Agricultural social service organizations serve farmers, but who serves them?

Support mechanisms are generally lacking

Take Hunan Province's currently most mature agricultural machinery services and integrated pest and disease control services as examples: these two types of service organizations face difficulties such as gaps in corporate after-sales service and having to shoulder production risks.

During this year's spring plowing season, several rotary tillers at Sanming Agricultural Machinery Cooperative in Changsha County broke down and could not operate normally. Although the manufacturer and dealer were contacted repeatedly, the problem was never resolved, leaving nearly 1,000 mu of local farmers' farmland unable to be plowed in time. Zhou Juming, head of the cooperative, told reporters that this kind of situation, where production services are delayed because parts cannot be found or repairs are not timely, has become a "fixed feature" of the busy farming season in recent years.

Yan Yueyun, general manager of Hunan Wotian Agricultural Equipment Co., Ltd., told reporters that the phenomenon of after-sales "gaps" among agricultural machinery manufacturers is currently very common. The main reasons are, first, the rapid pace of product upgrading: once an old machine is discontinued, the related parts cease production, and even for agricultural machinery purchased two years ago, parts may no longer be found on the market; second, the sales radius is large while the service radius is small. Because some non-local manufacturers have not set up after-sales service points locally, situations arise where "I come to repair it for you once, and the repair fee isn't even enough to cover the travel cost."

It is hard to find parts for old machines, which delays production, while competition over equipping new machines brings enormous financial pressure. Zhou Juming introduced that although he already owns agricultural machinery worth more than 4 million yuan in total, he still has to keep adding more every year. "Last year I had just upgraded my harvester from transverse drum threshing to longitudinal, and this year I have to spend several hundred thousand yuan to replace all the rice transplanters from 9-inch to 7-inch, otherwise I can't compete with others." Zhou Juming lamented: "This is like a bottomless pit. Basically all the money earned goes into upgrading machines."

Liu Kaijian, who is engaged in integrated pest and disease control services in Changde City, mocked himself as a "professional scapegoat for heaven." In 2013, some townships in Changde suffered grain yield reductions of more than 50% due to weather. Although the local agricultural department later issued an authoritative appraisal, the farmers who suffered losses believed it was the responsibility of Liu Kaijian, who provided pest and disease control services, and refused to pay service fees. Liu Kaijian's company lost 500,000 yuan that year as a result.

"Pest and disease control is open-air work and is highly affected by weather. If it is not done well, it can indeed easily cause yield reductions or even total crop failure. But agricultural production is actually affected by many factors. Once losses occur, it is already a common phenomenon for farmers to blame the service organization no matter what." Tang Huilian, deputy director of the Plant Protection Station of the Hunan Provincial Agricultural Commission, introduced that of the 1,345 integrated pest and disease control organizations currently registered and filed in Hunan Province, almost all have experienced compensation or failure to collect service fees.

"The integrated pest and disease control service organizations are not strong in strength. Registered capital is generally between 100,000 yuan and 200,000 yuan, and net profit is only about 10%. Once a dispute or compensation occurs, a whole year's work is wasted." Tang Huilian said.

"Favoring farmers over organizations, favoring technology over after-sales service"

Although the importance of agricultural social service organizations to agricultural modernization and new types of business entities is self-evident, how to ensure their normal operation is often overlooked. In policy making, the notion of "favoring farmers over organizations" has always existed.

In 2009, the Hunan Branch of China United Property Insurance Company piloted a liability insurance specifically for integrated pest and disease control service organizations. Because integrated pest and disease control had just emerged at that time and the market had not yet taken shape, this insurance type was canceled after more than a year because "only one or two policies could be written in each county per year."

Recently, when Yang Minlong, deputy manager of the company's liability insurance department, learned from reporters that the number of registered and filed integrated pest and disease control service organizations in Hunan Province had already reached 1,345 and the service area had exceeded 10 million mu, he appeared very surprised: "We always thought this market was very small, so we never paid attention to it after 2011. I didn't expect it to develop so fast in recent years. It seems this insurance type is worth doing again."

Tang Huilian introduced that Hunan currently has various subsidies to encourage farmers to grow grain, but there is not a single special fund to support integrated pest and disease control service organizations, and within the whole province only Longhui County has provided subsidies for this through county finances.

In terms of agricultural machinery services, because agricultural equipment manufacturing has been in a period of technological catch-up in recent years, enterprises generally have the problem of "favoring technology over after-sales service." Zhu Hongchao, secretary-general of the Hunan Tractor Strategic Alliance, said bluntly that the problem of agricultural machinery manufacturers "favoring technology over after-sales service" is already very serious, and if corresponding measures are not taken, this trend will probably continue for five to eight years.

"China's agricultural equipment manufacturing can be described as 'poor foundation, rapid development.' Ten years ago, the market was still dominated by old-style agricultural machinery mainly using hand-cranked levers, and now it has already begun to enter the era of intelligence." Zhu Hongchao introduced that in this process, enterprises have all put their energy into technological innovation and have not paid enough attention to after-sales service.

In the view of Liu Ning, chairman of Xiangtuo Agricultural Equipment Co., Ltd., the lack of after-sales service is also related to the shortage of agricultural professionals, fierce market competition, and unscientific formulation of relevant policies.

Liu Ning told reporters that reasons such as the mismatch between teaching at agricultural vocational colleges and market demand have created the dilemma that "no one knows how to repair" new types of agricultural machinery. "I have been in this industry for 20 years, and there are still dozens of types of agricultural machinery I don't know how to repair. Take the plant protection aircraft that have appeared in recent years. It would be good if ten people in all of Hunan Province could be found who know how to repair them." Liu Ning said.

In addition, due to fierce competition and frequent product replacement, most manufacturers are unwilling to take the risk of overstocking and mass-produce parts. The current agricultural machinery promotion and subsidy catalog also has phenomena of "not distinguishing north from south" and "favoring the new and disliking the old." "Most agricultural equipment in the current catalog is only suitable for northern plains areas, and is basically produced by northern manufacturers." Liu Ning said that the catalog also encourages the promotion of new products, so some manufacturers are keen to chase novelty, making after-sales service even harder to keep up.

A multi-pronged approach to unleash the potential of "agricultural service providers"

Because of their importance in serving farmers, agricultural service organizations have been written into the No. 1 Central Document for three consecutive years. But compared with the various kinds of support obtained by family farms and professional farmers, the service provided to these "service providers" is pitifully little. Industry insiders believe that improvements should be made in the following aspects to tap the greatest potential of agricultural social service organizations.

First, on the premise of fully respecting market rules and farmers' choices, the government should provide moderate guidance and management. Liu Ning believes that the government can use guiding policies such as subsidies to ensure the stock of agricultural equipment parts and other high-consumption, shortage-prone means of production. At the same time, enterprises should be encouraged to build regional agricultural machinery and agricultural technology service centers to provide technical and after-sales support for service organizations.

Second, fully attach importance to cultivating modern agricultural service-oriented talent. Industry insiders report that many employees of service organizations currently receive training through methods such as the "Sunshine Project," but in actual operations trainees almost all need to be "retrained from scratch." Tang Huilian said that because agricultural production has been subdivided into multiple links, relevant training must emphasize systematization and professionalism. Zhu Hongchao believes that in addition to strengthening practical teaching at agricultural vocational colleges, relevant manufacturers should also be encouraged to become training providers.

Third, explore diversification of agricultural insurance providers and increase support for service organizations. Liu Zuoxiang, associate professor at the School of Economics and Management of Changsha University of Science and Technology, suggested that the government can reasonably support service organizations and related enterprises and develop multiple insurance types targeting agricultural service entities and practitioners. Financial institutions should be supported in making agricultural social service organizations a key focus of credit support for agriculture, arranging a certain amount of credit funds each year to solve their shortage of seasonal and temporary operating funds.