The New Normal Gives Birth to a New Agriculture, and the Future Is Worth Looking Forward To

Grain output rising for an "eleventh consecutive year" and farmers' incomes growing rapidly for an "eleventh consecutive year" have become new achievements in the "three rural" fields over the past year. People hope this "sentence pattern" will continue to be used in the coming year and become the norm.

This expectation is in line with general understanding. The "three rural" issue has been repeatedly and continuously emphasized as the "top priority" of the whole Party's work. For 12 consecutive years, the Central No. 1 Document has all involved agriculture, and this degree of attention has exceeded that of any period in history. "Farming pays no tax, and farmers still receive subsidies, and new subsidy programs keep emerging." Enthusiasm for grain production has been stimulated. In particular, subsidies and rewards for large grain growers have prompted a large number of capable people across the country who are quick-witted and know how to "live off policy" to begin transferring and concentrating scattered land from farmers. In some places, land transfer has even been treated as an investment promotion project to attract social capital and personnel participation, enabling large areas of abandoned land to be cultivated again. This bustling scene of grain production, accompanied by consecutive increases in grain output and farmers' incomes, clearly shows a trajectory consistent with the orientation of the No. 1 Documents over more than a decade.

However, the release of the effects of any policy is not unlimited. As far as the effects of China's agricultural support policies are concerned, the situation is also changing. First, the marginal effect of policy is diminishing. Direct grain subsidies of a few dozen yuan per mu have now gradually lost their policy appeal, because they are far less beneficial than the rise in wages for migrant workers who leave home for work; and rural hired labor expenses are now not much different from urban work wages, while hiring rural labor is extremely difficult, because almost all young and middle-aged laborers have gone out. Thus, maintaining the previous subsidy standards can hardly generate a greater incentive effect. In particular, the prices of many domestic agricultural products are now inverted relative to the international market, and relying only on government market-support purchases makes it difficult to maintain competitiveness. Not long ago, dairy farming suffered enormous competitive pressure from dairy products from free trade zones, and "milk dumping incidents" played out repeatedly in many regions across the country. This is what experts commonly call the "two-floor effect," namely the gradual raising of the "floor" of domestic agricultural production costs and the "ceiling" encountered by price increases for major domestic agricultural products. Under the double squeeze of costs and prices, how agricultural production can, under support and protection policies, improve market competitiveness and achieve sustained increases in output is no small problem, and it is also a major test that China's modern agricultural development must face.

Second, dependence on policy incentives coexists with destructive effects that cross policy boundaries. Long-term policy subsidies have caused some grain production behavior to be maintained through the form of "building up large households" via land transfer, and some has even been maintained through behavior that damages the environment and ecology. For example, the large-scale reclamation of lakes for farmland that has appeared in some places in recent years is another kind of interpretation of "living off the water" derived under the stimulation of the huge difference between reclamation policy subsidies and ordinary smallholder subsidy standards. This is a kind of "collusion between officials and businesses" under a distorted view of achievements at the grassroots level, and its damage to the ecological environment is like the great steelmaking campaign during the "Great Leap Forward" era. This kind of destructive development behavior cannot form sustained "healthy production capacity"; instead, it may be "harmful production capacity," with a poor prognosis.

In addition, China's agricultural resources are scarce, and water shortages in particular will severely constrain agricultural production. Over-extraction of groundwater has already formed underground funnel areas in many regions. The North China Plain alone has more than 200,000 sq km of underground funnel areas, creating numerous hidden dangers for agricultural production. Also, farmland in many areas is seriously polluted. The exit of "toxic production capacity" and the long cycle of land remediation will both directly constrain the growth of grain output, and expecting "consecutive increases" is indeed very difficult.

The Chinese economy has already entered a new normal. After shifting from high-speed growth to a stage of medium-to-high-speed growth, the international and domestic environment we face has undergone profound changes, and agricultural development has likewise entered a new stage. From a rational perspective, we should not now blindly pursue consecutive increases in grain output, but should pay more attention to how to make agriculture strong, and shift as soon as possible from extensive management that mainly pursues output and relies on resource consumption to intensive development that gives equal weight to quantity, quality, and efficiency, focuses on improving competitiveness, focuses on agricultural scientific and technological innovation, and focuses on sustainability, taking a path of modern agricultural development featuring efficient output, safe products, resource conservation, and environmental friendliness. This is both an environmental imperative and the result of the inherent laws of agricultural development.

" For China to be strong, agriculture must be strong" is an important spirit of this year's No. 1 Document. A strong agriculture must be equipped with modern business methods, modern science and technology, modern management methods, and modern material equipment conditions. It is modern agriculture that integrates marketization, scientificization, organization, facility-based development, mechanization, intensification, informatization, and socialization. Agricultural modernization is the foundation and "key variable" of the modernization of the entire country, and it is also a weak link in building a moderately prosperous society in all respects. Therefore, we must, with a broader vision and more decisive and powerful measures, coordinate the integrated development of agricultural modernization with the secondary and tertiary industries, and highlight the foundational role of modern agriculture in the overall situation of economic and social development; unify food security with food safety, and place greater emphasis on food safety; amid the accelerated advancement of urbanization, firmly uphold the red line of cultivated land, establish the thinking that storing land is more important than storing grain, and strive in the development of modern and efficient agriculture to seek the organic unity of "strong agriculture," "prosperous farmers," and "beautiful rural areas." The realization of this goal is the new agriculture born of the new normal. Among policy support tools, improving the orientation and effectiveness of agricultural subsidy policy is an important direction, and conducting a systematic evaluation of agricultural support policies is a necessary and urgent task.