How to Solve the Problem of Increasing Farmers' Incomes? A Full Analysis of Practical Methods
Recently released statistics show that farmers' income growth, which had already achieved "twelve consecutive years of rapid growth," is also facing downward pressure. In the first half of this year, the national per capita disposable income of farmers grew by 8.9% year-on-year in nominal terms, and by 6.7% in real terms after deducting price factors. This is the smallest real growth rate since 2004; in the same period of the previous 12 years, the real growth rate was above 8%, and this year it fell below 7% for the first time. This is a signal worthy of great attention. With migrant worker employment tightening and agricultural product prices sluggish, how can new momentum be found for the sustained increase of farmers' incomes?
With this question in mind, we recently went to Shandong Province, focusing on Weifang City and Jinan City, to conduct a survey on the development of new rural industries and new business forms and their effects on increasing farmers' incomes. We successively visited Shouguang City, Hanting District, Xiashan District, and Qingzhou City in Weifang City to inspect a seed industry R&D center, Zhongbai Big Kitchen, a greenhouse production area, a flower industrial park, and an agricultural science and technology incubator, among others; and we visited Zhangqiu City in Jinan City to inspect a grassroots supply and marketing cooperative and a modern agriculture park. We held discussions with rural cadres, farmers, and enterprise operators, and exchanged views with the main leaders and responsible leaders of the Shandong Provincial Party Committee. The overall impression is that Shandong Province treats cultivating new rural industries and new business forms as a strategic measure for transforming the agricultural development model and advancing agricultural supply-side structural reform, builds a modern industrial system featuring cross-sector integration of agriculture with the secondary and tertiary industries, stimulates rural development vitality, improves agricultural production efficiency, and truly opens up new paths for increasing farmers' incomes.
I. Four Approaches to Integrated Rural Industrial Development
The "Zhongbai Big Kitchen," located in Weifang City's "China Food Valley," is a model of integrated development of the three industries. Walking into the workshop of "Zhongbai Big Kitchen," what comes into view are boxes of washed and packaged fruits and vegetables ready for shipment, while several production lines are separately processing various cooked foods and pastries. This 60,000-square-meter processing area, including vegetables, fruits, dried goods, cooked foods, pastries, and soy products, is linked upstream to 37 vegetable bases in Weifang's various counties and districts and surrounding counties and cities, as well as 29 fruit bases across the country, and downstream to more than 600 directly operated and chain stores, online delivery of "home-delivered meal packages," and online sales of agricultural products through Jialejia Mall. There are more than ten similar enterprises in Weifang City.
This is a microcosm of Shandong Province's cultivation of new rural industries and new business forms. Over the past two years, Shandong Province has relied on agriculture as its foundation, taken market demand as its guide, and used institutional, technological, and business model innovation as its driving force to promote integrated industrial development, expand the multiple functions of agriculture, and give rise to many new rural industries and new business forms. Comrades in the province introduced that they mainly have 4 approaches in this regard.
First, adhere to the "restructuring of the three chains" to lead the development of the "new sixth industry." Shandong Province is committed to the "restructuring of the three chains" of the industrial chain, value chain, and supply chain. That is, the industrial chains are added together, with the focus on industrial upgrading, namely the primary industry connects to the secondary and tertiary industries and extends backward; the secondary industry connects to the primary and tertiary industries and extends in both directions; the tertiary industry connects to the secondary and primary industries and extends forward. The value chains are multiplied, with the focus on improving quality, increasing efficiency, and raising incomes, namely one share of income from the primary industry is increased to two shares through the secondary industry, and then forms triple benefits through the tertiary industry. The supply chains are interconnected, with the focus on reducing costs, increasing vitality, and achieving sustainability, namely direct docking between production and sales, reducing circulation links, and saving circulation costs.
Second, highlight "two bright spots" to activate the development of the "new sixth industry." The bright spots are rural e-commerce and rural tourism. At present, 40 counties across the province have signed contracts to operate rural Taobao projects, building more than 1,500 village-level service stations. Last year, the province's agricultural product e-commerce transaction volume was about 45 billion yuan, an increase of more than 30%. Rural tourism has shown a booming trend; in the first half of this year, rural tourism revenue reached 95 billion yuan, a year-on-year increase of 29%. There were 64,000 operating households, absorbing and placing 315,000 people in employment.
Third, rely on the "three major carriers" to drive the development of the "new sixth industry." That is, through beautiful villages, characteristic towns, and agricultural parks, gather the factors for the integration of the primary, secondary, and tertiary industries. At present, the province has 81 agricultural high-tech industrial parks.
Fourth, strengthen the "three major entities" to leverage the development of the "new sixth industry." At present, the province's family farms have grown to 47,000, farmers' cooperatives to 159,000, and leading enterprises above designated size to more than 9,300. New types of business entities have played the leading role of "being the first to eat crabs." At the same time, Shandong Province has introduced a series of support policies in fiscal input, land circulation, financial innovation, scientific and technological support, and farmer training, creating an environment and providing assistance for building new rural industries and new business forms.
II. Two Keys and Four Forms of Integrated Rural Industrial Development
Shandong comrades often say that to understand Shandong agriculture, look at Weifang. Weifang City ranks first in the province in total agricultural output value, with vegetable and meat exports accounting for 1/10 and 1/8 of the national total, respectively. Weifang City is also a place that produces experience in agriculture. In the 1990s, it was the first in the country to breed the prototype of agricultural industrialization, and the enduring Shouguang vegetable greenhouses are even more renowned far and wide. Today, Weifang City's practice of cultivating new industries and new business forms has made us realize that for the integrated development of the primary, secondary, and tertiary industries, it is necessary to firmly grasp the two keys of "upgrading all links and increasing value across the entire chain."
"Upgrading all links" means using new concepts, new technologies, and new equipment to transform and upgrade traditional industries, injecting modern management, scientific and technological, and managerial factors into all links such as soil, fertilizer, water, seeds, and pesticides, as well as the entire process of production, processing, and sales, so that traditional industries are thoroughly transformed. Shouguang City's vegetable industry is a model; from soil to greenhouses, all are being transformed and upgraded. In the past, due to excessive fertilization and years of continuous cropping, greenhouse soil showed phenomena such as decreased organic matter content, secondary salinization, and worsening soil-borne diseases. Starting in 2011, Shouguang City invested 40 million yuan to improve all 280,000 mu of soil requiring improvement in the first round by vigorously promoting technologies such as microbial bacterial fertilizer, high-carbon organic fertilizer, integrated water and fertilizer management, and soil testing and formula fertilization. Soil organic matter content increased by more than 0.8 percentage points, vegetable output increased by more than 10%; fertilizer application decreased by more than 40% on average, pesticide application decreased by more than 25% on average, and water use decreased by more than 50%, achieving water saving, fertilizer saving, pesticide saving, and efficiency improvement. This year, Shouguang City has carried out the "two transformations" of converting open fields to greenhouses and old greenhouses to new ones. At present, 18,000 mu of the "two transformations" have been completed, involving more than 2,600 greenhouses. Compared with traditional greenhouses, the fifth-generation new-style greenhouses have a larger area, higher frames, thinner walls, lower soil layers, better lighting, smoother ventilation, and more advanced equipment. Land utilization rate and labor productivity have both been improved, and vegetable output and quality have also risen accordingly.
"Increasing value across the entire chain" means that the three chains of the primary, secondary, and tertiary industries all increase in value simultaneously in integrated development, rather than only the primary industry's primary products increasing in value when they reach the secondary industry chain, and only the secondary industry's processed products increasing in value when they reach the tertiary industry chain. Only in this way can the three industries form vertically integrated development in integration, and only in this way can farmers share more of the value-added benefits of the secondary and tertiary industries. How can value increase across the entire chain be achieved? We found the answer at Youwo Organic Agriculture Co., Ltd. in Xiashan District, Weifang City. Youwo Company is a new type of business entity transformed from an IT company to develop organic agriculture. The project plans to build a 5,000-mu organic vegetable and organic rice planting demonstration zone; 600 mu have now been built, of which 400 mu are organically certified, with 94 types of organically certified vegetables, and it has passed organic certification by the United States (USDA) and Canada (CAAQ). They have achieved value increase in all three chains. First, what to grow? They grow organic vegetables and rice; even selling these primary products alone makes them more valuable than ordinary products. Second, what to process? They process primary organic products into food ingredients, gaining value-added in processing. Then, what to sell? They build the market brand "Organic Hub" and, through the membership system channel, provide customers with "one-stop household organic ingredient service." What they sell is the brand and also the service, and the value-added effect is very obvious. "Upgrading all links" and "increasing value across the entire chain" integrate and promote each other; "upgrading all links" is the foundation, and "increasing value across the entire chain" is the goal.
We further considered: in what industrial forms is industrial integration embodied? Based on surveys in Weifang and other places, we initially feel that at present there are at least terminal-oriented, experience-oriented, circular, and smart forms. These four industrial forms have already broken through the soil and become effective carriers of industrial integration. The terminal-oriented form takes the terminal consumption demand for agricultural products as its guide and arranges the entire process of the primary, secondary, and tertiary industries in reverse, so that all links of agricultural production, processing, and distribution fit consumer demand. Zhongbai Big Kitchen and Youwo Organic Company have achieved seamless docking of agricultural products from field to table and from primary products to terminal consumption. The experience-oriented form means tapping and expanding the multiple functions of agriculture, promoting deep integration of agriculture with tourism, education, culture, health and elderly care, and other industries, so that consumers can achieve participatory experience through sightseeing, leisure and wellness, social practice, and farming culture education. Shandong Province's large number of farm stays, picking gardens, and happy farms are such experience venues. The circular form can also be called the ecological form. At present, some places use circular agriculture as a channel for industrial integration, promoting the reciprocal and efficient flow of various agricultural resources, achieving multiple effects such as energy saving and emission reduction, ecological environmental protection, and improved economic benefits. The smart form means introducing modern information technologies such as the internet, internet of things, cloud computing, and sensors into all links of agricultural production, processing, and marketing, and implementing intelligent perception, early warning, analysis, decision-making, and control over the entire process. In Panjia Daozhuang, Shouguang City, we visited "smart vegetable greenhouses" one after another. A complete set of intelligent facilities monitored changes in humidity, temperature, light, ventilation, and other conditions in real time and carried out care activities such as automatic irrigation, cooling, ventilation, and fertilization. The greenhouse owner could operate remotely with just one mobile phone, greatly saving labor, manpower, and working time.
Of course, the above four forms of industrial integration are generally initially divided according to their respective production forms and industrial functions. In the rich practice at the grassroots level, there are both single industrial forms and mixed forms. The Qingzhou (International) Flower Industrial Park in Weifang City and the Zhangqiu Modern Agriculture Demonstration Park in Jinan City that we inspected both have the functions of leisure, experience, and sightseeing, and are also providing terminal products such as flowers and food for sale. They can be said to be a comprehensive integration of the terminal-oriented and experience-oriented forms.
III. It Is Necessary to Position, Diagnose, and Support Industrial Integration Development Well
Through on-site investigations of the development of new industries and new business forms in Weifang and Jinan, we feel there are several insights as follows.
First, strategically "position well" industrial integration development. Judging from the momentum of Shandong Province in promoting integrated industrial development and the enthusiasm of farmers for new industries and new business forms, the integrated development of rural primary, secondary, and tertiary industries may give rise to another historic transformation in China's agricultural and rural development. We feel that this may be another great creation of Chinese farmers after the "household contract responsibility system," township enterprises, and migrant workers entering cities. It is very likely to once again inject new and powerful momentum into agricultural and rural development, making agriculture and rural areas truly a vast world where much can be accomplished. In the long run, whether industrial integration development, which is emerging like bamboo shoots after a spring rain and growing vigorously, can similarly create historical miracles requires further observation and judgment in the future. But from the current perspective, new industries and new business forms that have already taken root, sprouted, bloomed, and borne fruit in rural areas across the country can indeed enable factors to be allocated efficiently among industry and agriculture, urban and rural areas, and industries; the industrial chain and value chain extend vertically and horizontally in integration; the production methods, business methods, and organizational methods of agriculture undergo profound changes; and new momentum and new space are injected into agricultural and rural development. What is striking is that the integration of the three industries has an obvious effect on increasing farmers' incomes, directly reflected in the growth of net operating income. In the first quarter of this year, the per capita disposable income of farmers in Weifang City reached 5,222 yuan, of which wage income grew by only 4.4%, while net operating income grew by 19.9% (far higher than the national level of 9.2% in the same period), the highest for the same period in recent years. In recent years, increases in farmers' incomes have largely relied on the relatively rapid growth of wage income. Under the current situation of tightening migrant worker employment and downward pressure on farmers' incomes, industrial integration development is becoming a new growth point for increasing farmers' incomes. As a grassroots cadre said, industrial integration development is very likely to become the "golden key" to solving the difficulty of increasing farmers' incomes. We should guide according to the situation and act in line with the trend, taking the promotion of industrial integration development and the cultivation of new rural industries and new business forms as major strategic measures for advancing agricultural modernization, new urbanization, and urban-rural integration.
Second, tactically "diagnose the pulse" of industrial integration development well. Weifang City, which bred the prototype of rural industrialization, is now also doing brilliantly in rural industrial integration. Then, what is the difference between industrial integration and the agricultural industrialization we often spoke of before, and what exactly is the relationship? We feel that industrial integration and agricultural industrialization are two different concepts and two different forms. To make a simple metaphor, industrialization is putting the three "eggs" of the three industries in one basin, next to each other and linked to each other, forming linked development; industrial integration is not only putting the three "eggs" in one basin, but also breaking and stirring them evenly so that they are completely integrated together, with each containing the others, forming integrated development. Therefore, industrial integration is a high degree of integration among industries, not simple combination; it is organic blending, not ordinary intersection. We have experienced this truth from grassroots and mass practice, and it seems necessary in the future to explain it clearly to more cadres and masses. Industrial integration cannot simply be regarded as a "reprint" of agricultural industrialization, but should be regarded as an "upgraded version" of agricultural industrialization. We can further understand the connotation and extension of industrial integration from several aspects. From the perspective of boundaries, integration makes it hard to distinguish the original boundaries among industries, hard to distinguish which is agriculture, which is industry, and which is services. In blending, the three industries seem neither present nor absent, coexisting and sharing together. This is the reason why integrated industrial development is called the "sixth industry." From the perspective of sequence, there is no division into three periods and no order of priority; it is hard to distinguish which period is for production and which period is for processing. Often the three industries start simultaneously and evolve simultaneously. From the perspective of space, integration binds factors together, and the degree of agglomeration is quite high. It is hard to distinguish which area is for planting and breeding and which plot is for processing and sales. Sometimes the production site is also the processing workshop and still the sales platform. From the perspective of relationships, the three industries rely on each other and are mutually causal. The development of any one industry takes the existence of the other as a necessary condition; otherwise, the effect is greatly reduced.
To promote the healthy development of industrial integration, there is the question of who will do it and who will play the leading role, which must also be clarified and grasped accurately. Industrial integration development has high benefits and good prospects, and industrial and commercial capital is enthusiastic. At present, quite a lot of industrial and commercial capital and social funds have already entered this field and achieved initial results. Industrial integration cannot do without the participation of industrial and commercial capital, or even its guiding role, but proceeding from China's specific national conditions and agricultural conditions, it needs to be made clear that industrial integration development should even more be done by farmers themselves, with farmers playing the leading role, so that farmers can more directly create and share the value-added benefits of the industrial chain and value chain. How should farmers do it themselves? It is necessary to cultivate diversified business entities, with the core being family farms, cooperatives, and leading enterprises in which farmers participate as shareholders. Industrial integration must be guaranteed by a certain degree of organization; sometimes it is difficult for individual households to accomplish it. From Shandong's experience, we can see that cooperatives are the most effective organizational form for leading the masses into the field of industrial integration. Industrial integration requires a certain scale of land, so land cooperatives come into use. It requires financial support, and mutual fund organizations run within cooperatives can play a role.
Third, in terms of policy, "add strength" to industrial integration development. From the survey situation, accelerating the cultivation of new rural industries and new business forms and promoting industrial integration development is a major measure for advancing agricultural supply-side structural reform and also a new driving force for promoting sustained and relatively rapid increases in farmers' incomes under the new situation. New rural industries and new business forms are new things developed on the basis of "Internet Plus." Although a number of typical examples have emerged in various places, indicating a bright and beautiful prospect, to turn these beautiful bonsai into a splendid landscape and make sparks start a prairie fire across the vast countryside, various entrepreneurial and operating entities still need to ride the waves forward in the tide of the market economy, and governments at all levels also need to add fuel and strength for them. What the government should do is not "build greenhouses" or "make bonsai," but create a good social atmosphere and a fair competitive environment, so that enterprises innovating and starting businesses in rural areas can enjoy the same policies as those in cities, and solve urgent difficulties in land use, financing, talent, infrastructure, and other aspects.
First, solve the land use problem. For a long time, annual construction land quotas have been difficult to allocate to rural areas, and construction land obtained from rural land consolidation and village renovation has also entered cities through "increase-decrease linkage" quotas, forming the strange cycle that rural land is difficult for rural areas to use. For new industry and new business form projects to land in rural areas, the construction land problem must first be solved. It may be considered to set a certain proportion of the annual construction land plan quota specifically for the development of new rural industries and new business forms. At the same time, allow rural construction land saved through village renovation and homestead consolidation, among others, to prioritize guaranteeing land for the development of new rural industries and new business forms through land shareholding and public transfer.
Second, solve the financing problem. This is a long-standing difficult problem encountered in starting businesses and running enterprises in rural areas, and the root cause is the lack of effective collateral. It may be considered to solve the financing problem for the development of new industries and new business forms through a "three rural" financing guarantee system supported by governments at all levels, or by giving play to the leverage role of fiscal funds through establishing funds, interest subsidies, and guarantees.
Third, solve the talent problem. The development of new rural industries and new business forms and industrial integration require a large number of cross-sector talents, urgently requiring greater efforts in talent cultivation. The immediate task is to accelerate the innovation of the talent cultivation system, improve the skills training mechanism, solve the problem of training and demand being "two separate skins," gradually make enterprises the main body of skills training, and have the government provide certain support through methods such as purchasing services and post-event subsidies.
Fourth, solve the infrastructure problem. Rural tourism and rural e-commerce are currently the most dynamic new rural industries and new business forms, with very obvious effects on increasing farmers' incomes. It may be considered to further increase support for infrastructure construction so that these two new industries and new business forms can develop faster. For example, study implementing a free Wi-Fi (wireless networking) project in key rural tourism areas, further advance broadband into rural areas and scenic areas, and, referring to the practices and experience of some regions, within the strategic framework of "Broadband China," accelerate the construction of wireless networking facilities in key rural tourism areas to provide free Wi-Fi to rural tourists.