The issue of industrial and commercial capital entering agriculture must be viewed dialectically

To follow the path of agricultural modernization with Chinese characteristics, ensure the effective supply of China's major agricultural products and food security, increase the income of agricultural workers and enhance their well-being, it is necessary, on the basis of stabilizing household contracted operations, to cultivate and develop new types of agricultural business entities. Recently, the Central Committee reviewed and approved the "Opinions on Guiding the Orderly Transfer of Rural Land Management Rights to Develop Moderate-Scale Agricultural Operations," which explicitly set forth the requirement to accelerate the cultivation of new types of agricultural business entities.

I. The Household Contracted Operation System Needs Further Stabilization and Improvement

The core task of China's rural reform is to uphold the household contracted operation system. This reform established farming households as the main entities of agricultural operation, granted farmers long-term and guaranteed land use rights and operational autonomy, and greatly mobilized the production enthusiasm of hundreds of millions of farmers. As determined by the characteristics of agriculture, household operation has always been the foundation and mainstay of agricultural production, which has been proven by the practice of agricultural development both in China and abroad. From a practical standpoint, household operation combined with socialized services can accommodate different levels of agricultural productivity, adapting to both traditional agriculture and modern agriculture, with broad adaptability and strong vitality. There is no issue of having to change household contracted operation once the level of productivity rises.

Under the situation of synchronized development of industrialization, urbanization, informatization and agricultural modernization, household contracted operation also faces new challenges. According to calculations based on data from the Second National Agricultural Census, each agricultural production and operation household can only operate an average of 9.1 mu of cultivated land, and each agricultural worker can only operate 5.2 mu of cultivated land. Thus, if after deducting material costs the annual net income per mu of cultivated land is calculated at 500 yuan, the annual net income of one agricultural worker would be only 2,500 yuan, which is less than the income from working outside for one month. Obviously, such small-scale farming households cannot achieve the goals of increasing agricultural efficiency and farmers' income, nor can they ensure China's food security and make the agricultural operation that farmers engage in a dignified and respected occupation. Household operation is not equivalent to small-scale operation. For China's agricultural production to reach a new level, it is necessary, on the basis of stabilizing household contracted operation, to moderately expand the scale of operation, vigorously cultivate new types of agricultural business entities, and on the basis of maintaining and improving land output, raise the labor productivity of agriculture beyond the individual needs of workers, thus blazing a path of agricultural modernization with Chinese characteristics.

⟦NL> II. Cultivating New Types of Agricultural Business Entities on the Basis of Household Operation

China's rural areas are vast, with natural conditions varying greatly and levels of economic development uneven. This determines that China's new types of agricultural business entities will inevitably present a diversified and mixed development pattern. Specialized large households, family farms, farmers' professional cooperatives, leading agricultural enterprises and various socialized service organizations are all organic components of new types of agricultural business entities, but all types of new business entities have either developed on the basis of household operation or have inextricable links with farming households engaged in household operation. China's rural areas currently have more than 200 million small farming households, and at the same time, nearly 270 million rural laborers have transferred to non-agricultural sectors and are engaged in non-agricultural industries. The main means of production on which they depend for their livelihood is not land. This provides the conditions, on the premise of complying with the law, voluntariness and compensation, for some skilled farmers to take over the management rights of contracted land from those rural residents who have left the land and agriculture, expand the scale of operation, achieve moderate-scale operation, and create an upgraded version of household operation. At present, family farms that use family members as the main labor force, rely on agriculture as the main source of income, and engage in specialized and intensive agricultural production are emerging. There are now 870,000 such farms nationwide, with an average scale of 200 mu. It can be foreseen that family farms will further develop in the future.

With the advancement of land transfer work, a number of farmers' land shareholding cooperatives based on land transfer have been established one after another. This exploration, on the basis of confirming land rights to households, converts farmers' contracted land into shares, and farmers join together to form cooperatives with their contracted land as shares, developing large-scale agricultural operations through self-operation or entrusted operation, with the income distributed according to shares. This form of organization makes the cooperative itself an agricultural enterprise of a certain scale engaged in agricultural production, thereby making farming households the masters (owners) of the enterprise. It not only achieves large-scale agricultural operation and promotes the development of modern agriculture, but also avoids the negative effects that may arise from industrial and commercial capital entering agriculture and large-scale leasing of farmers' contracted land. This is a model on the path of agricultural modernization with Chinese characteristics that is noteworthy and may possess guiding and demonstrative significance.

In recent years, on the basis of rural household contracted operation, operators of the same type of agricultural products or providers and users of the same type of agricultural production and operation services have voluntarily joined together, following the principle of democratic management, to establish various types of farmers' professional cooperatives. At present, the number of registered farmers' professional cooperatives nationwide has reached 1,038,800, with 78.29 million farming households having joined, driving the number of participating households to 30.1% of all farming households nationwide. Farmers' cooperatives are becoming modern agricultural operation organizations that lead farmers to participate in domestic and international market competition, and the basic entities that bring farming households into the market. Farmers' professional cooperatives, together with rural community collective economic organizations, various agricultural socialized service organizations and leading agricultural enterprises, constitute a diversified, multi-level and multi-form operation service system for agricultural production, providing all-round services for household operation, consolidating the foundation of the basic agricultural operation system, and ensuring China's food security.

III. Viewing the Issue of Industrial and Commercial Capital Entering Agriculture Dialectically

In the process of China's transformation from traditional agriculture to modern agriculture, on the basis of household contracted operation by farming households, the entry of industrial and commercial capital or social capital into the pre-production field of agriculture (providing agricultural inputs), the mid-production field (providing agricultural technical services) and the post-production circulation and processing field has always been encouraged and promoted. In agricultural industrialized operation, models such as “company (enterprise) + farming households,” “company (enterprise) + base + farming households,” and “contract farming” reflect practical exploration in this regard. For a long time, in the choice of the path and operation model of agricultural modernization, the focus of debate has been how to view the phenomenon of industrial and commercial capital entering the agricultural production process, leasing large areas of farmers' contracted land, and directly operating agriculture. The "Decision" of the Third Plenary Session of the 18th Central Committee proposed: “encourage and guide industrial and commercial capital to go to rural areas to develop modern crop and livestock farming suitable for enterprise-based operation, and introduce modern production factors and operation models into agriculture.” The "Decision" provides a clear policy orientation for industrial and commercial capital to enter agriculture.

When industrial and commercial capital directly operates crop and livestock farming, it must first properly handle the interest relationship with the vast number of small farming households. The development of modern agriculture cannot ignore the basic agricultural reality that ordinary farming households operating their own contracted cultivated land still constitute the majority. Industrial and commercial capital should drive farmers to develop modern agriculture, not replace farmers in developing modern agriculture; it should create a driving effect for farmers, not a crowding-out effect. Industrial and commercial capital should mainly enter agricultural production links and weak links in industrial development that farming households and farmers' cooperatives cannot handle or cannot handle well, such as developing improved seed and seedling breeding, high-standard facility agriculture, large-scale breeding, and developing rural “four wastelands” resources and other crop and livestock farming suitable for enterprise-based operation, and should pay attention to forming a close community of shared interests with farming households, ensuring that farming households as the main body advance the development of modern agriculture.

To curb the negative effects of industrial and commercial capital entering agriculture and prevent possible tendencies toward non-agriculturalization and non-grainization, first, a strict access system must be established. Localities must set clear upper limits on industrial and commercial enterprises leasing farmers' contracted cultivated land for long periods and large areas, implement tiered filing according to area, and establish and improve qualification review and project review systems. Second, a dynamic supervision system must be established. Relevant departments must regularly carry out supervisory inspections of land-leasing enterprises' agricultural operation capacity, land use and risk prevention capacity, verify land use and contract performance, and promptly investigate and correct illegal and irregular acts such as wasting farmland resources and changing farmland use. Third, post-event supervision must be strengthened, and a risk guarantee fund system must be established to prevent harm to farmers' land rights and interests and prevent contracted farming households from suffering losses due to default or poor management by the transferee.

The development of large-scale market-oriented and commercialized agriculture requires extending the agricultural industrial chain and promoting the organic integration of the primary, secondary and tertiary industries. This involves the issue of quotas for non-agricultural construction land. The reasonable demands of industrial and commercial capital and other new types of agricultural business entities after entering agriculture should be satisfied. The 2014 No. 1 Central Document proposed: “in the national annual construction land quota, a certain proportion shall be separately allocated specifically for new types of agricultural business entities to build supporting auxiliary facilities.” This policy remains to be implemented by local governments. Regarding the business activities of industrial and commercial capital directly entering the agricultural production field to lease large areas of farmers' contracted land, the behavior of operators should be regulated and their lawful rights and interests protected. However, given China's national conditions of abundant population and scarce land, this model should not become the mainstream of farmland operation models.

In the future development of China's agriculture and rural areas, it is necessary to uphold the foundational position of household operation in agriculture, promote innovation in various forms of agricultural operation, vigorously cultivate and support diversified new types of agricultural business entities, develop moderate-scale agricultural operations, and blaze a path of agricultural modernization with Chinese characteristics.