How Capital Adapts to Agriculture's Slow Logic

Can a giant accustomed to rapid expansion adapt to the slow logic of agricultural production, and can it settle into the low-return norm of agriculture and return to a quiet, detached state of mind? Only time will tell.

Recently, the capital tentacles of the well-known real estate enterprise Evergrande Group extended into the agricultural sector, launching three major groups with great fanfare - grain and oil, dairy, and animal husbandry - and at the same time holding an unprecedentedly grand order conference. It is reported that it plans to invest more than 100 billion yuan to build a Chinese national agricultural brand.

In fact, Evergrande's cross-sector investment in agriculture has its reasonable logical explanation. Food is the first necessity of the people, and as a populous country, China has a huge rigid demand for agricultural food, an industry fully capable of absorbing the tens of billions of capital investment from a real estate tycoon. Moreover, China's modern agriculture development lags behind. Although urbanization reform has opened a window for revitalizing rural land resources and promoting the transformation of traditional agriculture, bottlenecks in factors such as capital, talent, technology, information, and concepts still constrain the pace of modern agriculture development, and this situation has also created a good opportunity for capital to "buy in at the bottom."

Especially in the context of increasingly intensified dependence on grain imports and widespread concern over food safety issues, agricultural products launched with great fanfare carrying "green" and "organic" health concepts have stolen a march on others, transplanting the national brand image established in the market at an earlier stage into a new field, and the scale effect of a diversified industry is beginning to show. In this regard, strong capital strength and marketing promotion capabilities have laid the foundation for Evergrande to enter modern agriculture, and this move also timely caters to the current real needs of agricultural transformation and development.

But it must be mentioned that in China, agriculture has never been a hugely profitable industry; on the contrary, it is a relatively fragile field. Not only is the industry itself highly susceptible to various natural factors such as floods and cold waves, but even high-tech modern agriculture cannot fully cope with these risks.

In addition, agricultural investment must follow the objective laws of plant growth and cannot produce a get-rich-quick effect like real estate development. And once a company grows into a multinational agricultural giant, it must also constantly guard against grain price fluctuations caused by social factors such as adjustments in import and export policies of various countries, exchange rate changes, and population growth changes. Any management oversight or forecasting error could deal a fatal blow.

In short, China's modern agriculture does indeed need the involvement of large capital, but whether a giant accustomed to rapid expansion can adapt to the slow logic of agricultural production, whether it can settle into the low-return norm of agriculture, return to a quiet, detached state of mind, and become an evergreen tree in the agricultural field, only time will tell.