What Are the New Connotations of Agricultural Modernization? Read This One Article to Understand

[Guide] Marketization, branding and informatization are the three core elements of agricultural modernization. The marketization of agricultural products addresses issues such as market efficiency and farmers' income; branding enhances consumers' trust in the value of products; and informatization is an important pathway to achieving these goals.

In recent years, the marketization, branding and informatization of agriculture have made considerable progress. Under the new normal, marketization, branding and informatization have taken on new connotations, requiring us to reunderstand and reposition them, and to seek new pathways and means to drive development. See how Zhang Hecheng, Director of the Market and Economic Information Department of the Ministry of Agriculture, interprets the new three transformations.

Zhang Hecheng is Director of the Market and Economic Information Department of the Ministry of Agriculture

Reporter: At the Central Rural Work Conference held at the end of 2014, Premier Li Keqiang of the State Council delivered an important speech on accelerating agricultural modernization. Under the new circumstances, what significance do marketization, informatization and branding have for agricultural modernization?

Zhang Hecheng, Director of the Market and Economic Information Department of the Ministry of Agriculture:

China's economic growth is entering a new normal, with new characteristics in growth rate, structural adjustment and macroeconomic regulation policies: the new normal of growth rate, namely the normalization of a shift from high-speed growth to medium-to-high-speed growth; the new normal of structural adjustment, namely the normalization of a shift from rapid extensive development to structure-optimized development; and the new normal of macroeconomic policy, namely the normalization of stabilizing rather than stimulus policies. This is a scientific judgment and accurate decision on the current state of economic development made by the Party Central Committee after more than 30 years of high-speed growth followed by a slowdown.

As for agriculture, after “eleven consecutive increases” in grain production and “eleven consecutive years of rapid growth” in farmers' income, various risks and structural contradictions have also been accumulating and concentrating, facing the realistic challenge of “adjusting structure and transforming mode.” How to scientifically and rationally judge the future development of agriculture is an urgent task. The domestic and international prices of bulk agricultural products are comprehensively inverted, agricultural production profits are squeezed by the dual pressure of the price “ceiling” and the cost “floor,” and the traditional model of agricultural and farmers' income growth and previous government regulation policies also face new difficulties. This is the new normal facing China's agriculture.

The concept of agricultural modernization is not immutable but advances with the times. In the 1950s and 1960s, agricultural modernization was summarized as mechanization, electrification, water conservancy and chemicalization. These all served agriculture itself and were agricultural modernization in the traditional sense, or what could be called agricultural modernization in the narrow sense. Today's agricultural modernization cannot be judged by these alone, but rather requires consumers to genuinely recognize it. Only when consumers ultimately recognize it is modernization truly achieved. To understand agricultural modernization under the new normal, one should understand it from three aspects: marketization, branding and informatization.

First, marketization is the soul of agricultural modernization. If agriculture lacks a marketization mechanism, cannot let the invisible hand play a decisive role, lacks a supporting modern market system, and has not established modern supply-demand relationships, with production arranged by the government and growth driven by the government, then such agriculture can only be regarded as planned agriculture and traditional agriculture. Why did the Third Plenary Session of the 18th Central Committee place the decisive role of the market first? Because only the impetus from the market is the most fundamental driving force for promoting agricultural modernization.

Modern agriculture is not something recognized by leaders or the government, but is built on the foundation of a modern market system, an agriculture in which consumers can express their wishes through market choices. I believe that agricultural modernization without marketization as its soul is not agricultural modernization in the true sense.

Second, branding is the hallmark of agricultural modernization. Premier Li Keqiang is now our country's greatest salesman. What does he mainly sell? High-speed rail. As a major country in agricultural production and consumption, China will one day have its premier promoting our agricultural products just as he promotes high-speed rail. Han Changfu, Minister of Agriculture, has repeatedly emphasized the need to “strive to build a number of agricultural standardized production bases and well-known agricultural product brands.”

Branding is a process of value enhancement and an intangible asset, the core of which lies in being able to establish a stable consumer group and form a stable market share. Branding has a veto effect on modern agriculture. A brand symbolizes quality and represents the maturity of industrial development; therefore, branding is the core hallmark of agricultural modernization. Agriculture without brands cannot be considered modern agriculture.

Here I will also discuss the issue of brand creation. I believe four things must be done well in brand creation. First, the concept that brand strategy is a national strategy must be established. Brand strategy is a requirement of modern marketization. Competition in the agricultural product market has gradually moved from price competition and quality competition to brand competition. Therefore, the building of agricultural brands should be accelerated, research on agricultural product brand strategy should be carried out from aspects such as brand cultivation, support, publicity, supervision and protection, the thinking on agricultural brand development should be broadened, and the implementation of agricultural brand strategy should be advanced.

Second, a national agricultural brand catalog system should be established. National, provincial and local brand catalogs should be established, with brand influence and brand value as the two core measurement indicators. The indicator system of the brand catalog can be set by the government, but the scoring of brand influence and brand value is decided by consumers, which can be achieved through online evaluation.

Third, a national public brand development system should be established. Relying on national-level professional agricultural product markets, national famous-brand agricultural products should be promoted by region, by variety and by level, and regional public brands, product brands, enterprise brands and farmer brands of agricultural products should be built. Finally, national brands should be cultivated and shaped. Efforts should be made to cultivate and build agricultural product brands that can represent our country's characteristics, so that Chinese agricultural products truly go global.

Third, informatization is the commanding height of agricultural modernization. Modern agriculture contains two very important external elements: one is modern biotechnology, and the other is modern information technology. Modernization means combining these external elements with industry. Information technology is the representative of the most advanced technology today. General Secretary Xi Jinping pointed out that “without informatization, there is no modernization.”

Agricultural informatization integrates internet technology, smart devices and the like with the agricultural industry to achieve cost savings and efficiency gains, save land, labor, water, pesticides and chemical fertilizers, raise labor productivity and increase farmers' income. Therefore, agricultural informatization is the highest level of modern agriculture and the commanding height of modern agriculture. Only by achieving agricultural informatization can agricultural modernization be truly achieved. At present, China's comprehensive deepening of reform will bring huge institutional dividends to the development of agricultural informatization.

These do not contradict modernization in the traditional sense. The traditional viewpoint speaks of “modernization” in terms of production. We now step outside this to discuss agricultural modernization, reunderstanding and advancing agricultural modernization against the broader background of the new normal.

Achieving a state of tight balance in the agricultural product market is an important sign of the success of agricultural marketization reform, the goal of government macroeconomic regulation, and a test of the government's regulatory capacity.

Reporter: Agricultural marketization reform has always been an important part of agricultural and rural reform. How do you evaluate the process and building of agricultural marketization since reform and opening up, and how should the government act in the process of marketization?

Zhang Hecheng: Since the launch of marketization reform in the 1980s, China has formed an agricultural product market operation and management mechanism that is mainly market-regulated and supplemented by government regulation, which has played an important role in ensuring the effective supply of agricultural products and the smooth operation of the market. But looking at the process of agricultural marketization reform over more than 30 years of reform and opening up, it can be said to have “risen early but arrived late at the fair.”

Agriculture was the earliest field China opened up. The first contract of China's rural economic reform was signed in Xiaogang Village. Since then, China's agricultural marketization process has developed by leaps and bounds, the production mechanism for fresh agricultural products has gradually been activated, the circulation methods and trading models of agricultural products have gradually diversified, and a pattern of large markets and large circulation with wholesale markets as the main body has taken initial shape.

Over more than 30 years of reform and opening up, the process of agricultural marketization has in fact been a process of “letting go.” For the agricultural product market, we have let go of everything we could. Now, to achieve modernization in the true sense, a word must be added: “help.” The Third Plenary Session of the 18th Central Committee clearly proposed that the market should play a decisive role in resource allocation and the government should better play its role.

The government must “help” well, and the ways and methods of “helping” must be continuously learned and improved. For example, at present the state-owned system dominates grain and cotton procurement, and the government bears the main responsibility for grain and cotton procurement. The original intention of this practice is good, but in reality it has caused tight warehouse capacity and a heavy fiscal burden. So in the process of marketization, what standard should be established to measure whether the agricultural marketization system with Chinese characteristics is successful or not?