Why should there be entry thresholds for capital going to the countryside?
Set thresholds and establish rules for capital going to the countryside, so that those who genuinely want to work in agriculture and are capable of doing so stay, and those who harbor ulterior motives and harm farmers' interests are kept outside.
Nowadays, enthusiasm for capital going to the countryside to farm is running high. Whether from real estate or the internet, all kinds of enterprises are rushing into agriculture one after another. According to statistics from the Ministry of Agriculture, over the past three years, the area of contracted land transferred to enterprises has grown at an average annual rate of more than 20%. However, it is not the case that having money means you can make a go of agriculture. “Rice is easy to eat but hard to grow.” It is not uncommon for capital going to the countryside to lose money.
⟦NL> In a well-known rice-producing area in Northeast China, a boss talked about his farming experience: two years ago, his company transferred 5,000 mu of land. At the time, he assumed that large-scale operation would save costs and increase efficiency, and that it would definitely be profitable. He never expected that only after trying it did he realize how difficult it was. Being unfamiliar with the people and the place, the transfer fee was significantly higher than that paid by large local farmers, labor costs were high, and the hired farmers did not put their hearts into farming. The per-mu yield was even 300 jin lower than that of ordinary farmers. When the accounts were settled at the end of the year, each mu lost more than 200 yuan. After paying “tuition” for two consecutive years, although the contract had not expired, he still gave up.
Judging from practices in many places, when industrial and commercial capital grows field crops such as grain, it is mostly “diseconomies of scale.” But capital pursues profit. If growing grain does not work, then grow fruits, vegetables, and flowers, or pursue high-tech and ecological agriculture. For the many enterprises that do not understand agriculture, high investment means higher risk, and it is inevitable that they lose money while making a lot of noise. That being the case, why are so many enterprises going to the countryside one after another? Some lack understanding of the long-term nature and risks of agricultural investment and blindly follow the trend; some are ill-intentioned to begin with, and on the transferred land they do not grow crops but “grow houses.” Some enterprises hold a speculative mindset, and with local governments adding fuel to the fire, the phenomenon has appeared of enterprises “having the strength to compete for land but not the ability to farm it,” along with tendencies toward non-grain and non-agricultural use of arable land. If such capital going to the countryside is not restricted and is allowed to develop willfully, in the end it is agriculture and farmers that get hurt.
In fact, agriculture most lacks capital and technology. When capital enters agriculture, it can bring capital, technology, and advanced business models, and can accelerate the transformation of the agricultural development model. Of course, this is a good thing. The key is to set thresholds and establish rules for capital going to the countryside, so that those who genuinely want to work in agriculture and are capable of doing so stay, and those who harbor ulterior motives and harm farmers' interests are kept outside. The recent “Opinions on Strengthening Supervision and Risk Prevention for Industrial and Commercial Capital Leasing Agricultural Land,” issued by four central departments, proposes implementing tiered filing for industrial and commercial capital leasing agricultural land, which is precisely to set strict policy boundaries for capital going to the countryside.
What should industrial and commercial capital entering agriculture be encouraged to do? In one sentence, do what farmers cannot do. They should be encouraged to engage in agricultural product processing and circulation and agricultural socialized services, and encouraged to develop capital- and technology-intensive modern planting and breeding industries, such as building large modern farms. With investments reaching hundreds of millions of yuan, farmers cannot afford to do it, but enterprises can get it going. What should be restricted? Restrict industrial and commercial capital from leasing agricultural land for long periods and on a large scale, prevent enterprises from competing with farmers for farmland management rights, and prevent farmers from being squeezed out. What should be prohibited? Strictly prohibit illegal and non-compliant acts such as changing land use, harming farmers' interests, and damaging agricultural production and the agricultural ecological environment. This is a “bottom line” that must not be crossed.
To guide industrial and commercial capital going to the countryside well, local governments must neither be absent nor overstep their role. Rural conditions differ across places, so it is necessary to adapt measures to local conditions, accurately grasp policies, and build a good institutional “firewall.” It should be recognized that developing scale operations should also follow the trend, and under no circumstances should targets be assigned or tasks be set to force rural households to transfer farmland. As for industrial and commercial capital, it must recognize that agricultural investment cannot seek quick success and instant benefits. Only by patiently committing to it for the long term and letting farmers share in the development “dividends” can it reap the future of agriculture.