The agro-processing industry is developing rapidly; going with the flow and seeking advantages while avoiding harm is key
Since entering the new century, China's agro-processing industry has developed rapidly. In 2014, the main business revenue of large-scale agro-processing industries nationwide under the broad statistical caliber exceeded 23 trillion yuan, and the agro-processing industry has become an important pillar industry and a livelihood industry. At present, China's economic development has entered a new normal, and the agro-processing industry is showing some new characteristics. We should grasp these trend-level changes, go with the flow and seek advantages while avoiding harm, further strengthen industry management and policy support, and continuously improve the development level and quality of the agro-processing industry.
⟦NL> Revenue growth is shifting gears, and the industry's development potential is huge. From 2000 to 2013, the main business revenue of large-scale agro-processing enterprises nationwide maintained double-digit growth. In the past two years, the growth rate has declined somewhat, at 13.8% and 8.2% in 2013 and 2014 respectively, which is consistent with the laws of industry development and changes in the macro situation. China has entered the mid-stage of industrialization, with an urbanization rate of 54.77%, and demand for processed agricultural products is strong. However, the ratio of agro-processing output value to agricultural output value, and the conversion rate of agricultural products, especially the deep-processing conversion rate, still lag considerably behind developed countries, indicating that China's agro-processing industry still has great development potential.
Total investment has grown against the trend, and backbone enterprises are rising rapidly. In recent years, the growth rate of fixed asset investment in China's agro-processing industry has been higher than the growth rate of fixed asset investment in society as a whole and in large-scale industry. Some backbone agro-processing enterprises have risen. At present, more than 50 agro-processing enterprises nationwide have annual sales revenue of over 10 billion yuan. In response to this situation, while supporting small and medium-sized processing enterprises, the government should lose no time in supporting the large, the excellent and the strong, and cultivate nationally competitive ethnic processing enterprises.
Spatial layout is accelerating its clustering, and the late-mover advantages of the central and western regions are emerging. China's agro-processing industry is concentrated in the suburbs of large cities, and in recent years it has shown three new trends: First, clustering toward major agricultural production areas. In 2014, the main business revenue of the agro-processing industry in Shandong, Jiangsu, Henan, Guangdong and Hubei provinces accounted for 46.9% of the national total. Second, clustering toward specialty product processing zones. For example, quick-frozen food in Henan accounts for about 60% of the national total. Third, clustering toward processing industrial parks. A number of agro-processing parks have been built, exercising centralized and standardized management over enterprises, which not only guarantees public services such as land, water and electricity use, but also saves costs such as infrastructure construction investment, and is also conducive to environmental protection, attracting more and more enterprises to enter. Industrial clustering is conducive to forming close cooperative relations between production and processing entities and service institutions such as logistics, monitoring and research and development, and promotes specialized division of labor and optimal allocation of resources. Fourth, the late-mover advantages of the central and western regions are emerging. Over the past 10 years, transport conditions in the central and western regions have improved substantially, and relying on advantages in raw material resources, the agro-processing industry has developed rapidly, with the share of main business revenue in the national total rising by 13.7 and 4.5 percentage points respectively.
Business concepts are accelerating their transformation, and the degree of integrated development is deepening. More and more agro-processing enterprises attach importance to building innovation capacity, embark on development paths that are deep-processing-oriented, green-oriented and scale-oriented, and adopt an integrated business model of high-quality agricultural product base construction, scientific research and development, production and processing, and marketing services. The degree of integrated development between the agro-processing industry and related industries is deepening. This is prominently manifested in three aspects: First, integration with raw material production. Most large-scale agro-processing enterprises have established agricultural product processing raw material production bases, controlling the safety of agricultural products from the source. Second, integration with scientific research institutions. Most large-scale agro-processing enterprises have established close cooperative relations with research institutes and academies, and research and development investment has increased year by year. Third, integration with e-commerce. Online sales models for agricultural products have prompted e-commerce players to compete for the market, and new marketing methods are constantly emerging. The integration of traditional supply chains with the internet has reduced intermediate costs, expanded the market radius and improved operating efficiency.
Emerging industries and traditional industries are developing together, and new growth points have appeared. With changes in dietary consumption, new growth points have appeared in the agro-processing industry. First, the development speed of the staple food processing industry (convenience food manufacturing) is noticeably higher than the average level of the processing industry. Second, the baking, candy and other nutritious leisure food processing industries are developing rapidly. Third, the healthy functional food processing industry, such as edible fungi, has become a new consumption hotspot. Fourth, revenue in agro-processing sub-industries is growing rapidly. In 2014, the main business revenue growth rate of four industries, namely egg processing, nutrition and health food manufacturing, quick-frozen food manufacturing, and rice and flour products manufacturing, exceeded 15%. New growth points in emerging industries and traditional industries inject strong momentum into the development of the processing industry and are important areas for tapping potential in the future.
Its position in economic and social development has risen, and its role in stabilizing growth and benefiting people's livelihoods has become prominent. The agro-processing industry is linked to agriculture and farmers on one end, and to industry and urban residents on the other. It has a high degree of industrial relevance, wide industry coverage and great value-added potential, and is a foundational, pillar and strategic industry of the national economy. For more than the past 10 years, the share of China's total agro-processing output value in industry has remained basically stable at around 16%, and its tax contribution to fiscal revenue has remained basically stable at around 10%, making important contributions to national economic development and meeting people's living needs. The ratio of China's agro-processing to agricultural output value has risen from 1.7:1 in 2010 to 2.1:1 in 2014, effectively driving agricultural development and promoting the building of modern agriculture. The raw grain consumed by the processing industry each year is more than twice the amount of policy-based grain reserves in the country, easing the pressure on agricultural product sales. As a labor-intensive industry, the agro-processing industry has made outstanding contributions to employment and farmers' income growth. Since 2012, in addition to a large amount of seasonal employment, the annual number of employees in large-scale agro-processing industries nationwide has remained above 25 million, with employment increasing by an average of 4.4% per year over the past 10 years.
The pace of foreign investment entry is accelerating, and ethnic processing enterprises are being impacted. Vigorous domestic market demand is the fundamental reason for the sustained and rapid development of China's agro-processing industry, and it is also the trigger for the accelerated pace of foreign investment entry. At present, in many fields such as grain and oil, livestock products, and food and beverages in China, foreign capital has, to varying degrees, seized the right to speak in the domestic market. While promoting the development of related industries, the entry of foreign capital has also caused no small impact on ethnic agro-processing enterprises. Agro-processing involves the national economy and people's livelihood. The catalog of encouraged and restricted foreign investment entry should be formulated and improved in accordance with international rules, dynamic tracking and monitoring should be strengthened, ethnic enterprises should be encouraged to become bigger and stronger, foreign monopoly should be prevented, and the safety of the agro-processing industry and food safety should be safeguarded.