How can agricultural investment attract industrial and commercial capital to the countryside?
In China's agricultural sector today, one of the most eye-catching hot topics is none other than industrial and commercial capital rushing to stake a claim in agriculture. Most of them enter agriculture full of hope, believing that with money, people, and markets, they will navigate the agricultural field smoothly and triumphantly all the way. So Lenovo came, Evergrande came, Hailiang came, Alibaba came, Greentown came; industrial and commercial enterprises big and small raced one after another, fearing only that they might miss a once-in-a-lifetime opportunity, as if the flowers and beautiful trees on the far shore were within reach……
But facts have proven that between any wish and its outcome there is never a straight line; to reach the other shore smoothly is far from easy and simple.
Only after experiencing twists and turns, even setbacks, do people look back and sigh: agricultural investment, it's not easy to say I love you! At the same time they finally realize: the successful experience of the industrial and commercial world cannot simply be copied and pasted into agriculture. To truly accomplish something, before saying “I love you”, one must ask oneself another question: “How can I fall in love with you?”
The real-life examples below are vivid and profound footnotes.
NetEase: From ambitious to silent——why was “Ding's Pig” so difficult to deliver?
Modern agriculture is market-oriented scale agriculture. With only capital input, no technology or talent reserves, and no long-term industry experience, getting half the results for twice the effort is only to be expected.
“Raising pigs is harder than doing IT!” At the “China Agricultural Investment Conference” held by this newspaper in Zhengzhou, Henan, Mao Shan poured out his heart to the reporter, full of emotion.
Mao Shan is the head of “NetEase”'s agriculture division, specifically in charge of the pig-raising project.
As an IT elite, “NetEase”'s pig raising once caused a huge sensation. When president Ding Lei high-profile announced entering the livestock breeding field, raising pigs with an “ecological” concept and combining IT technology with traditional breeding, people have still not forgotten those words.
However, what breeding technology would the “ecological pig” adopt? How would it be priced? How would IT technology be applied to the traditional breeding industry? The public was full of curiosity.
Mao Shan was once an aircraft repairman. After being entrusted with the important task of “raising pigs”, he immediately traveled domestically and abroad for investigations and consultations. But just as he said in his resignation letter at the end of 2013, “Everyone has this experience with reading: from thin to thick, then from thick to thin, and we went through the same process. From knowing nothing about pigs, to discovering that raising pigs is actually very difficult. It brings together many world-class experts, in molecular breeding, nutrition research, disease control; every one is cutting-edge technology, all representing the highest level of human civilization. But gradually, our focus narrowed, because many things had already been solved by predecessors, or were being solved by professionals, and we only needed to focus on the key points. The book became thin, and we had our own proposition: the third-generation pig-raising model!”
As Mao Shan felt, the livestock breeding industry is a complete and lengthy industrial chain, from feed to breeding, from disease prevention to management, from waste treatment to product development; even for just one link, without three to five years, don't even think about mastering it.
The time that opportunity gives people is often limited. After the public had their appetite whetted countless times and their expectations dashed again and again, the cooperation between NetEase and Mao Shan was announced as terminated. NetEase had to admit: “We did overestimate ourselves, and also underestimated the problems faced in pig raising. Agriculture really is a completely new field for NetEase, and complex supply chain management is indeed not NetEase's strong suit.” “Ding's Pig” thus went silent.
In many people's minds, raising pigs seems to be the simplest work under the sun, with no technical content whatsoever. Their own parents had no education and could raise pigs, so could they, a university graduate, be worse than them? Little do they know, traditional breeding and modern breeding are worlds apart.
NetEase's “ecological pig” concept cannot be called bad, and Mao Shan's pig-raising efforts cannot be called lacking. But the modern livestock industry chain is extremely long, from feed, breeding, disease prevention, slaughter and processing, all the way to product development and marketing. To raise a good “ecological pig”, one must exercise control across the entire industry chain; otherwise, the “ecological pig” can only be a “gimmick”. But to open up this industry chain, without a very long time, you might not even find the door.
Experts believe that traditional breeding is free-range, a self-sufficient small-peasant economy, with no excessively high demands on labor productivity or land output; but modern breeding is a market-oriented activity, with strict plans for input-output ratios. To grow bigger and stronger, one must open up the industry chain. In this sense, modern breeding is not only capital-intensive, but also technology-intensive and talent-intensive. And the definition of technology and talent is not about how high one's degree is or how deep one's learning is, but about insight into and grasp of the industry.
Transfar: From spending big to repositioning——work that farmers can do, enterprises should not compete for
Industrial and commercial enterprises can only truly leverage their advantages in capital-intensive, technology-intensive, and talent-intensive fields, and must absolutely avoid investing in the production of primary products such as planting and breeding. Put plainly, work that farmers can do, enterprises must absolutely not invest in.
“We finally made a profit, 1 million!” The reporter still clearly remembers the excited expression of Zhu Xiaoxiang, then general manager of “Transfar Land”.
1 million yuan, for “Transfar Group”, is truly negligible, but for “Transfar Land”, it is extraordinary: after years of exploration, “Transfar Land” finally emerged from the agricultural industrialization predicament of only input and no output. They could finally proudly declare: investing in agriculture can be profitable!
“Transfar” is a renowned large private enterprise in Zhejiang, mainly engaged in chemicals, logistics, and other industries. On April 28, 2002, Zhejiang Province established an agricultural science and technology demonstration park. This park, covering 5000 mu with a total investment of 500 million yuan, adopted a government-led, enterprise-operated approach. And the operator was precisely Transfar Land, invested by Transfar Group.
Planning schemes, leveling land, recruiting employees, purchasing equipment; when Zhu Xiaoxiang finally grew tomatoes in the greenhouse and shipped them to market for sale, he discovered that his price was absurdly high and the market simply could not accept it. Farmers' tomatoes sold for only 2 yuan per jin, while Transfar's cost alone was around 10 yuan.
Zhu Xiaoxiang fell into deep thought: farmers' land is their own, their labor is their own, and they do not count costs; but when industrial and commercial enterprises enter the agricultural field, not only must land be leased and staff recruited, but social insurance must be purchased and an 8-hour workday strictly implemented. Farmers working for themselves can rise early and stay up late, but working for an enterprise, they can perfectly well “show up but not put in effort”.
Then counting on one's fingers: manual excavation of a water pool, 800,000 yuan; importing a fully automated seedling greenhouse from France, 10.25 million yuan; a tissue culture building, investment of 4.7 million yuan, not including water, electricity and other supporting facilities; importing a glass greenhouse from the Netherlands, 10.5 million yuan.
With such enormous cost input, how could tomatoes not be astronomically priced, and how could they still be sold on the market? Zhu Xiaoxiang quickly adjusted his strategy: proactively avoid farmers, no longer grow low-end mass products, but instead leverage high-tech advantages and use advanced tissue culture technology to produce seeds, seedlings, and high-end flowers such as Phalaenopsis, Cymbidium, and Anthurium.