Developing Modern Agriculture: How to Find the Most Ideal Agricultural Input Supplier
China is a typical smallholder economy, and farmers are the terminal end of the agricultural input supply chain as well as a vulnerable group within it. In addition, the seasonal and experience-dependent nature of agricultural input products makes the order of the agricultural input market rather chaotic, and the victims are precisely the farmers. Therefore, from a macro perspective, strictly establishing a standardized and normalized quality service evaluation index system starting from suppliers is of great significance for protecting farmers' interests and promoting the development of modern agriculture.
Developing Modern Agriculture: Finding the Most Ideal Agricultural Input Supplier
China feeds 20% of the world's population with 7% of the world's cultivated land, but uses 20% of the world's total pesticide consumption and 35% of the world's total chemical fertilizer consumption. Therefore, agricultural production inputs are important inputs for developing modern agriculture and ensuring food security. China is a typical smallholder economy, and farmers are the terminal end of the agricultural input supply chain as well as a vulnerable group within it. In addition, the seasonal and experience-dependent nature of agricultural input products makes the order of the agricultural input market rather chaotic, and the victims are precisely the farmers. Therefore, from a macro perspective, strictly establishing a standardized and normalized quality service evaluation index system starting from suppliers is of great significance for protecting farmers' interests and promoting the development of modern agriculture.
Chaos Abounds in the Field of Agricultural Input Distribution
Chaos: foreign invasion, intensified competition, low entry barriers, terminal disorder……
According to the characteristics of China's agricultural input supply chain, agricultural input suppliers refer to enterprises and their branches and individual industrial and commercial households that provide agricultural input goods and corresponding services to retailers, including agricultural input manufacturers, distribution enterprises, dealers and other intermediaries. According to the characteristics of agricultural input distribution enterprises in China's supply and marketing cooperative system, agricultural input suppliers are mainly divided into agricultural input production enterprises, agricultural input distribution enterprises, etc. Agricultural input production enterprises mainly include: pure agricultural input production enterprises (including contract manufacturing enterprises), and enterprises engaged in both agricultural input production and distribution, excluding enterprises integrating agricultural input production and distribution; agricultural input distribution enterprises include: national-level agricultural input distribution enterprises, mainly China National Agricultural Means of Production Group and Sinochem; regional agricultural input distribution enterprises, such as Heilongjiang Qingfeng, Guangdong Tianhe, Zhejiang Agricultural Inputs, etc.; provincial-level agricultural input distribution enterprises, such as Jilin Agricultural Inputs, Shandong Agricultural Inputs, etc.; prefecture- and city-level agricultural input distribution enterprises, such as Guangzhou Agricultural Inputs; county-level agricultural input distribution enterprises, etc.
The agricultural input industry as a whole is in a state of oversupply, with fierce market competition. Along with the continuous deepening of marketization in the field of agricultural input distribution, foreign capital, private capital and others have entered the distribution field one after another. The number of market entities in agricultural input distribution has continued to increase, and competition has continued to intensify. Competition among market entities such as the supply and marketing cooperative system, the agricultural technology system, and individuals and private enterprises engaged in agricultural input distribution has continued to intensify. Some large agricultural input production enterprises have channeled down into lower-tier markets, distribution enterprises pay more attention to network depth, and numerous agricultural input retailers have joined the agricultural input distribution industry. In the survey, a single town commonly had 20-30 retailers, and even a town with only 10,000 mu of land had 3-5 retailers. First, the threshold of 30,000 yuan is too low; second, the numerous retailers ultimately caused chaos in the terminal market.
Contradictions Between Supply and Demand Sides Are Increasingly Prominent
Contradictions: price wars, tearing up contracts, breaking promises……
Overall, in recent years the bargaining power of domestic agricultural input suppliers has declined. In the off-season for agricultural input sales, in order to recover working capital as quickly as possible and reduce storage costs, agricultural input suppliers continuously squeeze their profit margins and engage in “price wars” to dump products. But in the peak season for agricultural input sales, as farmers' consumer demand rises, agricultural input prices also rise accordingly, and suppliers sometimes even go so far as to tear up contracts to make up for the losses suffered during the off-season.
Therefore, along with the transformation and upgrading of the agricultural input industry, the contradictions between the two sides of supply in the supply chain are continuously intensifying, and there is an urgent need to establish a comprehensive, objective and fair agricultural input supplier evaluation index system, continuously advance industry standardization and normalization, and raise the level of industry development.
Evaluation of the Distribution System Determines Success or Failure
Problems: partnerships, risk control, dynamic evaluation……
How agricultural input distribution enterprises and dealers choose suppliers to establish strategic partnerships, control the risk of relations between both sides, and formulate a dynamic supplier evaluation system are several issues of general concern in the agricultural input industry. As the proportion of procurement in sales revenue continues to grow, procurement has gradually become a key factor determining the success or failure of agricultural input operating enterprises. Supplier evaluation and selection, as the foundation and prerequisite for the normal operation of the supply chain, is becoming the hottest topic in the development of enterprises and the industry. The diversity of suppliers further complicates supplier evaluation and selection work, requiring a standardized criterion for operation. The first thing to be resolved in supplier evaluation is the establishment of a supplier evaluation index system.
Only by comprehensively understanding the connotations and characteristics of the development of the agricultural input industry, understanding the contradictions and problems of the agricultural input supply chain, and formulating an objective and fair evaluation standard system, can the selected criteria be more comprehensive, and can the criteria then be used to evaluate suppliers and ultimately find the ideal supplier.