Chapter 34 4. Tonic should be given to agriculture

Agriculture is the foundation of the national economy, which is the policy established at the beginning of the founding of our country.Summarizing the experience and lessons of history and reality, both the central government and the local government have increasingly realized that the stable development of agriculture is the foundation of economic stability and political stability.Only when the agriculture is stable can the economy be stable, the society be stable, the people of the people be stable, and the country be stable.Today, as the socialist market economy is promoted, agriculture is the most important support point for reform, development and stability.Even the cadres and the masses in the economically developed coastal areas have realized a truth from the setbacks: money can buy food, but it cannot buy a solid "agricultural foundation."The more we develop the market economy, the more we need to strengthen the foundation of agriculture, which has become the consensus of the whole party and the whole country.

However, how to stabilize agriculture and how to strengthen agriculture, the foundation of the national economy, is not an easy task.In addition to our ideological understanding, it is more important to have real support measures and input mechanisms.The reason is very simple, a pair of empty hands and two bare legs cannot do well in agriculture. In this regard, some foreign experiences are worth learning from. Financial subsidies for agriculture in developed countries are generally between 30% and 40%. For example, Japan is 26 billion US dollars per year, accounting for 48%.Some countries with a developed market economy have gone through a detour of agricultural shrinkage in the process of industrialization, but in the end they have to go back and adjust their policies, mainly using financial means to provide necessary support for agriculture.American agriculture accounts for only 4% of national income, but the government gives 9% of financial subsidies.German agricultural taxes account for about 1.7% of total revenue, while agricultural investment accounts for 7% of the state budget.

Not only developed countries attach importance to investment in agriculture, but also developing countries with similar national conditions to our country also attach great importance to the basic position of agriculture, adopting a series of high subsidy policies to stabilize and stimulate the development of agricultural production. Since 1969, South Korea has been adopting a policy of purchasing grain at high prices and selling fertilizers at low prices. It also implemented a financial discount plan to encourage the flow of funds to the agricultural sector and try to maintain basic self-sufficiency in grain.South Korea is also under international pressure after the Uruguay Round agreement.In order to reduce financial and consumer burdens and ease the international pressure for opening up, the government has taken measures to encourage the expansion of business scale and improve the quality of agricultural laborers, so as to increase the operating efficiency of grain.Since 1994, the government has set up a "transfer management fund" to allocate 160 billion won (200 million U.S. dollars) to support the transfer of farmland to children of farmers or sell it to farmers under the age of 50 to solve the problem of aging farmers.At the same time, since 1995, the education system has been reformed, and a new special school system has been established. It will implement two or three years of technical education for agricultural high school graduates. .

India is a large country with a population of 935 million, and 74% of the population is in rural areas. Due to the increasing population, the demand for food is also expanding. For a long period of time, it needs to import a large amount from abroad. Since the 1970s, with the help of the World Bank, the "Green Revolution" has been implemented, increasing investment in agriculture (accounting for 24% of the total investment), expanding irrigated areas (accounting for 45.3% of cultivated land), and promoting fine varieties (coverage rate is 70% ), increasing chemical fertilizers (74 kilograms per hectare in pure quantity), so that grain production increased significantly. From 1980 to 1988, the total grain output increased from 153 million tons to 183 million tons; the output per hectare increased from 1190 kg to 1449 kg; the per capita output increased from 223 kg to 230 kg.Although the output per unit area and per capita output are both lower than China’s level, India’s milk consumption level is higher than China’s and its direct grain consumption level is lower than China’s. It has achieved basic self-sufficiency at a low level of grain, and its reserves account for 18.9% of the total output.

In Vietnam in Asia, the reform of the economic system has enabled farmers to obtain land production and management rights. At the same time, a low tax policy is implemented. The land use tax is 50 kilograms of rice per hectare, which is only equivalent to 5% to 6% of the output value.In addition, the government increased investment in agriculture and improved water conservancy facilities. Agricultural infrastructure investment accounted for 28% of the country's infrastructure investment; reformed the government's compulsory low-price purchase of grain system, implemented free market transactions, and increased farmers' income; attaches importance to agricultural technology For promotion, the government guarantees the funding of agricultural science and technology institutions, and part of the income is used to reward scientific and technological personnel, which promotes the development of production. From 1989 to 1993, the rice output per hectare reached 3.25 tons, which was 22.2% higher than that from 1981 to 1988; the average annual rice export volume was 1.58 million tons, while the average annual import volume was 320,000 tons from 1981 to 1988, that is, imported The country has become the third exporter of rice after Thailand and the United States.

Most of Saudi Arabia is a desert with an arid climate, making it extremely difficult to develop agriculture.However, in the late 1970s, with huge investment, the development of seawater desalination projects solved the problem of irrigation water. At the same time, high subsidies (including food and agricultural production materials) were adopted to provide free land suitable for farming to farmers and agricultural companies. The food production has been greatly increased. In addition to meeting the needs of the country, it is also exported to many countries.The Food and Agriculture Organization of the United Nations has awarded the country a certificate of honor in recognition of their exemplary role in achieving "food security".

The Philippines, on the other hand, provides us with a negative example of the impact on the development of agricultural production due to the loosening of agricultural inputs.The Philippines used to be a rice exporting country, but in recent years, due to policy mistakes, the investment for irrigation dropped from 800 million pesos in 1980 to 200 million pesos in 1992, which led to the abandonment of irrigation facilities and affected rice production. output.At the same time, due to the rapid reduction of cultivated land for rice cultivation in the process of industrialization and urbanization, the area dropped from 9.8 million hectares in 1975 to 3.2 million hectares in 1992. In 1995, the rice output was 6.1 million tons, a decrease of 2.5% compared with the previous year, which caused the market grain price to more than double, and had to import 330,000 tons of rice from abroad, which increased to 500,000 tons in 1996.For this reason, President Ramos replaced the Minister of Food and the Minister of Agriculture, which reduced the President's approval rating to 20%.

From the above, we can see that all countries in the world attach great importance to the investment in agriculture, especially food production.Without high agricultural input, there will be no high agricultural output. This is a fact proved by many countries.Relying on a pair of empty hands and two bare legs is not going to do well in agriculture. If we want to develop agricultural production and increase food production, the first thing we need to do is to increase investment in agriculture.In the past, we put too much emphasis on the human factor and the power of policies, while ignoring the input of materials. As a result, apart from playing games with numbers, it was difficult to make major breakthroughs in practice.We say that agricultural development depends first on policies, second on investment, and third on technology, all of which are indispensable.

It is obviously not true to say that China does not attach importance to agricultural production.China's economic reform started from the countryside. At the beginning of the five consecutive years since 1982, the Party Central Committee issued five No. 1 documents, emphasizing the strengthening of the basic position of agriculture to demonstrate the importance and authority of agriculture. However, we cannot fail to see that during the upsurge of the whole party talking about agriculture, the state’s investment in agriculture has been decreasing year by year. The state’s investment in agriculture has dropped from an average annual increase of 11% to an increase of 3%. The proportion of the total state investment also dropped from 17.7% to 4.8%, among which the lowest was only 3% in 1986. The state’s investment in agricultural infrastructure accounted for the proportion of the total investment in the national economy, and the same phenomenon of decline also existed. From 6.5% in 1980 to 0.4% in 1996. In 1979, the No. 1 document of the Central Committee of the Communist Party of China clearly stipulated that within three to five years, the proportion of state investment in agriculture in the total capital construction investment should gradually increase to 8%. There is a trend of decreasing year by year.In contrast to the annual expansion of industrial investment, the proportion of investment in agricultural capital construction has been on a downward trend since the founding of the People’s Republic of China, from 10.5% during the Fifth Five-Year Plan period to 3.36% during the Seventh Five-Year Plan period, and from 6.21% in 1984 to 1.7% in 1994. %, leaving only 0.4% in 1996.The proportion of agricultural expenditure in total fiscal expenditure dropped from 15.9% in 1978 to 10.8% in 1996, and only recovered to 12% in 1998.

Subsidizing the cost of agriculture and food production is a common practice in many countries, not to mention the developed countries, and the developing countries in the world also implement financial subsidies for the use of chemical fertilizers and improved seeds.Hungary stipulates that 20% subsidies can be obtained for building fertilizer plants, drilling wells, and purchasing tractors; 40% subsidies can be obtained for repairing reservoirs, building purchases and sales, and processing milk facilities; 40% subsidies can be obtained for soil improvement; purchase of agricultural machinery , can get 60-70% subsidy.In addition, providing short-term, medium-term and long-term credit is also an important form for countries to implement non-price policies on agriculture and food producers.For example, Austria provides long-term credit for seeds; Canada provides medium-term and short-term credit for agriculture; Norway provides special loans for the purchase of agricultural machinery.These credits have worked well to support both agriculture and food production.The governments of some countries implement price subsidies for the input factors of grain production in order to reduce farmers' production costs.For example, the Indian government's subsidies for chemical fertilizers increased from 600 million rupees in 1976 to 7.9 billion rupees in 1984; in order to ensure the high-quality seeds of various crops in Indonesia, the state implements breeding subsidies for good seeds, and all those used for production and national production According to the plan, a breeding subsidy of 176 dong per kilogram is given; the subsidy used by the former Soviet Union for agricultural tractors, cars, combine harvesters and chemical fertilizers accounts for an average of 20.2% of the wholesale price, of which the subsidy per ton of chemical fertilizers reaches 14.43 rubles.

my country's financial subsidies for agriculture are nominally 10% of the total agricultural output value, but under the impact of the scissors gap between industrial and agricultural products, they are almost zero or even negative. From 1950 to 1978, the agricultural national income obtained by the state through price means was about 523.9 billion yuan, and the total agricultural tax was 81.9 billion yuan, while the state returned only 157.7 billion yuan to farmers through fiscal expenditure during the same period. In 28 years, the state collected 448.1 billion yuan from agricultural national income.The "taking" between the state and farmers is far greater than "giving".Although some changes have been made after the reform, this trend has not been completely reversed.According to analysis, since 1952, my country's agricultural production has experienced more than ten fluctuation cycles, with an average of about 4 years in each cycle. Among these fluctuations, the impact on agriculture due to capital fluctuations reached 41.4%. Why is the Party Central Committee emphasizing and strengthening agriculture on the one hand, but on the other hand, the investment in agriculture is decreasing year by year, and the scissors gap between industrial and agricultural products is getting bigger and bigger?To borrow the words of a deputy county magistrate of a certain county in Hebei Province: "I have been in agriculture for eight or nine years. If you say that the leaders don't pay attention to it, it's not true. To develop agriculture, you don't give anything except money. In the past, it was said that 'the whole party is big. agriculture', now it is 'the whole party is talking about agriculture'", although the words are a bit harsh, but it cannot be said that it is unreasonable.He Kang, the former Minister of Agriculture, also admitted that: In the past, there was a lot of talk about agriculture, but little was done, and there was a lot of verbal investment, but little actual investment... The sectoral management of the national economy implemented in recent years has put agriculture in an extremely disadvantaged position.At present, the departments related to agriculture include planning, finance, banking, chemical industry, commerce, grain, foreign trade, light industry, industry and commerce, taxation, price, power supply, etc., under the guidance of the national plan, they all control the allocation of resources to a considerable extent .The sectoral and industrial interests and their behavioral flaws put agriculture in an embarrassing situation.Originally, both the country and the peasants hope that various departments and industries can play a positive role in promoting the development of the agricultural economy, but some industries often play a counterproductive role for their own interests.In terms of agricultural investment, some departments responsible for the supply of materials and funds cannot correctly handle the relationship between their own interests and the overall situation of agricultural development. For their own interests, they transfer materials and funds to industries with quick results and high profits; Participating in the reselling of agricultural materials or even raising prices at will, using inferior products to fill up superior ones, depriving agriculture and making profits from it, so that the state's investment plan for agriculture cannot be realized as scheduled.What's more, some functional departments reach out to farmers for so-called "internal" reasonable interests when the market for agricultural products and agricultural production materials is in short supply.Due to the monopoly status of these industries and departments, the operating profits are considerable, which makes the agricultural remuneration lower and lower.On the other hand, the tendency toward localization of national interests prompts local governments to favor non-agricultural industries.After the local financial contract, due to the financial pressure on the local area, they have the motivation to short-term flat and fast investment, high output value, and high-speed fiscal revenue. The development of agriculture mainly relies on central investment, which makes the "urban bias" more prominent.The local government's investment in agriculture can only solve self-sufficiency at best.They care about fiscal revenue and look downwards, agricultural development looks upwards, counties look at the province, provinces look at the central government, and the central government is often powerless at this time.Therefore, the strengthening of agriculture is only shouted in slogans, written in documents, and printed in newspapers, but it is difficult to implement it. The issue of agricultural input is not only related to the development of agricultural production, but more importantly, it also affects the process of the entire national economy. The "Ricardian Trap" is an economic phenomenon that occurs after neglecting agriculture. Some experts believe that my country's agriculture must once again prevent falling into the "Ricardian trap".The so-called "Ricardian trap" is a special economic phenomenon in the process of industrialization of agricultural countries.It is due to the transfer of various economic factors such as capital, labor, and land from the agricultural sector to the industrial sector, resulting in the shrinkage of agriculture and the shortage of agricultural products, which in turn leads to the temporary stagnation of the industrialization process. Since the founding of the People's Republic of China, my country's national economy has fallen into the "Ricardian Trap" three times.They are 1958-1960, 1978-1980, 1985-1988.Although the backgrounds of several falls are different, the main reasons are roughly the same.For example, the development ratio of the economic sector is out of balance, the growth rate of the industrial sector is relatively fast, and the agricultural development is too slow or even hovering; the decline in the proportion of agricultural input leads to weak agricultural growth; the relative decline in the price of agricultural products leads to a decrease in farmers' income; the slow growth of agriculture leads to a shortage of agricultural products and a shortage of agricultural products.The consequences of falling into the three times all caused the temporary stagnation of the national economy, which usually takes three to five years to rectify and adjust. In 1958, industry grew by 54.8%, while agriculture was only 2.4%, a ratio as high as 22.8:1. As a result, three years of difficulties followed, and adjustments were forced until 1963. Inflation and panic buying in 1988 also occurred under the condition of unbalanced industrial and agricultural development.It is difficult for a weak agricultural foundation to support the industrial development rate of more than 20% for a long time.According to expert research, the reasonable ratio of industrial and agricultural development should be 2.5:1. According to research, there are signs that our country has fallen into the trap again, which is manifested in the fact that the growth rate of agriculture is significantly lower than the growth rate of industry, the overall decline in agricultural investment, and the decline in real income of farmers.During the rapid economic development in 1992 and 1993, the industrial growth rate reached 20.8% and 21.1% respectively, while the agricultural development rate was only 3.7% and 4%.General Secretary Jiang Zemin sounded the alarm on this at the time: If agriculture fails to develop as it should for a long time, industry will also decline sooner or later, and finally have to adjust.He asked that it is better to save a few projects and slow down the speed of industrial development, but also to ensure the needs of agricultural development. In order to overcome the adverse effects caused by the ups and downs of the national economy, it is necessary to prevent problems before they happen, and take effective measures to ensure the stable growth of farmers' income and a certain increase in agricultural investment. Agriculture is a special industry. Generally speaking, its production scale is extremely small, with one household as the production unit, so it is very uneconomical in scale; its production cycle is extremely long, usually measured in years, so it has Considerable market risk and high opportunity cost; its products are biological products, and its production process is the reproduction of life, so there is an additional risk from nature... and agricultural products, especially as its "big head" Food is a special commodity.In addition to the function of general commodities to meet people's certain needs, it also has the function of social security: it can enter the market for free trade, but its price cannot be too high or "outrageous", otherwise it will be too expensive because of too much involvement. The whole society is unbearable, the price is too low, and it will bring new social problems because of "cheap grain hurts farmers"... It is not difficult to understand why people regard agriculture as "weak quality agriculture".Therefore, some people say that agriculture, even if its output value only accounts for 1% of the gross national product, is still the basic industry of the national economy. Because of these many particularities, the accumulation capacity of agriculture itself is relatively weak at present. 60% of agricultural producers produce only 20% of national income (a large part of which is lost by scissors), and the commodity rate of agricultural products is only more than 20%. In this case, it is unreasonable to rely solely on farmers to increase agricultural input , is also unrealistic.To invest in agriculture, in addition to strengthening government policy support and financial subsidies, it is also necessary to actively guide the industry to engage in agricultural development, attract foreign investment in agricultural projects or formulate policies to encourage agricultural investment, and attract social idle funds to invest in agriculture. Diversified investment is the only way to implement and strengthen agricultural investment. Obviously, the country's investment in agriculture is the bulk of agricultural input.According to international practice, the country's investment in agriculture must reach 10% of the total investment in fixed assets to be considered normal.Most European countries used to rely on food imports. After the establishment of the European Community in 1958, they used 2/3 of the budget as agricultural investment to support food production. Great grain seller.Although China's current financial resources are limited, it is obviously impossible to expect to invest a large amount of money in agriculture in the short term, but it is very necessary to gradually increase the proportion of investment in agriculture.The Third Plenary Session of the Fifteenth Central Committee of the Communist Party of China clearly stated: "We must proceed from the overall situation and attach great importance to agriculture... Persist in taking agriculture as the foundation and vigorously support agriculture from the aspects of policy, technology, and investment." The Ninth National People's Congress deployed: "All Governments at all levels must increase investment in agriculture, implement water conservancy construction funds, and encourage farmers and rural collective organizations to increase labor and capital investment.” The central budget for 1998 allocated 6.235 billion yuan to support agriculture, an increase of 12% over 1997 .This is a gratifying phenomenon. However, under China's current economic situation and financial situation, it is not enough to simply rely on the state to invest in agriculture.Due to the wide scope of China's agriculture, weak foundation and large population, neither the government nor farmers can support such a huge agricultural system alone. Therefore, it is very necessary to strengthen the diversified investment in agriculture. First of all, we can consider using foreign capital.If it is said that rural reform has made great contributions to China's reform, then the current opening up of rural areas has greatly hindered China's opening up.At present, China's introduction of foreign investment in agriculture accounts for less than 1/3 of the total, which is extremely disproportionate to the status of China's agriculture in the national economy.Of course, due to the long cycle of agricultural investment and the relatively low efficiency, it is very difficult to attract direct investment. The government can tilt the focus of routine international aid to agriculture, or adopt policy support measures to guide foreign capital to invest in agriculture.For China, which has relatively weak investment capacity, it cannot but be said to be a shortcut. Agriculture has huge market potential.Due to the global shortage of resources, agricultural products and their related products as resource products will increasingly become shortage commodities, and the market share of agriculture is larger than that of any other products.With the continuous improvement of people's lives, the demand for agricultural products will become increasingly diversified and high-grade, and the market prospect is very attractive.According to the Ministry of Agriculture, there are currently more than 3,000 projects in the agricultural project library, which require 160 billion yuan of funds.Compared with the industrial field that has formed a pattern and there is not much room for maneuver, the agricultural field still has market gaps in many aspects and has a large space for investment and development. In particular, what reassures investors is that the risk of investing in agriculture is small.Agriculture is protected by the state and is the most important industry for priority development. It enjoys relatively preferential policies in terms of taxation, loans, financing and foreign exchange adjustments. Therefore, although the investment cycle is long, the investment cost is small and the income is stable. . Attractive business opportunities in China's agriculture have begun to impress overseas businessmen, and some shrewd businessmen have already taken the lead. Starting from the production of health care equipment, Ankang Group, composed of three companies, Ankang America (International), Ankang Germany (manufacturing) and Ankang China (Group), has invested 46 million yuan in the 700,000-mu farm developed in the Inner Mongolia Autonomous Region in the past year. In Xinyi City, Guangdong Province, since 1994 alone, the total investment of "foreign capital" in agriculture was 142 million yuan, and the operating land was 21,300 hectares. All products were directly sold to Hong Kong and Macao by refrigeration, filling the off-season market. Shanghai has developed 364 Sino-foreign, Shanghai-Hong Kong, Shanghai-Taiwan agricultural joint venture projects, with a total investment of 860 million US dollars and an agreement to absorb 593 million US dollars of foreign capital.The business scope involves vegetables, fruits, flowers, edible fungi, animal husbandry, non-staple food processing and many other fields, all of which are important industries closely related to the ecological environment, nutritious food, and human health. At present, there are more than 200 Taiwanese businessmen investing in agriculture in Hainan, with an actual investment of 150 million US dollars.Li Wenyuan, a Taiwanese businessman, set up a breeding base of more than 400 mu in Qionghai in 1996 to raise marine products such as grouper and red friend fish. Mu of freshwater breeding base, raising more than 1 million Taiwan monosexual tilapia fry, the economic benefits are considerable. The Ninth National People's Congress determined that in the future, foreign investment should be gradually guided to invest in agriculture, basic industries and other fields.It can be predicted that in the near future, foreign investment in agriculture will become a hot spot in China's agriculture. At the same time, quite a number of industrial enterprises and investors in our country have also begun to re-examine the investment opportunities in agriculture and start to adjust the direction of operation. On December 23, 1995, Sanjiu Group, New Hope Company, Ankang Group, Zhongnongxin Feilong Company, Jiangxi Yuanda, Zhongshi Group, Ruyi Group, Baifuler Group, and Inner Mongolia Deer King Company issued an initiative to overseas industrial and commercial enterprises: Industry and Commerce Work hand in hand to revitalize China's agriculture. In fact, before the initiative was issued, the giants of the business community had already sown the seeds of hope in the ancient fields. The first to enter agriculture are enterprises whose raw materials come from agriculture and whose product users are farmers.Yunnan Yuxi Cigarette Factory regards tobacco planting as the "first workshop", treats more than 200,000 tobacco farmers in the region as non-staff workers, and gradually establishes a flue-cured tobacco production base of 600,000 mu.They used industrial profits as start-up capital, and returned profits to the "first workshop" in 12 forms. In 11 years, they invested a total of 3 billion yuan, which not only increased farmers' income, but also ensured a stable source of raw materials, and the company also achieved great development. , becoming my country's largest taxpayer.The Hope Group in Sichuan has been working in the agricultural field for 14 years. The "Hope" brand feed has been sold all over the country. They have established more than 50 enterprises and tens of thousands of sales outlets in more than a dozen provinces and municipalities, and resettled nearly 550,000 rural residents. Labor employment, Hope Group is also rated as one of the top 500 private enterprises in China and one of the top 100 Chinese feed industries. Henan Lianhua MSG Group takes supporting agriculture as its mission. For the corn in the nearby agricultural areas, "Lotus" buys all the corn at a price 10% higher than the market price. In 1994, 20 million yuan was used for water conservancy construction of 400,000 mu of farmland where the enterprise is located. After the joint initiative of the top ten companies was issued, it quickly received a response from the industrial and commercial giants. On the morning of February 9, 1996, the "Cooperation Plan for the Joint Development of Modern Agriculture between Hope Group and Dazhai" was officially signed in Hutou Mountain, Xiyang County, Shanxi Province. The people who signed the cooperation letter are all well-known figures. One is Liu Yongxing, the Chinese feed king and chairman of Hope Group, and the other is Guo Fenglian, the captain of Dazhai's "Iron Girls Team" and the current party branch secretary of Dazhai.The two parties agreed that Hope Group will invest 25.6 million yuan, and Dazhai will invest in sites and workshops to jointly establish "Dazhai Hope Agriculture Co., Ltd." 400 million yuan.At the same time, the company will drive Dazhai villagers to develop cattle and sheep breeding industry, and carry out deep processing of livestock products. At the end of December 1995, in the conference room of Shenzhen Nanfang Pharmaceutical Factory, Zhao Xinxian signed the last "Shennong Project" project agreement of the year.Sanjiu Group invested 12.44 million yuan and jointly established "Sanjiu Jilin Paozi Co., Ltd." with Paozi Village, a rural economic star in Jilin Province, which specializes in extending the industrial chain of corn deep processing. Agriculture is brewing a new opportunity, a new take-off!