Investing in agriculture requires rationality; do not be superstitious about get-rich-quick myths

"Agriculture is the most profitable industry in the next 20 years," "Investing in agriculture is investing in the future" - recently, such posts have been numerous and popular in WeChat Moments. A remark by the man called world-class investment master James Rogers at a certain forum, truncated and passed through who knows how many hands, has been interpreted into multiple versions and bombarded continuously online, making this author, who has worked in agriculture, rural areas and farmers-related work for many years, and the people around him rather excited, as if they had invested in a potential high-growth stock and were about to see their careers reshuffled and a glorious future unfold.

On the surface, it really seems so. For a very, very long time, any industry or sector connected with the word "agriculture" was, at least in terms of economic returns, always at the lowest level of the industrial chain. Today, however, this traditional impression and positioning is indeed undergoing drastic change. The enormous support and momentum generated by twelve consecutive No. 1 Central Documents on agriculture, rural areas and farmers; the opportunities derived from people's growing attention to food safety; the pastoral nostalgia in urbanites' hearts stirred by the byproducts of industrial civilization; and the value-added potential of agricultural land driven by land system reform - all these are enriching and expanding the connotation of agriculture as never before. What people recognize is not only the value of agriculture, but also its ability to monetize.

Especially under the new economic normal, traditional industries are gradually declining, and a large number of investors are holding money and do not know what to do. At this time, the halo of agriculture shines even more brightly, and more and more voices are guiding them - if you have already missed Chinese real estate ten years ago, then you absolutely must not miss agriculture today! In the next 20 years, the most profitable industry is not real estate, but being a farmer!

But if you really believe that the myth of a certain Cambridge graduate plunging into agriculture can be replicated infinitely, really believe that those business tycoons investing in agriculture all value agriculture's profitability, and really think that agriculture stripped of the lure of land can still be so enormously attractive, then you have truly been led down the wrong path.

Anyone who has studied economics knows that agriculture has typical positive externalities. To put it plainly, it creates enormous benefits and contributions for society, but the people engaged in this industry receive very little in return. It is basic common sense that the characteristics of agriculture determine that it must always face huge natural risks and market risks. Although social progress brings scientific and technological innovation and the use of economic tools, which will continuously reduce such risks, its fundamental attributes cannot be changed. In addition, the lengthy industrial chain makes operating costs hard to control, the mentality of seeking quick success without long-term planning, and the low market entry threshold leading to product homogenization all further intensify such risks.

And if you are someone who does not understand agriculture and rashly rush in simply because you were "fooled" by a few words from a master, you may even end up "entering as Yao Ming and leaving as Pan Changjiang." People say different trades are separated by mountains, but for someone who does not understand agriculture to do agriculture, it is probably separated by a Mount Himalaya.
More importantly, agriculture is a public good, or it can also be called a quasi-public good. Someone once made a very vivid analogy, saying that agriculture does "public work" while industry and commerce do "private work," meaning that industry and commerce are trades that can make money, while agriculture is not an industry in which producers can get rich. In particular, for some bulk agricultural products that bear on the national economy and people's livelihood, their prices must always be subject to a ceiling imposed by various factors. Price increases? Exorbitant profits? Ordinary people cannot bear it, and the government will not agree. The more important a basic industry is, the more it must make sacrifices in profit. This has been true in all times and all countries, without exception.

Then how can capital, technology and talent be attracted to devote themselves to modern agricultural development and realize agricultural modernization? And how can agriculture become a promising industry and farming become a respectable occupation?

There is no need to be pessimistic. The investment master's words are not entirely without reason. Did we not analyze earlier that now is indeed the best time to develop modern agriculture, and that plenty of opportunities are waiting for everyone? However, several points must be emphasized:

First, the characteristics of agriculture determine that its development can never be separated from government support and cannot be operated entirely according to a business model. Under the new economic normal, government finances are tight, but the money invested in agriculture cannot be reduced. Now is the best time, and this opportunity must not be missed.
Second, those investing in agriculture must have a healthy mindset, be prepared for long-term investment, and be able to endure loneliness. Agriculture is the foundation of survival and an eternal sunrise industry, but it offers only stable and reasonable returns. The myth of getting rich overnight is not suitable for agriculture.

Third, one must not scheme after farmers, and especially must not scheme after farmers' land. Agriculture is not real estate and can never become the next real estate. When industrial and commercial capital does agriculture, the profit lies in technology, management and branding, and the path must not be deviated from. Shi Wei