Reform of state farms expected to become a policy breakthrough as a series of central meetings is about to convene
As December approaches, a series of high-level meetings such as the Central Economic Work Conference and the Central Rural Work Conference are about to convene, and the reform of the rural land system, which the market pays relatively close attention to, may be a key topic of discussion. From 2004 to 2014, China issued No. 1 Central Documents with the theme of "san nong" (agriculture, rural areas, and farmers) for eleven consecutive years,
As December approaches, a series of high-level meetings such as the Central Economic Work Conference and the Central Rural Work Conference are about to convene, and the reform of the rural land system, which the market pays relatively close attention to, may be a key topic of discussion.
From 2004 to 2014, China issued No. 1 Central Documents with the theme of “san nong” (agriculture, rural areas, and farmers) for eleven consecutive years, highlighting the important status of the “san nong” issue in China's period of socialist modernization. This year, central ministries and commissions have intensively conducted surveys of state farm systems across the country and drafted reform documents, and at the central meetings at the end of the year, a state farm system reform plan as well as a series of new policies supporting state farm development will be introduced. Listed companies linked to state farm systems across the country are expected to benefit significantly from the reform.
According to a report by Shanghai Securities News, the reform of the state farm system will stimulate the enormous development potential of state-owned state farm enterprises. According to relevant data from the Ministry of Agriculture, China's state farm system has 1,785 state-owned farms, 6.12 million hectares of cultivated land (about 5% of the national cultivated land area), and more than 3,200 state-owned and state-holding enterprises, mainly engaged in agriculture, forestry, animal husbandry, and fishery production, with grain and rubber as the main products. Qilu Securities research believes that if market-based mechanisms can be used to improve the current planned economic system of the state farm system, the resource potential possessed by state farm enterprises will be further released.
From the reform and opening up in 1978 to the Third Plenary Session of the 15th Central Committee in 1998, the central government carried out a series of market-oriented reforms of the state farm system, but the overall process was still slower than that of central enterprises and local state-owned enterprises. First, the vast majority of state farm enterprises were transferred to the management of local state-owned asset supervision commissions, with only the Xinjiang Production and Construction Corps, Guangdong State Farms, and Heilongjiang State Farms remaining under the management of the central government or the Ministry of Agriculture. Second, the separate management of operational functions and social functions was gradually implemented, but at present most grassroots farms still have not completely separated the two types of functions, which is also the crux of the insufficient overall degree of marketization and low operational efficiency of the state farm system.
According to media reports, since July this year, a “Special Research Group on Major Issues in State Farm Reform and Development” composed of central institutions such as the Research Office of the State Council, the Ministry of Agriculture, and the Ministry of Finance has traveled to reclamation areas across the country to conduct surveys, paving the way for the next step of state farm system reform. According to the requirements of State Council leaders, led by the Research Office of the State Council and the Ministry of Agriculture, with the participation of relevant ministries and commissions such as the Central Rural Work Leading Group Office, a total of 8 research groups were formed to go directly to each reclamation area, with the task of conducting research on major issues in national state farm reform and development and advancing the drafting of relevant documents.
The direction of state farm reform includes advancing the shareholding reform of state farm enterprises, developing a mixed-ownership economy, and introducing and utilizing private capital to participate in property rights reform of state farm enterprises. Guosen Securities research believes that land transfer will gradually be taken over by specialized production cooperatives and large agricultural production groups. Large agricultural production groups will, on the one hand, benefit from the scale effect brought by land transfer, and on the other hand, benefit from the improvement in management level brought by state-owned enterprise reform.
Listed companies linked to state farm systems across the country are expected to benefit significantly from the reform. Yasheng Group is a listed company under Gansu Provincial State Farms Group and a pioneer in the state-owned enterprise reform of the state farm system, positioned as Gansu State Farms' land resource management and integration platform. Hainan Rubber is the country's largest natural rubber producer, and the company leases 3.53 million mu of land from its major shareholder Hainan State Farms Group for rubber production. ST Beidahuang is under Heilongjiang State Farms, and Beidahuang has 11.58 million mu of cultivated land and more than 1 million mu of wasteland. At present, the company is actively carrying out asset restructuring, and the next step will be to return to its main business and focus on developing the planting industry well.
From 2004 to 2014, China issued No. 1 Central Documents with the theme of “san nong” (agriculture, rural areas, and farmers) for eleven consecutive years, highlighting the important status of the “san nong” issue in China's period of socialist modernization. This year, central ministries and commissions have intensively conducted surveys of state farm systems across the country and drafted reform documents, and at the central meetings at the end of the year, a state farm system reform plan as well as a series of new policies supporting state farm development will be introduced. Listed companies linked to state farm systems across the country are expected to benefit significantly from the reform.
According to a report by Shanghai Securities News, the reform of the state farm system will stimulate the enormous development potential of state-owned state farm enterprises. According to relevant data from the Ministry of Agriculture, China's state farm system has 1,785 state-owned farms, 6.12 million hectares of cultivated land (about 5% of the national cultivated land area), and more than 3,200 state-owned and state-holding enterprises, mainly engaged in agriculture, forestry, animal husbandry, and fishery production, with grain and rubber as the main products. Qilu Securities research believes that if market-based mechanisms can be used to improve the current planned economic system of the state farm system, the resource potential possessed by state farm enterprises will be further released.
From the reform and opening up in 1978 to the Third Plenary Session of the 15th Central Committee in 1998, the central government carried out a series of market-oriented reforms of the state farm system, but the overall process was still slower than that of central enterprises and local state-owned enterprises. First, the vast majority of state farm enterprises were transferred to the management of local state-owned asset supervision commissions, with only the Xinjiang Production and Construction Corps, Guangdong State Farms, and Heilongjiang State Farms remaining under the management of the central government or the Ministry of Agriculture. Second, the separate management of operational functions and social functions was gradually implemented, but at present most grassroots farms still have not completely separated the two types of functions, which is also the crux of the insufficient overall degree of marketization and low operational efficiency of the state farm system.
According to media reports, since July this year, a “Special Research Group on Major Issues in State Farm Reform and Development” composed of central institutions such as the Research Office of the State Council, the Ministry of Agriculture, and the Ministry of Finance has traveled to reclamation areas across the country to conduct surveys, paving the way for the next step of state farm system reform. According to the requirements of State Council leaders, led by the Research Office of the State Council and the Ministry of Agriculture, with the participation of relevant ministries and commissions such as the Central Rural Work Leading Group Office, a total of 8 research groups were formed to go directly to each reclamation area, with the task of conducting research on major issues in national state farm reform and development and advancing the drafting of relevant documents.
The direction of state farm reform includes advancing the shareholding reform of state farm enterprises, developing a mixed-ownership economy, and introducing and utilizing private capital to participate in property rights reform of state farm enterprises. Guosen Securities research believes that land transfer will gradually be taken over by specialized production cooperatives and large agricultural production groups. Large agricultural production groups will, on the one hand, benefit from the scale effect brought by land transfer, and on the other hand, benefit from the improvement in management level brought by state-owned enterprise reform.
Listed companies linked to state farm systems across the country are expected to benefit significantly from the reform. Yasheng Group is a listed company under Gansu Provincial State Farms Group and a pioneer in the state-owned enterprise reform of the state farm system, positioned as Gansu State Farms' land resource management and integration platform. Hainan Rubber is the country's largest natural rubber producer, and the company leases 3.53 million mu of land from its major shareholder Hainan State Farms Group for rubber production. ST Beidahuang is under Heilongjiang State Farms, and Beidahuang has 11.58 million mu of cultivated land and more than 1 million mu of wasteland. At present, the company is actively carrying out asset restructuring, and the next step will be to return to its main business and focus on developing the planting industry well.