The Centre’s symbolic ‘No 1’ or ‘top’ document was released on 27 Jan 2016. Since 2013 this annual fixture in the agrarian calendar has promoted a strong modernising agenda to transform the countryside by strengthening agro-industrial chains. This agenda is speeding up in 2016.
modernisation strategy accelerates
Faced with severe market distortions, resources and environmental constraints, the document calls for better domestic integration and deepening international engagement. Developing ‘modern agriculture’, the lagging fourth modernisation identified in 2013, entails structural upgrading and technological integration.
The 2016 document adopts ‘grain in the ground’ to maintain domestic capacity while developing technological management. New ‘senary sector’ intends to integrate both rural-urban structures and primary, secondary and tertiary industries.
2015’s Seed Law and Food Safety Law implementation to be closely monitored.
new food security concept
New strategy places emphasis on capacity over production, engaging more with international markets, while maintaining domestic capacity. Food security is now delineated into three concepts: grain, commercial grain and feed.
Price floors to remain on rice and wheat in 2016. Corn production to be adjusted under new crop structure adjustment plan.
In 2016, the government will release a 5-year ‘Agricultural foreign cooperation plan’. This will formulate strategies for food import and agroindustrial investment in Belt and Road countries. Competitive advantages in exports will be consolidated, import sources will be diversified and agricultural Capacity Cooperation will be revved up.
pushing rural finance
Priority on financing the upgrade of 53 million ha of ‘high-standard farmland’ by 2020, nearly half China’s current arable land. Local governments to be responsible for special ownership status and financing mechanisms to encourage investment in high-standard farmland.
Banks will be pushed to extend conventional rural credit, but incentive mechanisms are unclear. Insurance and ownership rights reforms are already at pilot stage
- funding to support new farming entities to professionalise and up-scale agribusiness
- push commercial, policy and postal banks to increase rural lending
- reform rural credit cooperatives
- agricultural credit guarantee system set up provincially in 2016, nationally by 2018
- futures and options pilots to be developed
- rural bond development to be part of multi-tiered capital structure
- innovation on insurances for target prices, incomes, index-based weather, fisheries, and infrastructure
agriculture 4.0 architecture
Rural-urban dual system to be overcome with digital infrastructure investment. Small town urbanisation through e-commerce infrastructure and market access to be heavily subsidised. Advanced agro-processing to deepen agro-industrial chains will be subsidised, with supports for enterprise development.
- improve e-commerce network backbone including extending cold chain logistics systems
- provide marketing support through public service units
- subsidise telcos to extend broadband coverage and reduce costs for high-speed internet access
- upgrade agricultural industrial chains through ‘Internet +’, Internet of things, cloud computing, big data, mobile Internet
- promote agro-processing through subsidies, national champions and autonomous IP development
transferring land rights
Reform of collectively owned land to clearly disaggregate rights by 2020—ownership, management, and rural contract. Supports to be extended for transfer rights to urban area land contract, land use, and shareholding. Rural contract rights certificates and homestead mortgage pilots to lead legal transfer mechanisms.
Non collectively owned rural land to be integrated into national strategies. Construction land for rural tourism projects to be included in overall land use planning. Ownership rights created for forestry and grasslands, nongken to be integrated into rights structure. Preparations underway for a village land utilisation plan.
- financing high-standard farmland: by 2020 800 million mu (53 million ha) arable land; eventual aim 1 billion mu (66 million ha) high-standard farmland
- large-scale irrigation and water conservation: 2020
1 billion mu irrigation acreage; effective utilisation coefficient of irrigation water to increase to at least 0.55
- forest coverage: exceed 23 percent; wetland acreage to be above 800 million mu (53.33 million ha)
- modern seed industry: integrated breeding, planting, application, innovation and security
- skills: educate, train and motivate farmers to become professionals
- migrant workers: by 2020 settle 100 million, transfer employment for 50 million, meet basic social needs for 20 million
- food safety: by 2020 meet the international food codex standards for pesticide and veterinary drug residue
- rural women’s fund: to be set up to promote opportunities and social policy
- Guiding opinions to stabilise and improve the rural basic management system
- Guiding opinions on deepening administrative system reform for economically developed towns
- Guiding opinions on delineating important protected areas and functional areas of food production of soybean, cotton, oil, sugar cane and other agricultural products
- Guiding opinions on improving farmers’ income growth
- Opinions on agro-processing industry development
- Opinions of innovating rural infrastructure investment and financing system
- expand the feed grain reform pilot
- coastal catch limit management pilot
- arable land fallow and rotation system pilot
- provincial rural credit cooperative reform pilot
- rural contracted land management and operational rights mortgage pilot
- agricultural futures and options pilot
- pilots on target price insurance, income insurance and index-based weather insurance
- provincial rural land contract right registration and certification pilot
27 December 2015
Han Jun 韩俊 | Central Rural Work Leading Group Office
Agricultural supply side reform requires better food production capacity. That means not only adequate supply of agricultural products but also meeting consumer demand. China is currently not producing enough soybeans, milk and sugar. Agriculture ‘going global’ to plug domestic shortages should be encouraged but must follow the principles of mutual benefit, win-win development and secure trade relations. China must improve competitiveness in the seed industry, raise the level of agricultural mechanisation, and develop agricultural industrial chains.
Three main pillars for regulating the direction of the grain market this year | Economic Information Daily
14 January 2016
Chen Xiwen 陈锡文 | Central Rural Work Leading Group
In this round of reforms China should align domestic market prices with market demand, cap the grain reserve, boost the role of the market with diverse entities and multiple distribution channels, and maintain peasant incomes. Leaders will push forward a crop restructuring plan, stabilise rice and wheat production, reduce corn production in non-dominant regions, and realign global markets toward China’s interests.
Innovative financing mechanisms to accelerate high-standard farmland construction | Ministry of Finance
7 December 2015
Lu Guimin 卢贵敏 | MoF National Agricultural Comprehensive Development Office
China must innovate investment and financing mechanisms and promote financial and social capital to implement the ‘grain in the ground’ strategy. The new approach will accelerate construction of high-standard farmland and cultivate new business entities, helping integrate industries in the primary, secondary and tertiary sectors. Investing in high-standard farmland is not only a matter of agriculture. Demand for cement, steel, sand, construction machinery and labour means that more than 70 percent of needed investment will go toward building materials and wages for peasant-workers. Pilots are exploring innovative investment and financing mechanisms where emerging business entities has received lower interests rates on loans and better subsidies. China Development Bank and other finance institution have been receptive.
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