Agriculture is important for expanding domestic demand and making structural adjustments. It is a basic industry vital for ensuring China’s stability and maintaining public confidence. To hit the targets set for this year, increase GDP by about 7.5 percent and control the rise in CPI at around 3.5 percent, we must guarantee the supply of grain and other major agricultural products.

As mentioned in the Report on the Work of Government (2014), we must make work relating to agriculture, rural areas and farmers the top priority in all our endeavors, as well as accelerate agricultural modernization and the development and reform of rural areas to ensure national food security and increase farmer incomes. This is an important action essential to the success of our economic initiatives in 2014, and also a major task throughout China’s modernization drive. All the work must be based on the conditions of our country and agriculture, and should follow the requirements of the times. New agricultural modernization with Chinese characteristics boasts advanced manufacturing technology, modest operating scale, strong competitiveness in the market and a sustainable environment. With that in mind, we should get rid of obstacles from systems and ideas, and take courage to explore and practice with the aim of making new progress in the development of modernized agriculture.

Ensure national food security

For China’s large population, full control of the food supply is a top priority in the governance of the country. Faced with the changes taking place in domestic resources and environment, food supply pattern and the international trading environment, we should implement a strategy that is “self-dependent, based upon domestic supply, has the capacity to be secure, includes appropriate portions for imports, and is backed up by science and technology” to ensure national food security. To achieve this, two actions should be taken:

On the one hand, China should increase grain yields. China’s yield of wheat, rice and corn accounts for only 60 percent, 71 percent and 67 percent of the average yield of the top 10 countries with the largest yields, respectively, leaving China with considerable growth potential in grain yields. To transform the potential productivity into actual productivity, we should make sure that China’s cultivated land area does not drop to less than 120 million hectares, and more efforts should be made to increase the coverage of high-standard farmland that produces good yields in spite of drought or excessive rain. In addition, much work is needed to build a number of major water conservancy projects like diverting water, protecting key water sources, harnessing rivers and lakes, and developing efficient water-saving irrigation.

We should accelerate the development of the modernized seed cultivation industry by deepening reform in the seed industry to integrate the cultivation, reproduction and distribution of seeds. China should unleash the initiative of agricultural personnel in promoting technologies and providing service to farmers. China should accelerate the updating of agricultural equipment, especially agricultural machineries. China should improve the subsoil of farmland to promote the increase in agricultural output, and carry out a trial this year on 6.67 million hectares of farmland. Furthermore, China should specify the responsibility of food security at central and local governments, and implement the system of provincial governors being liable for the “rice bag,” which means food security.

On the other hand, China should import appropriate amounts of agricultural products. Last year, China imported 14.59 million tons of grain, with an only 2 percent dependence rate on foreign trade, but 63.38 million tons of soybeans, 9.22 million tons of edible vegetable oils, 4.56 million tons of sugars and other agricultural products in considerable amounts, which equals the products produced from more than 53.36 million hectares of farmland abroad. As economic globalization grows deeper, China can’t develop its agriculture without communication with the outside world. It is reasonable for the country to increase food import and quicken the pace of “going global,” which is vital for the building of an open-minded new economic system. Meanwhile, the country must take a prudent attitude in locating the scale, pace, style and layout of import and focus on diversification in terms of import channels, so as to enable the international markets to adapt to the import demand from China in a slow and balanced way.

Innovate agricultural operation modes

Every household in China's rural areas possesses an average of about half a hectare of land. The household operation of this kind, which is small-scale and disperse, is obviously limited. We should continue to make household management the basis of rural operations and support the development of many other operation modes. We should develop new agricultural operation businesses and establish a new agricultural operation system that is specialized, well organized and socialized.

We should take migration of rural labor, socializing agriculture, mechanization, operational agricultural varieties, natural conditions of land and other factors into account. China should make plans to achieve a balance between increased capacity and more income, between raised labor productivity and land productivity, and between efficiency and equality. China should give guidance to land transfer and concentration, and establish appropriate standards of household business based on local conditions. According to some calculations, in northern single-cropped areas, the appropriate land operated by households should be maintained at around 8 hectares, with 4 hectares of land in southern double-cropped areas. Developing household businesses at an appropriate scale should follow the basic conditions of our country, encouraging them but avoiding being over-enthusiastic to pull them up. What’s more, the land should not be left uncultivated, nor should it be cultivated on a small scale or in a scattered way. The land should not be too concentrated so as not to aggravate employment pressure and social inequality.

To establish a new agricultural operation system, we should support the development of specialized cooperatives, joint stock partnerships and other new agricultural operation entities. China should encourage investment from industrial and commercial entities in rural areas to develop modernized planting and breeding industries.

As more parties are involved in land transfer and trans-regional land transfer tends to be common, the land transfer risk security system should be established. China should improve its diverse agricultural service system, stabilize agricultural public service institutions, and foster various agricultural organizations with socialized service to offer service in information, technology, purchase and sale, finance, and agricultural machinery. The government should purchase services from qualified profit-generating service organizations for public use.

Establish a long-term mechanism for agricultural sustainable development

The foundation of China's agricultural sustainability remains weak. Ground water is excessively exploited due to digging wells in northern producing areas. Meanwhile, chemical fertilizer and pesticide, prone to being washed away, are used too much, polluting large pieces of land and ground water. Pollution produced by industries and cities are transferred to rural areas where we see an increased tendency of "three wastes" (waste water, waste gas and waste solid). Agricultural product quality and people's health are directly threatened by non-point agricultural source pollution, household waste pollution and point source industrial pollution, leading to a deterioration of water and soil in rural areas.

Sustainable development of agriculture constitutes an important part of ecological efforts. To implement agricultural modernization, we must take the sustainable development of ecology and environment as a goal, and develop the resource-conserving and environmentally-friendly agriculture. China should adjust the use of land where soil is severely polluted or ground water is excessively exploited to realize the rehabilitation of land in an orderly way. China should strengthen soil pollution control to enhance the ecological restoration ability of polluted soil. China should accelerate the development of water-conserving and efficient agriculture, reform water prices for agriculture and strengthen control of water pollution in the agricultural sector. China should deal with the sinking area in North China caused by excessive exploitation of ground water. We should launch a new campaign of returning land for farming to forestry by planting trees, preventing and controlling sand, protecting wet land, building shelter forests and restoring grassland. China should accelerate the control of desertification and rock desertification, and improve the ecological compensation system involving forest, grassland, wet land, and water and soil conservation, in addition to exploring diverse channels for raising compensation money for ecological benefits.

Intensify policies for agriculture

We should increase input and improve efficiency. Public finance should focus on agriculture, rural areas and farmers, with more central infrastructure investment in the agricultural sector. We will use more channels to bring financial and social funds into agriculture and rural areas through measures such as discounts, rewards, risk compensation, and tax reductions and exemptions.

The government should guarantee appropriate spending in fields where public finance is needed, such as building large-sized and medium-sized water conservancy, major techniques promotion, and ecological and environmental governance in agriculture. In addition, the government should take different supportive actions to provide training for rural laborers, as well as agricultural insurance and small-sized non-profit infrastructure for rural residents. The government should continue to implement subsidizing policies for planting major grains and other agricultural products, new agricultural operation businesses and major producing areas. More effort should be put into agricultural machinery purchase and improvement of the fund allocation system.

We should abide by supply and demand market rules, and improve the pricing mechanism for grains and other major agricultural products. We will set up a agricultural products pricing system, and give subsidies to low-income consumers or producers according to the price of agricultural products. This year, Northeast China and Inner Mongolia will start a soybean subsidy trial, and Xinjiang will start a cotton subsidy trial based on their prices. To keep the policies stable and sustainable, the government will continue to raise the minimum purchase prices of wheat and rice, and implement the temporary purchasing and stockpiling policies of corn, rapeseeds and sugar.

Authors: Han Jun, Ye Xingqing, research fellows,Development Research Center of the State Council

Source: People's Daily March 22, 2014