A Detailed Explanation of the Three Characteristics of the New Normal in Agriculture

What kind of new normal agriculture faces can be summed up in three phrases: "squeezed by two boards," "restricted by two lights," and "the development of the sixth industry." The "two boards" are the "ceiling" on agricultural product prices and the "floor" on cost prices. The "two lights" are the yellow light of the WTO and the red light of resources and the environment. The "sixth industry" means that agriculture is an industry that can encompass the primary, secondary, and tertiary industries; one plus two plus three equals six, and therefore agriculture is called the sixth industry.

Squeezed from above and below by the "two boards." The "floor" keeps rising; the "floor" refers to the cost price of agricultural products. The continuous rise in agricultural product prices is caused by many factors: first, the price of labor keeps rising; second, land rent keeps rising; third, the prices of pesticides, fertilizers, and seeds remain high, while their usage keeps increasing; fourth, the cost of agricultural technical services also keeps rising. These four factors make agricultural product prices higher and higher.

The "ceiling" has already been broken through. Agricultural product prices are all in the red, and some agricultural products have already broken through the "ceiling," rising above international market prices. The squeeze of the "floor" and the rising "ceiling" leave less and less room for agricultural production.

Restricted by the yellow and red "two lights." The "two lights" are one yellow light and one red light. The yellow light refers to the "amber box policy" set by the WTO; after joining the WTO, China must abide by WTO rules.

The "red light" refers to resources and the environment, and the red light for resources and the environment has already turned on. Agricultural resources are strained and environmental pollution is severe. The three most strained factors in China's agricultural resources are: first, arable land; second, water resources; and third, agricultural labor resources, which are becoming increasingly strained, with the phenomena of leaving agriculture, disliking agriculture, and abandoning agriculture spreading throughout society.

These resource and environmental problems have become two "tightening bands," seriously affecting the improvement of both the quantity and quality of our country's agricultural products. The cheapness and high quality of foreign agricultural products form a strong competitive posture, making our country's agriculture face unprecedented new challenges.

The development of the "sixth industry." Building agriculture into the "sixth industry" is the key and the core. The urgent task is to lengthen the industrial chain: inject modern elements to transform the primary industry; closely follow the theme of the "four qualities" to upgrade the secondary industry; and strive for innovative breakthroughs to develop the tertiary industry.

First, modern elements should be injected, and four articles should be done well in transforming the primary industry: first, do a good job with the article on land. On the basis of confirmation, registration, and certification, promote appropriately scaled land management. Our country's national conditions determine that the scale of agricultural management must be appropriate. Second, do a good job with the article on "people." First, cultivate modern professional farmers; second, address the issue of farmers' organization. Third, do a good job with the article on money. Lack of funds is the biggest obstacle to rural development. Fourth, do a good job with the article on the "green box." The "amber box" has already been closed, and the "green box" should be fully opened. Areas such as land consolidation, farmland water conservancy, rural roads, and poverty alleviation and development should all have investment increased.

Second, closely follow the "four qualities" to upgrade the secondary industry. To upgrade the secondary industry, several industrial chains must first be built completely. First, the production and processing industrial chain for grain and agricultural and sideline products; second, the production and processing industrial chain for livestock and aquatic products; third, the production and processing industrial chain for forestry and forest products; fourth, the comprehensive utilization industrial chain for straw. The "four qualities" are the appearance, quality, grade, and brand of agricultural product processing.

Third, strive for innovative breakthroughs to upgrade the tertiary industry. The development prospects for agricultural services are broad. The more developed a country is, the more agricultural services become a popular occupation. American farmers account for more than one percent of the total population, while the service industry serving agriculture accounts for 20% of the total population. The potential of this industry in China that remains to be tapped is enormous.

First, innovative research and development. Especially seeds. There is currently great disagreement in society over the issue of genetic modification, but as scientific research, GM technology must definitely be studied in depth. In addition, research and development should also track future trends in agricultural development and align with international standards.

Second, innovative services. Services across the entire industrial chain should be innovated; services should be scaled up, with the most typical being agricultural machinery services; "foolproof" services should be provided. At present, individual farming households need many complex services. A model can be created in which, with one phone call, a company can provide all the needed agricultural services.

Third, innovative business forms. Against the backdrop of the Internet of cloud computing and big data, many inconceivable new business forms will soon emerge in unexpected ways. Today's Internet thinking is to eliminate all intermediate links and bring manufacturers' goods directly to users through direct sales; this is the new business form.