The sixth industry promotes the integrated value-added development of agriculture, letting farmers share in the added value
At present, China's agricultural production is under the double squeeze of a constantly rising cost “floor” and a constantly pressing-down price “ceiling”, and farmers earn limited profits from growing grain alone. It is necessary to promote the integrated development of the primary, secondary and tertiary industries, so that farmers can enjoy the value-added of the entire industry chain, and only then can the competitiveness of China's agriculture continuously improve——
When you travel to some countries, you will find that the truly livable places there are not big cities full of high-rise buildings, but the countryside. However, agriculture in these rural areas is no longer traditional agriculture, but a “sixth industry” that integrates the primary, secondary and tertiary industries, a new type of economic structure that combines agriculture's production, living and ecological functions in one.
This year's No. 1 Central Document proposed advancing the integrated development of rural primary, secondary and tertiary industries. Over the past few months, the “sixth industry” has been heating up across the country. How should the “sixth industry” be understood? And how should the “sixth industry” be developed?
The “sixth industry” yields many benefits
Picking loquat fruit, admiring lily flowers, gathering fresh red bayberries, tasting farmhouse meals…… Since the beginning of summer, every day citizens have streamed to Zhongxishan Village, Tengtian Town, Yongfeng County, Jiangxi Province, experiencing the rare pleasures of rural life. Zhongxishan Village is a well-known local specialized village for lily and fruit cultivation. After cement roads were built and farmhouse restaurants were opened, it became a good place for many city dwellers to relax on holidays.
“After ordinary fruit is harvested, if farmers sell it directly at the edge of the field, it is only a few yuan per jin; if it is processed into juice and sold, the profit doubles; and if it is branded, organically grown or traceable in quality, its value rises greatly. In the season when melons and fruits are fragrant, city people come to the orchard to enjoy the scenery, pick fruit and eat farmhouse dishes, and farmers' incomes become even more different.” said Yuan Gexia, deputy director of the Yongfeng County Agriculture Bureau. Agriculture's “linking with the second and third industries” has broadened the channels for farmers to increase income. Last year, the county's per capita net income of farmers exceeded 10,000 yuan for the first time.
Yongfeng County's agriculture “linking with the second and third industries” is an example of developing the “sixth industry.” The so-called “sixth industry” is a figurative expression, first proposed by Japanese scholars in the 1990s. At that time, Japan faced the problems of a lack of successors in agriculture and the decline of rural areas. In order to stimulate the vitality of agricultural development, it began to push agricultural production to extend into the secondary and tertiary industries, forming a complete industry chain integrating production, processing, sales and services. Because “1+2+3” equals 6, and “1×2×3” also equals 6, it is called the “sixth industry.” Today, the theory of the “sixth industry” has swept the world.
Zhang Hongyu, director of the Department of Economic Management of the Ministry of Agriculture, said that the “sixth industry” is consistent in meaning with what China has long advocated, namely letting agriculture “link with the second and third industries,” and that by improving agricultural processing, sales, services and other links, farmers can obtain more value-added benefits. Farmers must not only engage in planting or breeding (primary industry), but also in agricultural product processing (secondary industry) and agricultural product circulation and leisure agriculture (tertiary industry). Undoubtedly, this brings rich room for imagination to Chinese agriculture in its transition period.
Right now, momentum for the integrated development of agriculture with the secondary and tertiary industries has begun to appear across the country. For example, sightseeing agriculture and urban agriculture are being developed in urban suburbs; information agriculture and facility agriculture are being developed in developed areas; and in major agricultural areas, high-end value-added agriculture is being developed and agricultural product processing bases are being established. In some places, rural tourism and leisure agriculture have developed rapidly and have become the pillar of the local economy; it is already difficult to distinguish whether agriculture in these places is the primary industry or the tertiary industry.
Integrated development is imperative
The integrated development of the primary, secondary and tertiary industries is an inevitable product of agriculture's development to its current stage. Zhu Xinkai, professor at Renmin University of China and deputy director of the Leisure Agriculture Expert Committee of the Ministry of Agriculture, said that under the new normal, agriculture must be understood in a new way, and new paths must be found for agriculture's sustainable development. Agriculture itself is multifunctional, with not only production functions but also ecological, living and cultural functions. Each function will give rise to infinite possibilities.
“Although fewer and fewer farmers directly engage in agricultural production, society needs more and more types of agricultural products, and quality requirements are getting higher and higher. It can be said that although agriculture is the oldest traditional industry, it will never disappear; only its development path has changed.” Li Guoxiang, a researcher at the Rural Development Institute of the Chinese Academy of Social Sciences, believes that today's agriculture is already completely different from the agriculture of the past. Upgrading agriculture from the primary industry to the sixth industry is the way to better develop agriculture and better give play to its role in China's economy and society.
Right now, developing the “sixth industry” has become the conscious action of many farmers. At present, China's agricultural production faces the double squeeze of a constantly rising cost floor and a constantly pressing-down price ceiling, and farmers relying on a single planting or livestock industry are bound to have limited profits. “We must march into the depth and breadth of agriculture, carve out more jobs and income-increasing opportunities by lengthening the industry chain, create more new forms of business, and make them new growth points for the economy.” said Zong Jinyao, director of the Agricultural Product Processing Bureau of the Ministry of Agriculture.
However, at present China's rural integration of the primary, secondary and tertiary industries is still at a primary stage, and the degree of integration between agriculture and the secondary and tertiary industries is low and shallow. In many places, rural secondary and tertiary industries and farmers are basically two separate skins, with no long-term contracts, no stable relationships or shared interests, and no truly established collaborative supply chain.
Let farmers share in the value-added benefits
How can agriculture be upgraded into the sixth industry? Should it rely on the government or on market entities? Should it rely on farmers or on leading enterprises? Li Guoxiang believes that, judging from China's national and agricultural conditions, upgrading agriculture into the “sixth industry” is a systematic project, and it is necessary to extensively mobilize the forces of the whole society and arouse the enthusiasm of all sides. It requires both government support and guidance and the efforts of relevant production and operation entities, as well as the concern of the whole society.
The “sixth industry” sounds beautiful, but it cannot be applied in a one-size-fits-all way. The key is to adapt to local conditions, have regional characteristics, and fully tap and bring out the local natural endowments in order to make it big. “When the spring river warms, the duck is the first to know.” What kind of rural primary, secondary and tertiary industries can achieve integrated development, and how they can better achieve integrated development, depends chiefly on the behavior of agricultural operation entities. The integrated development of rural primary, secondary and tertiary industries covers a wide range, is highly complex, and has a prominent leading feature of cross-sector integration. If traditional operation entities represented by ordinary farmers cannot transform into new-type agricultural operation entities, it is often difficult for them to play a leading role in the integrated development of rural primary, secondary and tertiary industries.
In addition to breaking through the shackles of traditional agriculture in terms of concepts, breakthroughs must also be achieved in business models, systems and methods. “To upgrade agriculture into the sixth industry, the key force is leading enterprises with management capabilities and control over the entire industry chain, and they must establish close interest relationships with farmers.” Li Guoxiang said that in most cases, such leading enterprises do not directly engage in agricultural production, but mainly provide pre-production and post-production services for farmer household production, and use cooperatives as intermediaries, adopting contracts or order methods to organically integrate the primary, secondary and tertiary industries.
In the process of developing the “sixth industry,” it is necessary to uphold the principal position of farmers and respect farmers' wishes, so as to avoid the predicaments faced by some industries. Wang Haibo, vice president of the Hebei Academy of Agriculture and Forestry Sciences, said that the key is to introduce modern industrial development concepts and organizational methods such as industry chains and value chains into agriculture, extend the industry chain, build the supply chain, form a full industry chain, and improve the interest linkage mechanism so that farmers can obtain more benefits from the industry chain.
Many experts suggest that the government can guide and incentivize various entities in agriculture and related industries through means such as fiscal support for agriculture, tax reductions and exemptions, financial support for agriculture, and price support, so as to promote the integrated development of the primary, secondary and tertiary industries.