Agricultural economic development needs to focus on the supply of agricultural products_ agriculture_ 5830 Agricultural URL Navigation

Jindi Agriculture has excerpted the excellent speech by Zhang Hongyu, Director of the Department of Industrial Policy and Regulations of the Ministry of Agriculture, at the forum:

In agriculture, while analyzing the current situation we face in agriculture and some of its characteristics, what key issues should our agriculture and rural economy focus on during the "12th Five-Year Plan" and even for a longer period in the future? How are these key issues closely related to all of you? I think there are seven or eight issues that need high attention.

One, from 1978 to 1998 over a span of 20 years, we have reached four steps in grain production. During the same period, our arable land and sown area decreased by 1.02 billion mu. That is to say, during that period, our main reliance was on the increase in yield per unit area, which increased by an average of 2.98% each year, with nearly a 3% increase in yield per unit area each year. From 1998 to now, especially in the first ten years of the "11th Five-Year Plan", namely 2006, 2007, 2008, and 2009, our grain yield per unit area has improved, but the contribution rate of the grain sown area is as high as 46%. That is to say, science and technology, including good seeds, and the improvement in yield per unit area account for more than 10% each year. In the previous 20 years, our growth mainly relied on the increase in yield per unit area.

Two, the supply of agricultural products, especially food security. As I just reported, our grain has been bountiful for six consecutive years, reaching 106.16 billion catties last year. This year, it is very likely to exceed last year's level, continuing to stabilize at a target expectation of more than one trillion catties. However, we must be aware that if we look at the 32 years since the reform and opening up, our grain has climbed four major steps from 60 billion catties to 1998, averaging a big step every five years, increasing from 60 billion catties to 70 billion catties, then to 80 billion catties, to 90 billion catties, and to 100 billion catties. We expected that in 1998 our total grain would reach 140 billion catties, meaning that our grain broke through 100 billion catties in 1998. Last year, it was 106.16 billion catties. Over these 12 years, the population has increased, especially our per capita GDP, which rose from about $1,000 in the year 2000 to $3,700 last year. The improvement in living standards inevitably increases the direct and indirect demand for agricultural products, especially for grains. Therefore, the first point I want to present is that although our total grain production has been bountiful for seven years, the per capita level in 1998 was 412 kilograms, last year it was 398 kilograms, and if this year is higher than last year, due to the increase in population, I estimate it will not differ much from last year. That is to say, our per capita level is still below the world average, and 400 kilograms is an ideal number because the world's per capita possession of grain is lower than China's. If we look at the overall trend, the world's per capita possession is about 40 to 50 kilograms lower than China's. Of course, we cannot compare with the United States, where the per capita possession is 1,200 kilograms. Compared with the world average, we indeed have a concept to be proud of: we support 21% of the world's population with only 9% of the arable land. Moreover, our per capita grain possession is higher than the world average. But compared with our development requirements, we indeed face significant difficulties. Twelve years ago, we judged the balance of grain supply and demand as being balanced, with surplus in bumper harvest years, and concerns about stage-based, structural, and regional surpluses. In 1998, this was the judgment, but ten years later, in 2007, 2008, and 2009, our judgment on the balance of grain supply and demand is that the balance will remain tight for a long time. These are two completely different concepts. A tight balance means no room for relaxation. For the next step, if we do not pay high attention to grain production and national food security, whether we can maintain even a tight balance becomes a big issue.

Three, considering farmers' planting behavior and global agricultural competition, food security absolutely cannot be taken lightly. This is the first major issue.

The second major issue is to focus on farmers' income. Whether it's enterprises or otherwise, one must pay attention to farmers' income. If you don't use farmers, including migrant workers and factory workers, if their wage levels are not high or if their wage growth rate is slower than your enterprise's profit growth rate, and if your enterprise's profit growth rate is lower than the country's fiscal growth rate, I believe it will definitely be unstable. Paying attention to farmers' income, after much thought, I decided to mention it because it is actually highly relevant. Farmers' income last year was 5,153 yuan, adjusted for prices, 5,153 yuan. On the basis of an 8.5% increase last year, this year's cash income for farmers in the first half was 3,078 yuan, with a growth rate of 9.5%, even exceeding last year's growth by 1.4 percentage points, and for the first time in recent years surpassing the growth rate of disposable urban income. However, what does the problem of farmers' income manifest? Comparing farmers' income with themselves, these few years have shown very good performance, increasing respectively by 6.8%, 6.2%, 7.4%, 9.5%, 8.8%, and 8.5% since 2004, and this year it is very likely to exceed 8. In 2004, farmers' income was 2,622 yuan, last year it was 5,153 yuan. However, urban residents' income last year was 17,175 yuan, with an absolute income gap of 12,022 yuan, and a relative gap of 1:3.31. At the beginning of the reform in 1978, the ratio of urban to rural residents' income was 1:2.56, and in 1984 it had narrowed to 1:1.7. This brings up a big issue: if farmers' income cannot grow in tandem with urban residents', and if rural and urban incomes cannot grow in tandem with national strength, it is a big problem.

If the plenary session of the Central Committee were to be expressed in two words, it would essentially mean that during our "11th Five-Year Plan," if expressed in two words, was "strengthening the nation," whereas the "12th Five-Year Plan" is "enriching the people." Have you noticed that adjusting the farmers' income structure has become one of the main themes of this plenary session? Of course, the main theme is transforming the economic development model, and making adjustments to the national income distribution structure, focusing on improving people's livelihoods, and increasing urban and rural residents' income, which should serve as the starting point and ultimate goal of transforming the economic development model — the people's livelihood issue. How to increase farmers' income? Why is there such a large gap between farmers' income and urban residents' income? It wasn't always like this since the reform and opening-up. From 1978 to 2009, over 31 years, we calculated that urban residents' income increased by 7.2% annually, while rural residents' income increased by 7.1% annually, with a difference of 0.1 percentage points. That is to say, over 31 years, there was not much difference. The main reason lies in the period from 1998 to 2009, over these 11 years, urban residents' income increased by 9.5% annually, while farmers' income increased by 5.7% annually. The main difference occurred in the past decade, and within this decade, the difference did not occur in the past ten years but rather in the five years after 1998, during which farmers' income grew by only 1% to 2% annually, with the highest being 4.2%. The problem lies here.

Meanwhile, another major manifestation is the significant disparity in farmers' income across regions. Last year, Shanghai's income was already 12,400 yuan, while Gansu's was 2,980 yuan. Guizhou's income is not much different from Gansu's, meaning that the ratio of farmers' income in Gansu to those in Shanghai is 1:4.2. How to increase farmers' income is the second major issue.

Four, agricultural science and technology. There are two major aspects of agricultural science and technology. Some of you may be involved in scientific and technological investment. We currently have two major issues: First, can our agricultural R&D keep up with the demands of the times? What is the gap between our agricultural science and technology and the world's advanced technologies? In the 1970s, we had wheat; in the 1980s, hybrid rice; in the 1990s, genetically modified cotton. Since the new century, how many major revolutionary innovations in agricultural science and technology have we achieved? Recently, I read materials indicating that our corn R&D and variety development lag behind the world's developed countries by about 20 years. In rice, we lead globally, but what about other varieties? What about horticultural varieties, particularly vegetable and flower varieties? Many of our vegetable and flower varieties are firmly controlled by foreign capital. With our resources so scarce, our population still growing, and our living standards continuously improving, the demand for agricultural products is unlike any other product. We have a strong demand trend, whereas other industries, including steel and automobile industries, are constrained by demand. We are only constrained by production capacity, which represents two entirely different types of constraints. Thus, the space for agricultural development is vast, and agriculture is an ever-lasting industry in China, showing a very strong presence. But how to sustain this production? Science and technology.

The third major issue, whether engaging in agriculture or rural economics, inevitably involves land issues. You all know that our country has 1.826 billion mu of arable land. Our agricultural sideline business operation area, now covering 250 million mu, averages 7.3 mu per household, the smallest scale worldwide. Some say that China will never reach the scale of family farms in the U.S., nor will it reach the scale of family farms in European countries. Farms in the U.S. cover 200 hectares, in European countries 20-40 hectares, and in Japan and South Korea, about 3 hectares on average, while in China, it is at most half a hectare. China may not reach the level of the U.S., but China absolutely has the potential to surpass the levels of Japan and South Korea. Urbanization drives a large migration of population and labor force to cities, creating prerequisites and conditions for modern agriculture and scaled agricultural operations. A farmer today manages half a hectare of land; in ten years, they might manage one hectare, and in twenty years, two hectares. Personally, I believe this is absolutely possible. Given China's vast territory, if you visit Heilongjiang or rural enterprises, you'll find certain families managing 100 hectares, even 1,000 hectares, and such households are everywhere. To a great extent, the agricultural management model in Heilongjiang's reclamation areas and rural areas resembles the American agricultural model. In suburbs like Shanghai and Beijing, you can see models similar to Japanese and Korean agricultural practices, Danish and Dutch agricultural models, and even Irish operational models. Within this context lies an advanced model involving a significant issue: land issues, specifically the transfer of land contract management rights. Last year, I reported that nationwide, this figure was 12.4%, and the latest statistics show it to be 13.1%. In fact, in Shanghai, it has reached as high as 60%. In Zhejiang Province, it is 30%, and in Heilongjiang, the latest statistics indicate 25%. Next, I believe that engaging in modern agriculture will involve the transfer of land contract management rights. This transfer raises several questions: First, who does the land flow to? Different people have different views—large farming households or cooperatives? Second, what happens after the transfer? Will there be a tendency towards non-grain or non-agricultural use? I can clearly tell you my personal view: who the land flows to is not important, but what happens after the transfer is crucial. Absolutely, non-agricultural or non-grain use must not occur, and the requirements of the Third Plenary Session must not be violated. In terms of land transfer, there are "three nos": "no harm to the interests of the original contracting household, no non-agricultural use, no change in the original land attributes." Who the land flows to is not important, but non-agricultural or non-grain use must not happen. Secondly, rural interests must not be infringed upon. Mutual benefits among farmers are acceptable, but corporate profits alone should not be pursued.

The fourth major issue is labor. Those of us in agricultural enterprises may have noticed that farmers' wages are constantly rising. On one hand, we study the phenomenon of having 100 million migrant workers concentrated in agriculture, which indicates a surplus labor force. On the other hand, every February and March, we encounter so-called structural labor shortages among migrant workers. What is the issue here? It manifests in the mismatch between industrial development and labor employment structures, meaning our industrial structure and labor employment structure, along with industrialization and urbanization, are imbalanced. On one hand, we need to continue transferring the 80 million to 100 million surplus labor forces currently trapped in agriculture. On the other hand, we must pay attention to traditional labor-exporting provinces like Henan, Sichuan, Chongqing, Jiangxi, and Anhui. After their labor force moves out, the remaining rural labor increasingly exhibits signs of aging. To a large extent, we are witnessing severe phenomena of aging farmers, similar to what Japan and South Korea experienced. The severity of aging reflects the reality of an aging rural population, the hollowing out of rural areas, and the sidelining of agriculture in some places, which is far from uncommon. Therefore, the third major issue, the problem of rural labor, deserves attention and is highly relevant to everyone's work and focus. Why do farmers have demands? Why do they seek wage increases? Indeed, in certain positions, regions, and fields, our labor force and industrial layout do not match the process of urbanization, which includes both urbanization and industrialization issues.

The fifth major issue is financial insurance. A colleague mentioned at last night's banquet that the biggest distinction between modern agriculture and traditional agriculture is the reliance on financial support and the development of the insurance industry. Individual farming households may not need to deal with financial institutions, but modern agriculture certainly does. The first issue in finance now is that the financial needs of farmers and enterprises are not fully met. Even with new financial institutions, there are currently over 240, covering 2,859 counties and 39,000 townships nationwide. Even if each county has one new type of financial institution, there are still over 2,800. Currently, on one hand, rural commercial financial institutions are concentrated in provincial capitals, medium-sized cities, and services below the county level are shrinking. On the other hand, many townships have financial needs, yet there isn't a single financial institution in a township, not even a credit cooperative. Therefore, solving rural financial problems primarily involves organizational innovation and providing specialized policy support to financial institutions to encourage them to invest in agriculture and agricultural enterprises. Without specific financial policies, many of you here are experts in investment and financing, such as reserve requirement policies, income tax, business tax policies, subsidy policies, and even bottom-line guarantees, all require special policies. Our direction is clear: on one hand, innovate in financial institutions to invigorate the stagnant rural financial market or the monopoly of rural credit cooperatives. Various financial institutions should enter and new ones should emerge. Town and village banks, micro-loan companies, wealth guarantee companies, and various forms, including regulated informal finance.

Five, who transforms, who converts results, who promotes