How Can Agricultural Modernization Break Through Development Bottlenecks
“Agriculture must transform from the traditional primary industry into the “sixth industry.” Institutional innovations such as land transfer, land trusteeship, land equity participation, land credit mortgages, and large-scale land management have become the prerequisite for attracting urban industrial and commercial capital and other social capital. A series of exploratory reforms centered on land are mainly aimed at achieving standardized transfer of management rights on the basis of respecting farmers' wishes.”
The Central Rural Work Conference that just concluded assessed and summarized this year's “three rural issues” performance and laid out priorities for next year's “three rural issues” work. Although the Rural Work Conference is far less directly relevant to ordinary people than the Central Economic Work Conference that concluded last week, agriculture is the foundation of price stability, rural areas are the country's vast expanse, and farmers' well-being is the precondition for social stability. Therefore, paying attention to the current situation and trends of the country's “three rural issues” means paying attention to our own vital interests.
⟦NL> Since 2004, China's grain output has achieved “eleven consecutive increases,” with comprehensive bumper harvests and increased production in farming, animal husbandry, sidelines, and fisheries, making the supply of grain and staple and non-staple foods abundant and prices stable for society as a whole, while farmers' income growth has achieved “eleven consecutive years of rapid growth.” Over the 11 years of continued agricultural and rural development, the overall situation has not continued to deteriorate, providing support and confidence for economic restructuring, industrial upgrading, and stabilizing prices.
China's agricultural resource endowment is insufficient; per capita arable land and water resources account for only 1/3 and 1/4 of the world average respectively. To harvest the same unit of grain output, China uses 4 times the world average amount of chemical fertilizer, and the utilization rate of pesticides used is less than half the world average, causing continuous decline in soil fertility and placing unprecedented pressure on the agricultural ecological environment. At the same time, although major agricultural products have had consecutive bumper harvests, the prices of agricultural products have long been inverted between international and domestic markets, and the use of “amber box” policies (various government subsidies related to agriculture that distort agricultural product prices) has approached its limit.
Furthermore, because there are many people and little land, the scale of land management is too small, and farming is not attractive to rural young and middle-aged adults. At present, 270 million migrant workers account for about half of the total rural labor force, while nearly 60 percent of the other half of the rural labor force, whose average age exceeds 45, still does not truly engage in agricultural production, and the contradiction of “who will farm the land” keeps intensifying. Overall, China's agriculture currently faces the triple squeeze of an ecological “ceiling,” a subsidy “ceiling,” and a labor force age “ceiling.” If we do not take advantage of the favorable opportunity presented by the current overall stable and improving political, economic, and social situation in China to quickly make up for the shortcomings of agricultural modernization and avoid agricultural shrinkage, rural decline, and a widening urban-rural income gap, the possible resulting social unrest, economic stagnation, and obstruction of the modernization process are not alarmist talk.
How can the “tightening band” hindering agricultural modernization be broken? Only by deepening rural reform. If the first ten Central Rural Work Conferences since 2004 were mainly devoted to increasing the supply of agricultural products and farmers' incomes, and initially curbed the deteriorating trend in agriculture and gradually improved it, then starting with this Rural Work Conference, in the next ten years, while continuing to consolidate and ensure increased agricultural production and farmers' incomes, the focus must be on solving the difficult problem of agricultural modernization. This Rural Work Conference is very likely to be a watershed in which China's agriculture shifts from its previous focus on ensuring increased production and income to scientific farming and intensive cultivation.
Among the “five major signals” sent by this Rural Work Conference, the signal most valued by the younger generation in both urban and rural areas and by urban industrial and commercial capital is that the “sixth industry” is already on the horizon. Contemporary frontier economics calls the integration and interaction of the primary, secondary, and tertiary industries the “sixth industry,” mainly introducing market industrial chains, value chains, and modern industrial organization methods into the agricultural sector to achieve mutual integration of agricultural production, agricultural product processing and circulation, and leisure services, thereby achieving a triple improvement in agricultural product output and quality, farmers' incomes, and agricultural added value. The main purpose of the “sixth industry” is to stretch and extend the industrial chain of modern agriculture, forming in the process a “chain reaction” in which capital, technology, logistics, services, agricultural research, and skilled farmers blend with one another, transforming agriculture from a national “subsidy industry” into an “emerging industry” and making it a new growth pole in the China Economic 2.0 sector.
For agriculture to transform from the traditional primary industry into the “sixth industry,” institutional innovations such as land transfer, land trusteeship, land equity participation, land credit mortgages, and large-scale land management have become the prerequisite for attracting urban industrial and commercial capital and other social capital. This series of exploratory reforms centered on land are all aimed at carrying out standardized transfer of management rights on the basis of respecting farmers' wishes. In short, agricultural modernization is not separated from the younger urban generation by mountains, rivers, or bellies, and we are glad to see a group of down-to-earth people with aspirations fulfill their dreams of starting businesses and building careers in the process of agricultural modernization.