Institutional reform on the agricultural supply side deserves attention

The "structural reform of the agricultural supply side" proposed in the 2016 No. 1 Central Document is the implementation in the agricultural field of the supply-side structural adjustment and reform discussed at the 2015 Central Economic Work Conference, and it is highly targeted. To solve the various supply-side problems in our country at the present stage, we must not only pay attention to supply-side structural adjustment, but also pay attention to supply-side institutional reform, and organically combine the two, so as to address both the symptoms and the root causes of supply-side problems.

At present, the structural adjustment and reform of our country's agricultural supply side needs to highlight reform-driven and strategic structural adjustment; it is necessary not only to organically combine government administrative promotion with reform-driven momentum, but also to organically combine the current "de-stocking, cost reduction, and weakness remediation" strategy of agricultural supply-side structural adjustment with strategic structural adjustment of agriculture; and to focus on handling well the relationship between government guidance and market leadership, aiming to establish a "four-in-one" governance framework for the agricultural supply side featuring government guidance, market leadership, industry coordination, and farmers (enterprises, cooperatives) as the main actors, so that our country's agricultural supply-side structure and system can adapt as quickly as possible to the needs of globalization, marketization, and modern agricultural development.

As far as the current reform of our country's agricultural supply side is concerned, the focus should be on advancing reform in the following three areas.

First, advance reform of the agricultural regulation system and optimize the governance structure of the agricultural supply side. Through the further transformation of government functions and reform of the performance evaluation system, the basic role of the market in regulating the relationship between supply and demand and in guiding operator behavior should be effectively brought into play. At the same time as government functions are transformed, cross-regional agricultural industry organizations should be accelerated through empowerment and capacity expansion, so that industry organizations can truly play their role in capacity control, supply adjustment, orderly competition, quality monitoring, brand building, information services, price coordination, trade promotion, and other aspects, and a "four-in-one" agricultural supply-side governance structure with clear responsibilities and complementary functions among government, market, industry, and industry operating entities should be established.

Second, advance reform of the agricultural operation system and raise the operational level of the agricultural supply side. The entire agricultural industry chain has many links and many forms, and spans the primary, secondary, and tertiary industries, so it is often difficult to manage with a single operating system or a single organizational model. Therefore, through reform of the agricultural operation system and optimization of the organizational system, the respective functions and institutional advantages of farm household operation, farmer cooperative operation, enterprise corporate operation, and industry self-coordination must be fully brought into play. On this basis, the organic combination and integrated innovation of these operating systems and their organizations should also be promoted, forming a "four-in-one" modern agricultural operation system of household operation, cooperative operation, corporate operation, and industry coordination, so as to advance multi-type appropriately scaled agricultural operation and diversified, specialized services, and improve the degree of industrial integration, the level of industrialized operation, and the efficiency of vertical integration on the agricultural supply side.

Third, advance reform of the agricultural factor system and improve the allocation efficiency of the agricultural supply side. First, the property rights system for rural land and ecological resources is imperfect, leading to insufficient market trading and market allocation capacity for land and ecological resources. Second, farmers' social security and property rights and interests are incomplete, leading to poor mobility of the agricultural and rural labor force and distortions in the formation of labor prices. Third, the lag in financial marketization and the incompleteness of farmers' property rights also lead to difficulties for farmers in agricultural credit, mortgage, and insurance. The lag in the marketization of agricultural production factors reduces the allocation efficiency of factors in space and in the industrial chain. For this reason, it is necessary to accelerate reform oriented toward the marketization of production factors, with the focus on further advancing reform of the rural land property rights system, the farmers' housing system and social security system, and the rural financial system, granting farmers more property rights and factor operating rights, and improving the market's capacity and efficiency in allocating production factors on the agricultural supply side.