What opportunities and challenges does agriculture going global face?
The theme of my speech at this year's annual conference is that Chinese agriculture should “go global”. Why should Chinese agriculture “go global”? Let me start with the reasons. Everyone knows that our country's agriculture has been growing for more than ten years, and none of you here feel that our country's grain supply will be a problem. But what everyone has not noticed is that, all of a sudden, foreign grain has entered China on a massive scale; never in the history of the Chinese nation has so much grain been imported. In 2012, while our country's grain output exceeded 1.1 trillion jin, our country imported more than 2 million tonnes of rice, more than 3 million tonnes of wheat, more than 4 million tonnes of corn, more than 4 million tonnes of cotton and 58 million tonnes of soybeans, importing a total of 80.25 million tonnes of grain. By 2013, imports of pork and beef were both increasing, along with more than 1 million tonnes of milk powder, and that is not even counting the milk powder that tourists bought back from travelling abroad. By last year, China's grain imports had reached 100 million tonnes.
If you ask about the reasons, first of all many people will say there is not enough grain to eat. Indeed, our country currently has 245,000 mu of cultivated land, yet it has to feed more than 1.3 billion people, so the cultivated land is stretched to the limit. The grain imported each year is now equivalent to the grain grown by foreigners on 700 million mu of land being fed to Chinese people. Second, we have grain in the warehouses but cannot sell it. The reason is that imported grain is actually cheaper than grain produced in China. The main reason is the shortage of rural labour in China; the rural population is mainly the elderly, women and children, labour productivity is very low, yet the price of labour keeps rising. In this way the pressure on a country will only grow greater and greater.
Based on this, I believe our agriculture must “go global”. China has so many entrepreneurs with abundant capital, and the state has sufficient foreign exchange reserves; nowadays when Chinese enterprises go abroad it is all financial investment, but I think our country has a very good historical opportunity in agriculture “going global”, and we should seize it firmly. I carried out a series of investigations. I went to Cambodia and found that the land on both banks of the Mekong River is flat and fertile, suitable for large-scale operation, with very high yields. Moreover, labour in Cambodia is very cheap. At the time I was working in Guangxi, and I seized this opportunity and led an enterprise to Cambodia to build a starch factory; the returns were very good, and it can be said to have been a very worthwhile investment.
After that I carried out a series of in-depth investigations and studies. Apart from Cambodia, the country most suitable for our agriculture to go into is Russia. Russia borders Heilongjiang, and the land along this national border is very fertile and also very large in area; it can be said to be a vast expanse of fertile fields, very suitable for mechanised farming and large-scale operation. The second country is Brazil, where the cost of land is very low, just a few dozen yuan per mu. The third place is Africa. Africa is rich in agricultural resources and also has great room for development. Developing agriculture in Africa is a friendly undertaking, and the cooperative relationship between the two sides will be very harmonious.
Finally, let me talk about the difficulties in agriculture “going global” and the problems that should be solved, and the policy measures the government should adopt from its perspective.
The first problem is that entrepreneurs are willing to “go global”, but do not understand the target country's national conditions, policies, customs and habits, and so on. For example, when I went to Cambodia, Cambodian officials said there was no problem investing there and the more land you buy the better, because all this land was lying empty with nobody using it. When Chinese enterprises developed it, they found that Chinese farmers were not allowed to go there to work, because Cambodia has to guarantee employment for local farmers. In China wages are paid once a month; in Cambodia that will not do, wages must be paid once a week. This is the difference in national conditions. Russia, Brazil, Africa and other countries and regions all have a series of legal and policy restrictions. So I hope the relevant state departments, especially the embassies and consulates abroad, can provide domestic enterprises with sufficient information and policy support.
The second problem is funding. Agriculture abroad is all large-scale operation, the land area is very large, and the cost of manpower and materials required is very high. Therefore, I hope domestic banks can introduce preferential policies and provide support measures such as loans and mortgage guarantees for agricultural enterprises going global.
The third problem is insurance. When enterprises farm land abroad, if they encounter natural disasters, there are insurance companies to settle claims and reduce the losses of agricultural enterprises. But our country's insurance companies, especially their foreign-related agricultural insurance business, still cannot keep up with demand.
The last problem is the lack of a corresponding reserve of foreign-related agricultural talent. “Going global” places higher demands on talent: in addition to the qualities that general enterprise management personnel should possess, they should master a foreign language, understand international rules and international conventions, and in particular be familiar with the industrial policies, tax policies, market potential, quality of labour, customs and habits of the target investment country that relate to the business project.
I believe that if all four of the above aspects can keep up, China will have a large number of enterprises and talented people going global to do agriculture.