billion yuan.
The financial statements of leading enterprises look good, but have farmers' incomes increased?
Data show that last year leading enterprises and other operating organizations radiated and drove 124 million farming households, and farming households participating in agricultural industrialized operations increased their annual per-household income by 3,234 yuan. Enterprises provided farming households with socialized services such as agricultural input supply, technical training, disease prevention and control, and market information, improving farmers' planting and breeding levels, expanding operating scale, and giving rise to a large number of specialized large households and family farms.
“Supporting the ‘leading’ enterprises is precisely for enriching farmers.” said Chen Xiaohua, Vice Minister of Agriculture. Solving the difficulties of agricultural enterprises and strengthening their strength is precisely enhancing their ability to drive agriculture and increase farmers' incomes.
At present, Anhui is building a new modern agricultural industrialized operation model with leading enterprises as the core, specialized large households and family farms as the foundation, and farmers' cooperatives as the link, integrating interest linkage, factor integration, mutual assistance and win-win cooperation, and joint development; Inner Mongolia has issued the “Opinions on Establishing and Improving the Interest Linkage Mechanism between Leading Enterprises and Farmers and Herdsmen.”
In order to establish an incentive mechanism guiding leading enterprises to connect with and drive farmers, and to give full play to the leveraging role of fiscal funds, in recent years the Ministry of Agriculture has given fiscal rewards and subsidies to leading enterprises for developing contract farming and providing guarantees for farmer loans. Data show that 33 national key leading enterprises purchased more than 600 million yuan of agricultural products from farmers through orders, helping more than 5,000 farming households obtain more than 900 million yuan in loans.
In addition, guiding the sharing, interconnection and mutual access of various factor resources within agricultural industrialization demonstration bases, and supporting the construction of public service platforms for quality testing, technology research and development, and logistics information, has cumulatively provided services equivalent to 15 million yuan to leading enterprises within demonstration bases, promoting cost reduction and efficiency improvement for enterprises.
Those engaged in agriculture and helping farmers must be supported; those illegally enclosing land in rural areas must be told “no”
Industry has 4.0, so how can industrial thinking be used to operate agriculture? The answer is that agriculture must also upgrade to 4.0. For this reason, the state encourages industrial and commercial capital to go to the countryside to engage in agricultural industrialized operations, but resolutely says “no” to behavior that uses the banner of agriculture to engage in “non-agricultural” operations and illegally encloses land.
In recent years, industrial and commercial capital investment in agriculture has accelerated, especially a batch of non-agricultural industrial and commercial capital from cities has poured in. According to statistics, in the original capital invested in modern agriculture in Wuhai City, Inner Mongolia, capital from industrial manufacturing, energy and minerals, real estate and other aspects accounted for about 56% of total investment.
There is also a batch of industrial and commercial capital that, under the guidance of local governments, actively develops agricultural industrialized operations, injecting advanced production factors and modern operating models into traditional agriculture. For example, Lenovo Jiawo Company uses its long-term technical advantages in the IT industry and applies technologies such as video surveillance and wireless transmission to build an agricultural Internet of Things system, realizing remote monitoring and full-process management of crop plant growth.
Under the new normal of the economy, localities encourage leading enterprises and others to strengthen business model and technology research and development innovation, and new forms and new business models of agricultural industrialized operations are constantly emerging.
In the “Internet+” era, agriculture certainly cannot be absent. A large batch of leading enterprises has tested the waters of e-commerce, opening stores and pavilions on well-known e-commerce platforms, and the surge in commodity sales has driven the rapid absorption of agricultural products in farmers' hands. Some leading enterprises have also actively innovated business models, such as Chengdu Juxing Agriculture and Animal Husbandry Technology Co., Ltd. launching the “use feed, get free breeding pigs” plan, with enterprise feed sales steadily increasing, farmers also receiving tangible benefits, and a “enterprise + farmer” win-win being achieved.
The state encourages leading enterprises and others to establish agricultural product raw material bases through self-building or orders, purchase, store, process and transform agricultural products nearby, and develop logistics distribution, chain operations, and farmer-supermarket docking, realizing the organic connection of agricultural product production, processing, sales and circulation.
In 2014, the ratio of sales revenue of key leading enterprises at or above the provincial level to the total procurement of major agricultural product raw materials reached 2.48:1.
Leading enterprises integrate and utilize advanced production factors such as capital, talent and technology, strengthen independent technological innovation, and develop new varieties, new technologies and new processes. In 2014, nearly 90% of national key leading enterprises had established specialized research and development centers. Yunnan Huahong Import and Export Company innovated flower processing and preservation technology and developed “everlasting fresh flowers” with a preservation period of up to 5 years, which are in short supply in the international market.
Industrial and commercial capital going to rural areas brings funds, technology, talent and advanced management concepts to rural areas, and has played a positive role in the development of agricultural modernization. But at the same time it has also produced a byproduct, namely the emergence of a tendency toward non-grain production and even non-agriculturalization. In the process of industrial and commercial capital going to the countryside, it is inevitably “a mix of good and bad”; some places blindly attract investment for political achievements, and even open green lights for some enterprises to engage in “non-agricultural” operations. These behaviors seriously threaten national food security, occupy precious cultivated land, and infringe on farmers' vital interests.
In response, the central authorities clearly proposed to explore the establishment of a strict access and supervision system for industrial and commercial enterprises leasing farmers' contracted cultivated land, encourage and guide urban industrial and commercial capital to go to rural areas to develop planting and breeding industries suitable for enterprise-based operations; increase support for grain production, encourage and support transferred land to be used for grain production, curb non-grain production, strictly prohibit non-agriculturalization, and absolutely not allow non-agricultural construction under the name of land transfer.
Explore “farmers' land management rights as equity contributions” and share the value-added returns of secondary and tertiary industries
“Promoting sustained increases in farmers' incomes is the fundamental starting point and foothold of developing agricultural industrialization. Under the new normal of the economy, farmers' household operating income, wage income, transfer income and property income all face challenges of varying degrees, and new channels for increasing income need to be opened up.” said Chen Xiaohua, Vice Minister of Agriculture. Developing agricultural industrialization means leading farmers to work, helping farmers sell, and achieving farmers' prosperity; it means finding income growth points for farmers in the primary, secondary and tertiary industries, and agricultural industrialization has shown a powerful source of momentum in the integrated development of the three industries.
In increasing household operating income, support leading enterprises to drive ordinary farming households and large-scale operating households to develop together, implement contract farming, carry out production-sales docking, and allow farmers to share the value-added income of the secondary and tertiary industries in the form of guaranteed-price purchases, premium purchases and secondary profit rebates; in increasing wage income, encourage leading enterprises to give priority to hiring local farmers, carry out skills training, cultivate high-quality farmers, and let them obtain the input effect of human capital spillover; in increasing property income, strengthen supervision of industrial and commercial capital leasing agricultural land and protect farmers' lawful rights and interests.
Guiding farmers to contribute land management rights, funds, technology, facilities and so on as equity to enterprises has become a fairly exploratory innovative practice at present.
At present, the Ministry of Agriculture has already carried out pilots in Heilongjiang, Zhejiang, Sichuan and other places. Farmers' cooperatives or leading enterprises in which farmers contribute equity with land contractual management rights are gradually increasing, and farmers, in the capacity of shareholders, can directly share the value-added achievements of the industrial chain. Chongqing Dongjiang Pig Breeding Company adopted a “guaranteed base + dividends” income distribution method and absorbed 23.24 mu of land from 26 local farming households as equity. In addition to guaranteed base income, each dividend was more than 1,000 yuan per mu each time, far higher than the rental income from directly leasing the land, exploring a realistic path for farmers to share value-added returns in processing, circulation and other links.
In addition to exploring and practicing farmers' land management rights as equity contributions, leading enterprises can also be guided to establish or lead farmers' cooperatives in the form of capital equity contributions, and farmers' cooperatives can be encouraged to establish leading enterprises, realizing deep integration of leading enterprises and farmers' cooperatives.
Engaging in planting and breeding industries is still the main source of farmers' income. To increase income, it is necessary to expand the scale of planting and breeding, and to expand the scale, it is necessary to increase capital investment, but farmers are often troubled by difficulty in obtaining loans and expensive loans. Agricultural enterprises suffer the same “fellow feeling”; difficulty in obtaining loans and expensive financing have become a “roadblock” for enterprises in driving agriculture and increasing farmers' incomes.
In response to the funding problem, at present Jiangxi and 6 other provinces have established agricultural industrialization guarantee companies with fiscal funds as capital contributions; Hebei and 11 other provinces have established guarantee companies led by leading enterprises to solve the problem of production capital shortages for farmers in bases. In addition, Jilin and other provinces are actively preparing agricultural industry fund companies to make direct investments in growth-oriented leading enterprises.
With leading enterprises strengthened and farmers enriched, only when enterprises do well can farmers who follow enterprises into the market live well. As the saying goes, “one chess piece activates the whole board”; the enhancement of enterprises' financial strength drives the vitality of the entire industrial chain and releases greater energy for driving agriculture and increasing farmers' incomes.