Internet Plus Agriculture Overturns the Traditional Agricultural Production and Operation Landscape
“Internet Plus Agriculture” is entering a golden period of accelerated transformation and innovative development. China's agriculture is small-scale farming, and in China's agricultural production and operation there have long existed problems such as insufficient standardization, low transaction efficiency, difficulty in achieving product traceability, and difficulty in increasing farmers' incomes. These problems are expected to be solved through the “Internet Plus” model, thereby bringing about a disruptive change to the traditional agricultural production and operation landscape.
Recently, the Information Office of the Ministry of Agriculture held a press conference, pointing out that accelerating the construction of a market system at production areas is an important task for promoting agricultural structural adjustment, transforming the agricultural development model, and advancing agricultural modernization. This year's Central Document No. 1, “Several Opinions on Increasing the Intensity of Reform and Innovation to Accelerate Agricultural Modernization,” also proposed “strengthening the construction of markets at agricultural product production areas. The frequent issuance of relevant policy documents aims to establish a farmer marketing service system with Chinese characteristics and further enhance the circulation capacity and efficiency of China's agricultural products.
The rapid development of the Internet is a process of redistributing the overall resources of society, which will bring lower costs and higher circulation efficiency. Driven by real demand and national policy, “Internet Plus Agriculture” will reshape every link in the agricultural industry chain.
Some industry experts point out that “Internet Plus Agriculture” is entering a golden period of accelerated transformation and innovative development. China's agriculture is small-scale farming, and in China's agricultural production and operation there have long existed problems such as insufficient standardization, low transaction efficiency, difficulty in achieving product traceability, and difficulty in increasing farmers' incomes. These problems are expected to be solved through the “Internet Plus” model, thereby bringing about a disruptive change to the traditional agricultural production and operation landscape.
The Internet Opens Up Agricultural Trading Models
It is understood that traditional agricultural product channels have many tiers, resulting in lower information transparency and low transaction efficiency. In this regard, Huo Xuexi, dean of the College of Economics and Management at Northwest A&F University and vice president of the China Agricultural Technical Economics Research Association, said in an interview with this newspaper that the flattening and transparency of Internet information correspond precisely to the characteristics of traditional agriculture, such as long industry chains and asymmetric information. The Internet can reduce credit risk and transaction costs between farmers and enterprises, bringing a flattened trading model and thereby changing the traditional industrial organization model of agriculture. “The problems brought by the traditional tiered wholesale model, such as high costs, logistics losses, and poor exchange of information, can be quickly solved through Internet technology,” he pointed out.
It can be said that Internet technology builds a trading platform for the sale of agricultural products, greatly shortening the distance between production and sales, reducing tiers, lowering costs, bringing a flattened trading model, and at the same time achieving full alignment between production and sales, greatly reducing the blindness of production and expanding the horizon of sales.
Mo Zihan, general manager of Fuzhou Minsheng Agricultural Technology Co., Ltd., strongly agrees with this. She said that Minsheng Company has already tasted the sweetness brought by the Internet. In recent years, Minsheng Company has used Internet technology to combine online and offline sales, reducing intermediate sales links and lowering operating costs. At the same time, through the collection and analysis of sales data via Internet technology, it has achieved production based on sales and early recovery of funds. This can not only reduce the business risks brought to enterprises by market fluctuations, but also reduce risks for farmers and increase farmers' incomes. “Internet technology has made it possible to transform traditional agriculture, which originally ‘depended on heaven for food,’ into modern contract farming,” she said.
According to Mo Zihan, Minsheng Technology is using Internet technology to achieve the integration of “Internet + agriculture + cross-industry.” In her view, only under the broader context of “Internet Plus” can these things become possible.
Nowadays, the impact of the Internet on traditional agricultural trading models is obvious to all. Relevant industry experts analyze and point out that at present, large agricultural product trading and distribution centers based on Internet technology and logistics distribution systems, and wholesale e-commerce trading platforms mainly for bulk transactions, will become the two main trading models for the perfect integration of the Internet and agriculture. Among them, large agricultural product trading and distribution centers will integrate multiple functions such as storage and transportation, wholesale, trading, and auction, and rely on Internet data to achieve real-time market trading; while the bulk consumption habits of agricultural products will inevitably give rise to more electronic trading platforms mainly for bulk transactions, such as Alibaba. These two trading models will change the traditional production and operation landscape of agriculture and greatly reduce agriculture-related operating costs.
Internet Big Data Enhances Market Forecasting Capability
In recent years, phenomena of unsalable fresh agricultural products and difficulty in buying at reasonable prices or selling have appeared in many places in China. On the one hand, “Jiang You Jun” (“General Ginger”), “Suan Ni Hen” (“Garlic You Fierce”), “Cong Ji Bo” (“Scallion Shockwave”), “Huo Jian Dan” (“Rocket Eggs”) and others have taken turns “entering the fray,” leaving consumers helplessly paying for high-priced agricultural products; on the other hand, phenomena of bumper harvests but poor sales of fruits, vegetables, and other agricultural products appear frequently. For example, in 2013, Hainan had a bumper lychee harvest, yet at 2 yuan per jin there were still few buyers; in 2014, Santan loquats in Shexian, Anhui, had a bumper harvest but piled up and were difficult to sell, and many loquats ripened and fell, returning to the soil. Agricultural products have bumper harvests but cannot be sold, and the strange cycle of “unsalable, difficult to sell, expensive to buy” appears repeatedly, making it difficult for farmers to increase incomes despite “bumper harvests.” The main reason analyzed is asymmetric production and sales information and untimely warnings. The massive data analysis brought by Internet big data will provide a way to solve the problems of agricultural products being “unsalable, difficult to sell, and expensive to buy” at the source.
An analyst at Essence Securities pointed out that the Internet's ability to integrate everything is accelerating the process of transforming traditional agriculture into modern agriculture. The steady increase in rural Internet users and Internet penetration has given the rural e-commerce market huge potential, and the total market size is expected to exceed 460 billion yuan in 2016. Such a huge total market space indicates the existence of massive data and information, which makes it possible to use vast agricultural Internet big data to predict market information.
Recently, the head of a vegetable cooperative in Tangshan told this newspaper about her experience of going online. This year, her cooperative used agricultural data provided on the domestic agricultural product trading information platform “Yimutian” to try growing organic cauliflower in 8 cold greenhouses. Unexpectedly, the market price at listing reached as high as 4.4 yuan per kg, with each greenhouse earning an average of 8,500 yuan and total income reaching as high as 68,000 yuan. According to the introduction, the cooperative began contact and cooperation with “Yimutian” in August last year. Based on the planting data provided by the “Yimutian” platform, it was predicted that greenhouse organic cauliflower in the Tangshan area would end in early May, and open-field cauliflower would come to market in late May, with a gap period of about 20 days in between. The cooperative seized this gap period to seize the market opportunity.
But agriculture is a high-risk, weak-quality industry, and natural factors affect the entire production process. Although Internet big data technology can provide strong support for forecasting the agricultural market and accelerating the circulation of agricultural products, in the face of the uncontrollability of natural risks, farmers may still be forced to breach contracts. When the responsibility for breach of contract is attributed by farmers to the negative factors of the Internet, it is hard to avoid breeding a mentality of resistance to the Internet, and the result may not exclude the emergence of “agriculture-Internet” opposition.
In this regard, Huo Xuexi said that the Internet system can promote the integration of resources in all aspects of agriculture and rural areas and benefit China's agriculture, but the Internet will also bring some problems to ordinary people, especially farmers, such as technical application problems and economic cost problems. At the same time, farmers' management level and risk management level for “Internet Plus Agriculture” still need to be improved.
“The integration of agriculture and the Internet is by no means simple addition, but rather, through industrial integration and innovation, using the strengths of the latest Internet industry to make up for the shortcomings of the most traditional agriculture, and even creating a completely new industrial model. Agricultural entrepreneurs must, on the basis of fully understanding their own strength, find the best entry point with the Internet and achieve their own upgrading,” Huo Xuexi pointed out.
“How far and how deep ‘Internet Plus Agriculture’ can go depends on people's degree of understanding and acceptance of the Internet. The degree to which we understand the Internet, reform, and liberate our thinking determines the degree to which China's agriculture develops,” Huo Xuexi emphasized again.