How can we mobilize more social capital to support the ecological transformation of agriculture?

The 2010 Central Document No. 1 explicitly mentioned the need to establish an agricultural industry development fund, support the development of leading agricultural enterprises, and explore innovation in the rural financial system. Before the issuance of Central Document No. 1, the relevant central departments, including the Central Rural Work Leading Group Office, the National Development and Reform Commission, the Ministry of Finance, the People's Bank of China, and others, went through nearly 4 years of repeated deliberation and consideration, and solicited opinions from all sides, and only then was this matter explicitly confirmed in Central Document No. 1. So the gestation period was very long. After Document No. 1 was issued, the State Council instructed the Ministry of Finance to take the lead in establishing this fund. After nearly a year of preparation, the fund was officially registered and established at the end of 2012.

In accordance with the requirements of the State Council, the fund should truly play an exploratory role in advancing the process of agricultural modernization, truly introduce capital, technology, and management experience through market-oriented means, and at the same time mobilize more social capital to invest in the “three rural issues” sector, improve the efficiency of agricultural development, ensure that capital investment generates corresponding output, and improve the efficiency and effectiveness of limited fiscal fund investment.

First, invest in the agricultural sector, mainly through equity investment, investing in leading enterprises in agricultural industrialization. The agricultural sector includes the agricultural circulation sector, agriculture-related guarantees, and agricultural insurance companies; as long as it is agriculture-related, the fund only takes a minority shareholder position. In the agricultural sector, we possess abundant project pipeline resources, including the Agricultural Development Bank of China and the Agricultural Bank of China, both of which are agriculture-related financial institutions, so their clients include a considerable number of agriculture-related enterprises.

Second, the fund invests in and cultivates leading enterprises in agricultural industrialization, focusing on selecting good candidates, focusing on the development potential of enterprises, and mainly looking at the uniqueness, forward-looking nature, and novelty of the project as well as its ecological technology support. The core is to be optimistic about the leader; the core element of our investment is still people, and also what they do.

Third, focus on specialty agriculture and ecological agriculture. In the process of promoting the transformation of traditional agriculture into modern enterprise development, our main direction is not traditional basic agriculture. In this regard, the fund and the government have a moderate division of labor: government departments, such as the Ministry of Agriculture, the agricultural departments of the Ministry of Finance, and the Comprehensive Agricultural Development Office, etc., are mainly responsible for basic agriculture, including the construction of farmland water conservancy infrastructure, and so on, which indeed requires a large amount of public fiscal subsidies. From the fund's perspective, doing basic agriculture is unrealistic, so the fund focuses on specialty agriculture, the government focuses on basic agriculture, and the fund cannot overstep its role, but it must fully rely on the government and strive for government support.

At present, there are still some problems in China's agricultural sector, especially the issue of sustainable agricultural development. For example, the issue of the farmland red line and the weak risk resistance capacity in the agricultural sector. For this reason, I believe that developing modern agriculture requires effort and great exertion to change the status quo. The existing problems require all parties, including the government level, enterprises themselves, and also investment institutions like us, scientific research departments, and even the media, to work together to solve them. As for the future direction of China's agricultural industrialization development, my preliminary consideration is that through the state's sustained and continuous policy support, sufficient capital supply, and the guarantee of technical talent, we should take the path of intensification, scientificization, and marketization to achieve the ecological transformation of agriculture.