Modern agriculture hits a development bottleneck: grain growers receive 20 for growing grain, 160 for not growing it
Under the combined effect of multiple factors, China's main summer grain-producing areas achieved another bumper harvest this year, ushering in an “11th consecutive increase.” Among them, new agricultural business entities represented by family farms, large grain-growing households, and grain production specialized cooperatives have become an important driving force behind the bumper grain harvest. However, while celebrating the joy of a bumper harvest, many main grain-producing areas report that current agricultural development still faces a series of constraining factors. In particular, as the land transfer process accelerates, the problem of weak infrastructure has become increasingly obvious, bringing great difficulties to intensive grain production. At the same time, in areas such as grain-growing subsidies, rural financing, and agricultural insurance, poor implementation of policies is also widespread.
Reporters recently visited major grain-producing areas in Hubei, Anhui, Shaanxi, Henan, Shandong, and other places to listen to the voices of new business entities. They hope relevant departments will further improve subsidy methods, clarify the policy for mortgaging contract rights, and establish and improve agricultural insurance, so as to encourage the broad masses of grain farmers to grow more grain and grow good grain.
“More than 1,000 mu of land, not a single well”
Multiple new business entities report that current modern agricultural development still faces a series of constraining factors. Among them, weak infrastructure has a huge impact on stable increases in grain output. However, the construction investment involved in roads, water conservancy, and other infrastructure is enormous, making it difficult for them to bear alone.
He Yong, owner of a planting family farm in Yongqiao District, Suzhou City, Anhui Province, said that in recent years governments at all levels have continuously increased investment in infrastructure, improving the needs of agricultural production. As the land transfer process accelerates, new business entities need to purchase large-scale machinery and equipment, such as seeders and harvesters, but the current village-to-village roads are about 4 meters wide, while some agricultural machinery is more than 4 meters wide, making it very difficult to “travel” on the roads. At the same time, due to the lack of necessary land leveling facilities, the land along ditches and roads is uneven, unsuitable for large-scale machinery operation, bringing great difficulties to intensive grain production.
Insufficient water conservancy facilities also pose a test for grain production. Xie Shiying, 53, is a large grain-growing household in Huaibin County, Henan Province, and currently contracts 2,500 mu of cultivated land from two military farms. Old Xie told reporters that farmers often say “whether there is a harvest depends on water.” For large grain-growing households, good infrastructure, especially water conservancy facilities, is equivalent to having a “voltage stabilizer” for grain production, but in reality, in some places this “voltage stabilizer” is not very stable.
“Among the plots I contract, more than 1,000 mu currently do not have a single well, while the other half averages one well per 100 mu.” Xie Shiying said, “Huaibin is in the Huai River basin and was originally a place rich in water resources. But in the past two years the weather has been abnormal; in some years of the dog days, it did not rain for more than two months. How to guarantee water sources for farming in the future is a problem.”
Wang Fujun, a large grain-growing household in Jiaozuo City, Henan Province, introduced that because water conservancy conditions are poor, the rice planting area has been decreasing in the past two years. Near the cooperative where Wang Fujun is located, reporters saw that due to water shortages, some farmers had switched land originally meant for rice to soybean cultivation.
Several heads of new business entities said they suggest integrating projects such as comprehensive agricultural development and land consolidation for high-standard farmland construction, and through forms such as fiscal “reward instead of subsidy,” encouraging new business entities to increase matching fund investment to renovate and upgrade infrastructure in land transfer areas.
“No drying yard, nearly 30,000 less earned from selling grain”
In addition to weak infrastructure, problems such as scarce drying land and outdated drying facilities are also common in major grain-producing areas. The difficulty of getting grain “into the granary, kernel by kernel” has become a constraining “bottleneck” for many grain farmers in developing grain production.
“This year I harvested 14 million jin of wheat, and in autumn I expect to harvest 15 million jin of corn, requiring at least more than 140 mu of drying and storage land. Right now I do not have even one mu, and there is simply nowhere to dry the grain. Any large household with a planting scale of more than 500 mu will face the same problem as me. If this problem is not solved, large households will find it hard to develop grain production with peace of mind.” said Wang Chenggen, who has transferred 13,000 mu of land to grow grain.
Drying difficulties are also a headache for He Yong. He told reporters that because there is no drying yard, he cannot dry grain in a centralized way, and he also fears greater trouble if it rains. Helplessly, sometimes at harvest he sells the grain to brokers right in the fields, at a price more than 1 jiao per jin lower. If he does not sell it in time and piles it in his own warehouse, mildew may occur and losses will be greater. He said that last year he planted 300 mu of corn with a yield of 700 jin per mu, totaling more than 200,000 jin. Because there was no drying yard, he earned nearly 30,000 yuan less from selling grain.
“We have calculated an account: due to inadequate drying and drying facilities, the wheat lost each year on average reaches 5% of the total. In strong autumn rain weather, corn losses are even greater than wheat losses.” said Xiong Xiujie, a large grain-growing household in Xun County, Henan Province.
In response to the problems of grain drying and drying, grassroots suggestions are generally that relevant departments should provide certain support to alleviate drying difficulties, for example by building a batch of grain drying and drying sites in concentrated manner in major grain-producing areas, or promptly including grain drying machinery in the scope of agricultural machinery subsidies, and supporting large grain-growing households in building drying and drying sites to ease their urgent needs.
“Professional information services are basically blank”
Reporters found in interviews that as farmland transfer accelerates, large grain-growing households continue to emerge in various places, but supporting agricultural social services such as agricultural technology extension, agricultural machinery services, pest and disease control, market information, and product marketing have developed relatively slowly. Many large grain-growing households have no choice but to “do everything themselves,” and some even suffer from “take-on-everything syndrome.”
Liu Xueyou, a farmer in Pengdian Township, Xi County, Xinyang City, Henan Province, transferred more than 3,000 mu of land to grow sorghum. He said that sorghum planting has very high requirements for sowing technology and pesticide application, but the county's plant protection cooperative lacks talent. Most hired workers are idle laborers over 55 years old, many of whom do not know how to use agricultural machinery and equipment, and their grasp of pesticide ratios and mechanical spraying is not precise, so pesticide residues often exceed standards. To solve sorghum plant protection problems, Liu Xueyou had to organize a plant protection labor team of more than 20 people himself, and from seedling raising, sowing, field management, harvesting, and storage, “not a single link is omitted,” all requiring him to “personally handle everything.”
“No successors” is the issue that Wang Xia, head of the Qianhe Agricultural Machinery Service Farmers' Professional Cooperative in Zongyang County, Anhui Province, worries about most. He said that machinery operators in the cooperative are generally over 45 years old. Constrained by factors such as reaction speed and agility, they will “retire” after another 5 to 10 years, but someone always has to do this work, and this problem is very thorny.
At the same time, as agricultural marketization continues to develop, large grain-growing households' demand for professional services is expanding from purely production-link services to comprehensive services such as finance, information, processing, and transportation. Compared with mid-production social services such as agricultural machinery and plant protection, the construction of pre-production and post-production service systems appears even weaker.
Wang Fujun, a farmer in Qiaomiao Township, Wuzhi County, Henan Province, transferred 1,700 mu of land and produces more than 3 million jin of grain annually. Wang Fujun said: “What large households care about most in growing grain is professional market information such as grain collection and storage, supply and demand, and grain price trend forecasts, but this service is still basically blank.”
Because the agricultural social service system is not sound, grassroots enthusiasm for using new agricultural technologies is not high. Reporters learned in interviews that although some new agricultural technologies have obvious potential for increasing yield, saving costs, and improving efficiency, they are difficult to promote effectively due to the lack of reward measures from the central to local levels. Dong Jianjun, deputy director of the Scientific Research Office of the Shandong Academy of Agricultural Sciences, said that taking the “wheat ridge cultivation high-efficiency water-saving technology” developed by the Crop Institute of the Shandong Academy of Agricultural Sciences as an example, compared with traditional flat cultivation, it improves wheat yield and the utilization efficiency of water and fertilizer, and reduces production costs. It is suitable for promotion and application in medium- and high-yield irrigated fields in the Huang-Huai-Hai region, but due to the lack of incentive measures, the highest annual promotion area is only more than 1 million mu. The technology's coverage and popularization rate are limited, and new agricultural business entities are not highly motivated to adopt it.
Grassroots suggestions are that a medium- and long-term new professional farmer cultivation plan should be formulated, focusing on professional large households, family farm owners, farmers' cooperative heads, and agricultural machinery operators, and carrying out training in production technology and business management according to the requirements of modern agricultural development. Policies should be implemented such as free enrollment in agriculture-related secondary and higher education programs in planting and breeding, and subsidies for college graduates engaged in modern agricultural entrepreneurship. A support action plan should be launched for college student village officials to start and serve the development of cooperatives, encouraging more young people to devote themselves to modern agriculture.
“A 20-yuan subsidy is no more than a drop in the bucket”
Zhang Zhijuan, chairman of the Huifeng Agricultural Planting Professional Cooperative in Fengxiang County, Shaanxi Province, said that at present the guiding role of various grain planting subsidy policies in encouraging farming has weakened in some places, making it difficult to mobilize grassroots planting enthusiasm, and especially dampening the enthusiasm of new business entities that are the “pathbreakers” in increasing and stabilizing production.
Tong Qiguo, a large grain-growing household in Xinchang Village, Leihe Town, Yicheng City, Hubei Province, welcomed a bumper harvest year this year, harvesting nearly 200,000 kg of wheat from 400 mu of land, nearly 50,000 kg more than last year. “This year the wheat quality was good, and I sold it for 1 jiao 2 fen more per jin, increasing income by 100,000 yuan compared with last year!” He said the state has introduced many policies benefiting farmers, and he has even more drive to grow grain.
This year's No. 1 Central Document proposed improving agricultural subsidy policies, with new subsidies tilted toward important agricultural products such as grain, new agricultural business entities, and main producing areas. “This policy is very targeted, and hearing it really warms the heart.” Tong Qiguo said, but from the current situation, he has not fully enjoyed this preferential policy. Grain subsidies and agricultural machinery purchase subsidies are sometimes available and sometimes not; after land transfer, it is still farmers who transferred land and went to work in cities who receive subsidies, while new business entities cannot get subsidies.
“Not being able to enjoy national grain subsidies is a common phenomenon faced by new business entities, and it certainly affects enthusiasm for growing grain.” Sun Xiancheng, owner of Xiancheng Family Farm in Shou County, Anhui Province, told reporters that the county issued a subsidy policy granting new business entities planting more than 200 mu of land a subsidy of 20 yuan per mu per year, but adding transfer costs, the average annual production cost per mu is nearly 2,000 yuan. A 20-yuan subsidy is no more than a drop in the bucket.
Sun Xiancheng said that within the area he transferred, farmers can receive more than 160 yuan per mu per year in various grain subsidies. “We who actually grow grain receive only a 20-yuan subsidy, while those farmers who do not farm can receive a 160-yuan subsidy. How can this be called encouraging grain growing?”
The interviewed new business entities believe that while stabilizing existing subsidy policies, all localities can add grain-growing subsidies and tilt them toward modern business entities with high grain commodity rates and large social contributions. By increasing subsidies for land transfer and agricultural machinery purchases, they can promote land transfer and the development of social service organizations and achieve scale operation. Sun Xiancheng, Zhang Zhijuan, and others further suggested establishing a performance evaluation mechanism and, based on indicators such as planting scale, operating efficiency, or service quality, rewarding instead of subsidizing new business entities with large social contributions.
“Borrowed 700,000 yuan, interest expenses nearly 100,000 yuan”
Reporters learned through research in multiple places that new business entities have large seasonal funding needs, but because they lack effective collateral, they still face relatively serious financing difficulties.
“The Third Plenary Session of the 18th CPC Central Committee proposed giving farmers the rights to possess, use, profit from, and transfer contracted land, as well as the rights to mortgage and guarantee contracted management rights.” He Yong told reporters that if contracted management rights can be mortgaged, his financing difficulties could hopefully be solved. However, when He Yong went to a bank, the bank still refused him on the grounds that he lacked effective collateral.
He Yong said that last year he invested nearly 1 million yuan in land consolidation and purchasing agricultural machinery. Sometimes he borrowed this money from relatives and friends, and sometimes he could only borrow from private lenders, incurring high interest. “Last year my various loans reached more than 700,000 yuan, and interest expenses alone were nearly 100,000 yuan. Agriculture already has low profits; financing difficulties make profits even thinner.”
The Fuqinxing Agricultural Machinery Professional Cooperative in Fuping County, Shaanxi Province, also encountered similar financing troubles. Song Jingxi, chairman of the cooperative, said that in recent years their cooperative has been providing comprehensive services including unified agricultural input supply and unified grain purchasing to new business entities including family farms and large grain-growing households, but shortage of working capital has become the biggest difficulty facing the cooperative. He said that agricultural inputs including chemical fertilizers and fuel require the cooperative to advance funds first; at the same time, purchasing grain from farmers also requires the cooperative to reserve purchase funds. These funds require about 6 million yuan a year, which for a cooperative with limited strength is equivalent to a huge sum.
Song Jingxi said that because banks and other financial institutions have strict loan conditions, each year he can only apply to banks for loans in his own name with third-party guarantees, and all cooperative operating risks are borne personally, but the funds borrowed are only about 3 million yuan, still short of the cooperative's needs. He suggested that relevant departments should simplify cooperative loan procedures and requirements as much as possible, issue implementation rules for land management rights mortgages, clarify the scope of collateral, and at the same time provide financing channels in the form of laws and regulations to solve the capital bottleneck in the development of new business entities.
Many grain farmers also suggested establishing a loan guarantee support system, incorporating loans to new business entities into the business scope of small and medium-sized enterprise guarantee companies, or separately establishing agricultural guarantee companies to serve agricultural loans; at the same time, referring to the state's subsidized loan policies for other types of enterprises, allowing new business entities to enjoy subsidized loan benefits as well.
“At most 360 yuan compensation per mu, not even enough for land rent”
To solve the problem of relatively high agricultural production risks, in recent years many provinces have piloted policy-based agricultural insurance, which has played the role of a “stabilizer” and “protective umbrella” for agricultural development and has been welcomed by the broad masses of farmers, especially new business entities.
Li Qingwu, head of the Anhui Huaihe Grain Industry Alliance, said that to resist risks, last year he insured more than 2,000 mu of corn and paid more than 10,000 yuan in premiums in total. Due to natural disasters, corn in some farmland decreased by about 30% in yield. After the insurance company conducted on-site surveys and loss assessment, it paid nearly 40,000 yuan, the highest compensation in recent years.
Although some farmers relied on agricultural insurance to reduce planting risks, many large grain-growing households still said that because agricultural insurance coverage is low, its role in resolving risks is relatively limited.
Wang Chenggen told reporters that the premium per mu is 10 yuan, of which the government pays 8 yuan. After a disaster, the maximum compensation per mu is 360 yuan, not even enough to pay land rent. “I plan to raise the premium to 30 yuan and correspondingly increase the coverage amount by two times. But after looking for several years, insurance companies are unwilling to do it; they think the risk is too high and not worthwhile.”
Zhang Mingqin, a large grain-growing household in Huaibin, Henan Province, began contracting land in his hometown in 2012, and the transfer scale has now reached more than 1,300 mu. But he said the local area has not implemented agricultural insurance policies, and this has become a worry for large grain-growing households. “Last year we suffered a severe drought rarely seen in decades. My rice had widespread total crop failure, and I lost more than 600,000 yuan all at once. It took a long time to recover. If there had been agricultural insurance, it would have been much better.”
Wang Chongjie, a large grain-growing household in Puyang, Henan Province, told reporters that for new business entities, agricultural production has now become a “three-high” industry: high input, high output, and high risk. “Some large grain-growing households have been ruined because of natural disasters or seed accidents, and some even committed suicide in despair. This was unimaginable before.”
Li Qingwu, Wang Chenggen, and others said that because policy-based insurance coverage is relatively low, new business entities face great risks in growing grain and still feel somewhat worried about continuing to expand planting scale. To reduce farmers' investment risks, they suggest further expanding the coverage of agricultural insurance and appropriately raising the compensation ratio of insurance, thereby reducing or resolving grain-growing risks and enabling new business entities to grow grain with confidence.