China's dairy industry is at a critical moment.

The fourth China International Agro-Business Summit Forum 2015 was held in Beijing on May 17. Han Jun, deputy director of the Office of the Central Financial and Economic leading Group, said in his speech that the current prices of domestic agricultural products have approached in an all-round way, even exceeding those of international agricultural products. The CIF prices of many international grains are still cheaper than those at home, and because some varieties are subject to tariff quota restrictions, there is no need to worry too much about the impact of cheap foreign grain on China's market in the next three to five years.

But it warns that the self-sufficiency rate of soybeans in China is now only about 18%. "the policy goal we have set now is to be basically self-sufficient in grain. In the past, it was called basic self-sufficiency in grain, which included soybeans. Soybeans can no longer be basically self-sufficient. Rations are mainly wheat and rice, and they should be absolutely safe."

Han Jun gave three reasons for the question of why we should adhere to basic self-sufficiency in cereals. First, determined by China's national conditions, China has a population of 1.3 billion, and its annual grain demand is twice that of global grain trade. if China gives up the goal of basic self-sufficiency in grain, it will have a great impact on the world, and the allocation of global resources will have a great impact. Second, there are still more than 600 million people in China's rural areas, and 200 million people are growing grain, and farmers' livelihood and grain are inseparable. To a large extent, the food problem is the problem of farmers' employment and livelihood. Third, China, as a big country with 1.3 billion people, will be irresponsible to the world if it gives up the goal of achieving self-sufficiency in food at home. On the contrary, China has solved the problem of food security for 1.3 billion people, which has made a great contribution to global food security.

For the dairy industry, Han Jun even said that it is now a matter of life and death. In particular, under the impact of melamine, the shadow has not completely dissipated. The European Union announced this year that it would abolish the 31-year-old management of milk production quotas, mainly to deal with the markets of emerging countries, especially China.

On the issue of agricultural subsidies, Han Jun said that although some projects have reached the yellow line stipulated by WTO, there is a lot of room for policy adjustment. As for environmental issues, Han Jun said, the red light has been turned on. It must be transferred to the track with equal emphasis on quantity, quality and efficiency.

The following is a transcript of some speeches:

Han Jun: today's theme is very good, ushering in a new era of modern agriculture. The development of our agriculture is faced with many new challenges. In China, we always consider agricultural problems, rural problems and farmers' problems together. Agricultural problems are not like industrial problems and commercial problems. Industrial and commercial problems may mainly be the problems of industrial development. In China, the agricultural problem is not only an industrial problem, but also a farmer's problem, any of our agricultural policies. It is necessary to consider the impact on farmers, on their employment and on their welfare. Our agriculture has indeed entered a new stage and is facing many severe challenges.

General Secretary Xi Jinping pointed out that if China wants to strengthen agriculture, it must be strong; if China wants to be beautiful, it must be beautiful in rural areas; and if China wants to be rich, farmers must be rich. This is the most basic principle for us to formulate policies on agriculture, rural areas and farmers. Now we are talking about the new era of modern agriculture. As far as China is concerned, the new stage of agricultural development is facing two of the most severe challenges in formulating policies:

Challenge one, our resource and environmental constraints have reached the limit. In such a context, how can we ensure our country's food security, especially how can we improve the capacity for sustainable development of agriculture? This is a question that we cannot avoid.

The second challenge is that the prices of domestic agricultural products are approaching in an all-round way, even exceeding the prices of international agricultural products. In such a context, whether China's agriculture is still competitive or not is also a question that we must answer.

The development of dairy industry is at a moment of life and death.

The problem we are facing now is that the impact of imports on China is inevitable. At present, the management of grain with tariff quotas is better, and the problem is more prominent for products without tariff quota management. At present, the development of the dairy industry is at a moment of life and death, especially under the impact of melamine, and the shadow has not completely dissipated. This year, the European Union announced the abolition of the 31-year-old management of milk production quotas, mainly to deal with the markets of emerging countries, especially the Chinese market. In recent years, as a result of the free trade agreement signed between China and New Zealand, New Zealand's share of the global dairy market has reached 37%, while that of the European Union is only 31%. The EU has also abolished quota management in order to come to the Chinese market and emerging countries' markets. to increase its market share. The capping effect of price this is a hurdle, and we have to get over it.

The self-sufficiency rate of soybean in China is only about 18%.

Next, I can first introduce to you the situation, first of all, the ceiling effect of agricultural product prices. Now we have to face, this is the data by the end of March, there are some price differences in corn, soybeans, wheat and rice. After the international grain is taxed on shore, the CIF price is much cheaper than ours. Soybeans now have no tariff quota restrictions and have come in large quantities. However, because of the restrictions on tariff quotas for corn, wheat and rice, the tariffs within the quotas are very low, but the tariffs outside the quotas are very high. In the next three to five years, we do not have to worry too much about the impact of cheap foreign grains on the Chinese market, because it is very difficult to enter outside the tariff quotas. Last year, our grain self-sufficiency rate was more than 98%, and the soybean self-sufficiency rate is now only about 18%.

What may be more serious now are oil crops and sugar crops. Sugar is quite cheap to import within the April tariff quota. We have earned 50% of the tariff outside the quota, and the imported sugar is 500 yuan cheaper than our one ton. There is nothing you can do about it. It should enter as soon as possible. This is a complete market behavior. We are now facing a great impact on the dairy industry. it is reported that it is about 2 yuan to buy a kilogram of fresh milk in the United States and 2.6 yuan per kilogram in Australia and New Zealand. In China, the cost of a kilogram of fresh milk is 3.7 yuan for farmers. Farmers may not be profitable if you are less than 3.7 yuan. Now it has been lower than this price for 16 consecutive weeks. The production cost of one ton of raw milk powder is more than 10,000 yuan higher than abroad.

Last year, we only imported more than 8 million tons of grain, that is to say, our grain self-sufficiency rate is still more than 98%. Now there are more and more products replacing corn, because the import of corn is restricted by tariff quotas, in order to circumvent the restrictions of tariff quotas, the import of barley, sorghum and corn lees has increased explosively in the past two years. Barley used to make beer, but now half of it is used for fodder. In the first quarter, we imported 2.6 or 700 million tons of sorghum and barley. Last year, our imports of these products alone replaced at least 10 million tons of corn. Corn stocks have risen sharply in the last two years.

Now there is a lot of discussion about why China imports soybeans and can it produce its own? We think that we may not have so many resources for our own production, and one of the most realistic problems facing China is that we lack both edible vegetable oil and feed protein. On the one hand, we import soybeans to meet the needs of ordinary people for vegetable oil. on the other hand, it is also to meet the development of modern animal husbandry, the demand for high-quality protein feed.

When it comes to agriculture, in a country as large as China, food security is a question that we cannot get around and must be answered. since the reform and opening up, there are many international evaluation index systems for food security. in recent years, the British Economist Intelligence Unit has released a report on global food security knowledge. China ranks very high every year, relative to our per capita GDP and the level of economic development. Our food security index is still very high, ranking 42nd out of 107 countries, and India is about 43th in my impression.

There is a lot of room for adjustment of agricultural subsidies.

The second problem is the cost of our agricultural production, which we call the floor, and the squeezing effect of it is becoming more and more obvious. it is very clear that in the past, farmers' farming did not count the cost of labor, but now the cost of labor is getting higher and higher. agricultural machinery, chemical fertilizers, these modern elements of more and more input, agricultural production costs are still in a rapidly rising channel.

The third issue is agricultural subsidies, which we call the Yellow Line. When we joined the WTO, we stipulated some measures for the management of tariff quotas and promised online restrictions on agricultural subsidies. When we joined the WTO, we promised that subsidies should not exceed 8.5% of agricultural output value, that is, government subsidies that distort production and trade. Now some of our products have exceeded the limit of the yellow line, but we can have a lot of room for regulation. For example, in recent years, the European Union has adjusted its yellow line agricultural subsidies from 70 billion euros to 7 billion euros. We are also studying this experience of the European Union. For example, we have a major policy adjustment this year. We have adjusted agricultural subsidies (grain subsidies and comprehensive subsidies for agricultural materials). After the adjustment, we can use hundreds of billions of comprehensive subsidies for agricultural means of production, which used to be yellow line subsidies. By decoupling subsidies from agricultural material prices, we have turned them into green line subsidies. This problem is a potential challenge for policy formulation. We have a lot of space, our yellow line is far from being used up, and there is still a lot of room for the yellow line to the green line in the future.

Environmental problems have turned on the red light

The biggest problem is resources, the red light of the environment has begun to light up, some aspects of resources and environmental constraints have reached the limit, people are most concerned about the problems of chemical fertilizers, pesticides and plastic films. Our fertilizer use per hectare is among the highest in the world. For example, the problem of plastic film, the use of thin film in Xinjiang Autonomous region alone reached 4.7 million mu of land, most of these films are not degradable, now the residue in one mu of land in Xinjiang has reached 16.5kg, the national average level is much lower, how can degradable film be used to replace the current non-degradable film? This is a big issue for our agricultural environmental governance.

Now China's agriculture must go through a hurdle, we want to open a new era of modern agricultural development, we must change the mode of agricultural development. For a long time, to some extent, we have relied on resources and environmental factors, mainly to pursue the growth of output, and now we must shift to the track with equal emphasis on quantity, quality and efficiency. This year's Central Committee document No. 1 clearly proposes that we should pay more attention to improving the international competitiveness of agriculture, pay attention to technological innovation in agriculture, and pay more attention to the sustainable development of agriculture. To change the mode of agricultural development is to put equal emphasis on agricultural development (quantity, quality and benefit).

To answer this question and change the mode of agricultural development is not at the expense of China's food security. Our complete policy on food security has three meanings:

The first meaning is to emphasize that we should give priority to ourselves, gain a foothold at home, ensure production capacity, and the core is to ensure production capacity.

The second meaning is, moderate import, we have insurance, release, and control. Because we do not have any advantage in resource endowment, we also need to import some grain, grain and other products appropriately.

The third meaning is that ensuring the country's food security must be supported by science and technology.

China is responsible to the world to achieve basic self-sufficiency in grain.

The policy goal we have set now is to be basically self-sufficient in grain. In the past, it was called basic self-sufficiency in grain, which included soybeans. Soybeans can no longer be basically self-sufficient, and the rations are mainly wheat and rice, which should be absolutely safe.

Now some people say that foreign grain is very cheap, why not import it? The problems of agriculture and food are essentially problems of farmers. We often say that farmers earn only a few dozen yuan per mu of land when they grow grain. If you go to the farmer to settle the bill, the farmer will tell you that I can earn 700 to 800 yuan per mu of grain now. Farmers now earn about 754 yuan per mu of grain, 939 yuan for rice, 576 yuan for wheat, 794 yuan for corn and 476 yuan for soybeans. Nowadays, farmers in Northeast China grow fewer and fewer soybeans.

When the farmer calculates how much money he earns, he does not count his labor force, and the countryside does not count the rent per mu of his land, because of his own land, but when we are calculating the cost, I will also calculate the rent for you when we calculate the cost of your own land. it is the same in the United States, we live in our own house, and when we calculate the cost of living for you, we will also simulate how much you need to rent a house.

The first point is why Chinese leaders propose to keep their rice bowls firmly in their own hands. In the international community, they communicate with many economists and foreign policy makers. He very much agrees with such a policy goal put forward by China. First of all, it is determined by China's special national conditions. The population peak of a large country with a population of 1.3 billion will be more than 1.4 billion in the future. Our annual demand is twice that of global grain trade. There is no doubt that if China abandons its goal of basic self-sufficiency in grain, it will have a great impact on the world and the allocation of global resources.

The second point is the core. There are still more than 600 million people in China's rural areas and 200 million people growing grain. Farmers cannot make a living and grain without them. Moreover, he can still earn 800 to 900 yuan from farming. Now it is cheap abroad. I will buy whoever is cheap. There are two prerequisites. Our urbanization must be able to absorb these farmers. These farmers are farmers in the 1950s, 1960s and 1970s. They are all old people, and more than half of them are women. 70% of them are primary school educated. Can our city absorb them? When we analyze the labor force, we should not regard each labor force as homogeneous, the labor force is not homogeneous, and now there is no way for many of the remaining labor force in rural areas to go to the cities. We want to import cheap grain from abroad and abolish the management of our set of tariff quotas on the premise that our peasants can go out and it is impossible to send our peasants abroad. To a large extent, the food problem is the problem of farmers' employment and livelihood.

Third, if China, as a large country with 1.3 billion people, gives up its goal of gaining a foothold at home and achieving self-sufficiency in food, we have told the world, many economists, especially some politicians and decision-makers in developing countries, including officials of the General Food Organization of the United Nations, that this is irresponsible to the world. On the contrary, China has solved the problem of food security for our 1.3 billion people, which is a great contribution to global food security.

To speed up the construction of the system of sustainable development of agriculture, our policy objectives are very clear, and the policy tools are gradually improving. The State Council has adopted the plan for the sustainable development of agriculture led by the Ministry of Agriculture. In this plan, some systematic policies are put forward on how to build a modern sustainable development agricultural industrial system and how to solve the outstanding problems faced by the agricultural environment. For example, the total amount of water use has reached its peak, now the total amount of water use will be reduced year by year, the use of chemical fertilizers and pesticides will achieve zero growth in the next five years, and the resource utilization of straw should be greatly promoted, and now the central finance has supported it. For example, recuperation and recuperation of cultivated land for heavy metal pollution research has been carried out in Hunan, and in Hebei, the central finance supports the comprehensive treatment of groundwater overexploitation areas. In short, the development of agriculture must be transferred to the track of resource conservation, environmental efficiency and circular development.

Promote the depth adjustment of agriculture

Now that the mode of agricultural development is changing, from a policy point of view, we must do a good job in promoting the in-depth adjustment of the agricultural structure, which is closely related to our industrial and commercial circles. The adjustment of the agricultural structure is not a variety of vegetables and flowers, but now it is necessary to advance in depth and breadth, to extend the industrial chain of agriculture, and to develop a variety of functions of agriculture. To develop many new forms of agriculture, it is necessary to maximize the potential value of agriculture. At present, a new formulation is to promote the integrated development of the primary, secondary and tertiary industries. Agriculture is the primary industry, and the greatest characteristics of the agricultural industry are inseparable from the secondary and tertiary industries, one after another. Agricultural products need to be processed, and agriculture is linked with many service industries. In Japan and South Korea, there is a new term called six industries. Agriculture is six industries, which makes agriculture comprehensive.

Our Central Committee document No. 1 this year put special emphasis on tapping the value of rural ecological leisure, tourism, culture and education, and closely combining agriculture with tourism, leisure, and cultural inheritance. Not long ago, I met an official from the Ministry of Farmers and Fisheries in Japan, and he told me a story. After visiting 46 counties in Japan, the envoy of Australia highly agreed with the agricultural versatility proposed by Japan. Because agriculture has a strong function of cultural heritage in East Asian economies (including China), as is the case in any country, the versatility of agriculture has been increasingly recognized by the world in recent years.

There is no trust relationship between the secondary and tertiary industries and farmers.

At present, the outstanding problem facing our Chinese agriculture, our core is to build a new agricultural industrial chain through the integrated development of the primary, secondary and tertiary industries. The biggest problem in our current industrial chain is that there is basically a two-skin relationship between our secondary and tertiary industries and farmers, without long-term contracts, loyalty and trust. For example, our dairy enterprises and dairy farmers are two skins, there is no real establishment of a collaborative supply chain. The World Bank divides the agricultural supply chain into three types (traditional, integrated supply chain). You raise your own cows and make your own fresh milk and milk powder, which is called an integrated supply chain. collaborative supply chains are very common all over the world (especially in developed countries). Producers, middlemen, processors and buyers have long-term contracts, trust, stable relationships and common interests. In this way, the cost will be much lower to ensure the quality and safety of agricultural products.

At present, the proportion of agricultural land transfer is as high as 30%.

When it comes to the issue of large-scale operation of land, one of the most fundamental theoretical basis for our policy on agriculture, rural areas and farmers is that the land should be divided into three rights of rural land. The ownership should be clearly owned by the peasant collective and owned by the members of the peasant collective. Let's clearly define who is the member of the collective in law. We want to stabilize the land contract right of the peasants. Only the members of the collective can contract the collective land. Industrial and commercial capital is a leasing relationship, not a contractual relationship. Under such a premise, we should invigorate the management right of rural land, and the moderate scale of land management is an inevitable trend of China's agricultural development. This process is moving forward without the transfer of human will. At present, the proportion of land contracted by farmers is now as high as 30%, but it is mainly transferred among farmers. At present, the land of industrial and commercial capital transfer accounts for about 10%. The speed and proportion of such transfer is almost the highest in developing countries, which shows that the market for the transfer of land management rights in our rural areas is developing automatically.

However, the process of land transfer depends on our basic national conditions. Since last year, the state has formulated two policy documents. One is a policy document on guiding the orderly circulation of land management rights and the development of appropriate scale operation of agriculture. In April today, the state issued another policy document on industrial and commercial capital leasing agricultural land, a policy document on supervision and risk prevention. A basic policy orientation is to encourage development where there are conditions, and various forms of appropriate scale operation with professional large households, family farms and farmers' professional cooperatives as the main body.

However, two precautions should be emphasized to prevent forced transfer of farmers and to prevent the one-sided pursuit of large-scale, especially super-large-scale. When you look at the place now, it will show you 5000 mu and 10, 000 mu. When you go to Japan, South Korea and Taiwan, it is very difficult to see farms of tens of thousands of mu. Large-scale farms are not suitable for China's national conditions. To prevent and correct the non-agricultural and non-grain conversion of land transfer, in fact, there is a certain degree of control over the transfer of agricultural land, which is a common practice even in countries with private ownership of land. We have carefully studied the laws of agricultural land transfer in many countries of the European Union.

For example, Hungary, after joining the European Union, Hungary spent ten years studying some laws and regulations on land transfer in the entire European Union, and after ten years, Hungary formulated its own agricultural land transfer law.

First, only Hungarian citizens have the right to transfer this law. for example, Austrian citizens have transferred millions of hectares of agricultural land to Hungary, which is still illegal and is not recognized by the law.

Second, there are restrictions on the scale of circulation, as well as the scale of grain and animal husbandry in Hungary.

Third, the procedure is very strict.

Fourth, you can no longer sublet after the transfer, just to prevent speculation.

Our current control and management of circulation is even weaker than that of some EU countries, and we are now in the process of revising the rural land contract law. Some of the provisions of these policy documents will be reflected in the revised Land contract Law in the future.

Today, I was originally talking about two topics, one is strong agriculture and the other is rural beauty. Because of the relationship between time and time, it is a higher policy goal to say that agriculture is strong, rural beauty and farmers are rich, but if agriculture shrinks, if agriculture is vulnerable to international competition, if we do not have to worry about the food problem of the Chinese people, we can rely on the international market to solve the problem. The farmer himself will come to the city to find his happy life, which may be too easy. In the process of modernization, one thing is very clear in China: once the problems of agriculture and farmers are solved, we will have the strength to deal with various risks, and there will be a lot of room for manoeuvre in the development of the economy as a whole.