How do Ministry of Agriculture policies affect the development strategies of large feed enterprises?
In 2015, feed enterprises launched the battle for transformation and upgrading, deploying one after another in areas such as family farms, product traceability, and internet finance. The major leading enterprises had long since sounded the call to advance, yet many enterprises had not yet gotten into character and were not very clear about these key points. In our country, any enterprise that wants to succeed and achieve development must cater to domestic trends and gain policy support. On April 30, the Ministry of Agriculture issued the 2015 national policies and measures for deepening rural reform, developing modern agriculture, and promoting farmers' income growth. Of the 50 measures, 12 are closely related to our industry, mainly involving subsidies for hog farming, policies to support family farms, fisheries-related policies, policies to support the development of agricultural product traceability systems, and policies to support rural finance. And these are basically consistent with the strategies of large feed enterprises this year. To put it in the most plain terms, follow the policies and put the money in your pocket.
New Hope and Dabeinong have similar internet finance business models, both combining offline and online. Building on their own accumulated customer resources in farming, they use online payment, search, and organizing and analysis tools to establish their own credit databases, and finally provide financial products at different tiers to eligible customers through their financial platforms, while the two obtain profits through various means such as channel commissions and interest spreads. This kind of P2P model lending platform requires the support of national policies and bank funds to operate normally.
Policies to support rural finance
Policies for financial support of large-scale agricultural production and intensive operation include increasing credit input for large-scale agricultural production and intensive operation. Bring various types of large-scale agricultural operating entities into the scope of credit assessment, establish credit files, raise credit limits, support leading enterprises in agricultural industrialization to legally form large agricultural enterprise groups through mergers, restructuring, acquisitions, and holding, and reasonably use syndicated loan methods to meet the large-sum funding needs of large-scale agricultural operating entities.
Centering on local specialty agriculture and taking core enterprises as the center, bundle upstream and downstream enterprises, farmer cooperatives, and farming households, and develop and promote various supply chain financing products such as order financing, movable property pledge, accounts receivable factoring, and producer-trader-bank arrangements. Explore ways such as manufacturer or supplier guarantees or repurchases to advance mortgage loan business for agricultural machinery and equipment.
Product traceability system
Enterprises such as CP, New Hope, and Zhengbang have been deploying in food terminals for the past two years, committed to providing traceable safe food.
Support policies for building the agricultural product traceability system
To ensure the quality and safety of agricultural products, in recent years the state has continuously accelerated the building of an agricultural product quality and safety traceability system, constructing interconnection of information at each node such as production, purchase, storage, and transportation, and realizing full-process quality traceability of agricultural products from the source of production to before the products go on the market. In 2015 and for a period thereafter, the focus will be on accelerating the formulation of quality traceability rules, management norms, and technical standards, promoting the building of a national traceability information platform, and further improving the traceable system for agricultural product quality and safety. At the same time, increase investment in building the agricultural product quality and safety traceability system, continuously improve the equipment conditions required for the operation of grassroots traceability systems, and strengthen capacity building at the grassroots level in information collection, supervision and spot checks, inspection and testing, law enforcement and supervision, and publicity and training. According to the principle of piloting first and then comprehensively advancing, first carry out pilots on entities and products certified under the "three products and one label" system, and on the basis of summarizing pilot experience, gradually achieve the goal of traceable management covering the quality and safety of major agricultural products in our country.
The one most tightly integrated with family farms should be Wens, which proposed the concept of company + family farm as early as 2011. Wens currently markets 12.18 million hogs, 697 million broilers, and 16.99 million meat ducks, with sales revenue of 38 billion yuan. Wens currently has 53,000 cooperative family farms, and all family farms made a profit of 3.992 billion yuan for the whole year. In 2013, when the director of the Animal Husbandry Department of the Ministry of Agriculture visited a Wens family farm, he once said that this model of Wens had received the attention of the Ministry of Agriculture and was worth learning from by farming enterprises nationwide.
Policies to support the development of family farms
In 2015, relevant state departments will adopt a series of measures to guide and support the healthy and stable development of family farms, mainly including: carrying out demonstration family farm creation activities, promoting the implementation of related policies such as agriculture-related construction projects, fiscal subsidies, tax incentives, credit support, mortgage guarantees, agricultural insurance, and facility land use, increasing training for family farm operators, and encouraging graduates of secondary and higher schools, especially agricultural vocational colleges, new-type farmers and rural practical talents, and people returning from work or business in cities to establish family farms. Develop moderate-scale operations in various forms. Encourage places with conditions to establish family farm registration systems, clarifying recognition standards, registration methods, and support policies. Explore carrying out family farm statistics and training for family farm operators. Promote relevant departments to adopt various methods such as rewards and subsidies to support the healthy development of family farms.
In addition to Wens, Bao Hongxing also once said that in the future family farms will be the mainstream of China's farming industry, and Shuangbaotai, as a feed enterprise, should also change along with changes in the farming situation.
As part of the market economy, the animal husbandry industry is affected by the broader environment all the time. In 2015, our country's economy entered a new normal, moving from high-speed growth to medium-to-high-speed growth, and from extensive growth to intensive growth. Our animal husbandry industry is also seeking transformation and development in a sluggish environment. Setting aside the previous growth model that relied purely on feed sales, more feed enterprises are placing their chips in different baskets such as rural internet finance, food traceability systems, and family farms.