How can agriculture's weak links be shored up? The key lies in adjusting the supply structure

The Central Rural Work Conference held recently explicitly proposed that during the “13th Five-Year Plan” period, we must effectively stretch the “short leg” of agriculture in the “synchronous development of the four modernizations” and shore up the “weak link” of rural areas in building a moderately prosperous society in all respects. At present, agriculture faces many contradictions and difficulties, with different “symptoms,” but the “root cause” lies in structure. Only by adjusting the agricultural structure and improving the effectiveness of agricultural product supply can we promote quality improvement and efficiency enhancement in China's agriculture and fundamentally solve the difficulties in agricultural development.

The concept of “supply-side structural reform in agriculture” was proposed for the first time at this conference. China's grain production achieved a “twelfth consecutive increase” this year. Behind this encouraging result, the scale of grain imports this year may once again set a record, and the domestic grain stockpiles purchased and stored under the support price system also remain at a high level, showing the strange phenomenon of simultaneous increases in production, imports, and inventories, which also reflects the complexity of the current agricultural situation.

In addition, China's agricultural production is also facing new challenges such as the “ceiling” cap on agricultural product prices and the rising “floor” of production costs. In the past, agricultural development placed too much emphasis on quantitative growth, leading to excessive consumption of soil fertility and groundwater resources. These hard constraints on resources and the environment have intensified risks. More importantly, only six years remain to achieve complete poverty alleviation according to the timetable. As it becomes normal for farmers to have difficulty selling grain and earn low incomes from grain cultivation, next year, as the opening year of the “13th Five-Year Plan,” will see unprecedented pressure for agricultural reform.

Against this background, this year's Central Rural Work Conference put structural adjustment first. The conference emphasized the need to improve the quality and efficiency of the agricultural supply system, ensure that the quantity of agricultural product supply is sufficient, and that varieties and quality meet consumer needs, truly forming an effective supply of agricultural products with a reasonable structure and strong safeguards. At present, great importance must be attached to reducing inventories, lowering costs, and shoring up weak links. Safeguarding national food security is the basic bottom line of agricultural structural reform. It is necessary to protect staple grains such as rice and wheat, protect cultivated land, protect production capacity, and protect grain production in major producing areas, especially core producing areas, to ensure that grains are basically self-sufficient and staple grains are absolutely safe.

Since the reform and opening up, China's agriculture has undergone three major structural adjustments. In the early 1980s, the agricultural market circulation system and mechanisms were established; in the late 1990s, emphasis was placed on increasing the supply of cash crops; and in 2003, policies and measures to support grain development were formulated. The goal of the current round of structural adjustment is to build the industrial system, production system, and operation system of modern agriculture.

It should be noted that the various forms of appropriately scaled agricultural operations emerging across the country will become the main direction of this reform and will provide direct impetus for agricultural structural reform. Over the past few years, as rural land property rights relations have been further clarified, the total area of transferred rural household contracted cultivated land nationwide has exceeded 30%. New types of agricultural operating entities such as large growers and breeders, family farms, farmer cooperatives, and leading enterprises in agricultural industrialization have emerged one after another and have gradually become a vital force in modern agricultural construction. It can be said that these new types of agricultural operating entities will become the source of momentum for advancing agricultural specialization and transforming the agricultural development model in the future.

As the scale of operations expands, new operating entities will also have correspondingly higher demand for capital turnover, mortgage guarantees, and other needs. Therefore, in terms of policy, more national preferential agricultural policies need to shift from broad-based benefits to new operating entities. For example, further improve fiscal and financial support policies to reduce agricultural investment risks; change the method of fiscal subsidies, reduce the proportion of direct subsidies, and improve the effectiveness of agricultural subsidy policies; increase the openness of financial markets, and use methods such as discounted loans to promote the channeling of financial resources toward new agricultural operating entities.