Double squeeze and double restriction of China's Agriculture

The Central Economic work Conference and the Central Rural work Conference held not long ago made some new arrangements for deepening rural reform and speeding up agricultural modernization, especially for speeding up the transformation of the mode of agricultural development. Today, I am very glad to have the opportunity to interpret some important policies of the two meetings.

On the whole, the agricultural and rural economic situation in our country has maintained a continuously good situation. Last year, grain production achieved "11 consecutive increases", with an increase of more than 10 billion jin; farmers' income achieved a rapid growth for 11 consecutive years, which we call "11 consecutive fast." From 2004 to 2013, the per capita net income of farmers increased from 2936 yuan to 8896 yuan, with an average annual growth rate of 9.1%. Generally speaking, the per capita income of farmers increased by about 900 yuan last year, half of which came from the increase in wage income, family operating income by 300 yuan, and various transfer income, including property income, by 150 yuan. It is particularly noteworthy that in the past five years, the growth of farmers' income has exceeded that of urban residents for five consecutive years, which is of landmark significance to the overall planning of urban and rural development. This also shows that a series of pro-agricultural policies of the CPC Central Committee have brought huge benefits to hundreds of millions of farmers. The eleventh consecutive increase in grain and the eleventh consecutive increase in farmers' income have played a vital role in ensuring the stability of the overall macro situation.

The real big test for agriculture after China's entry into WTO has just begun.

What is the biggest change facing agricultural development at present? The Central Economic work Conference and the Central Rural work Conference have made a very in-depth analysis of this, it can be said that the most prominent need to pay attention to four aspects.

First, the ceiling effect of agricultural prices began to appear.

At present, the prices of some major agricultural products are beginning to be significantly higher than those after the import of foreign agricultural products have been taxed on shore, and the prices of domestic and foreign agricultural products are beginning to hang upside down. In 2008, only soybeans hung upside down in agricultural prices, and now the prices of major agricultural products have begun to be higher than the FOB prices in the international market. The prices of some agricultural products, such as cotton and sugar, have broken the ceiling.

At present, important cyclical changes are taking place in the global grain and oil in the short term, especially after the oil price falls below 50 US dollars, which has a very obvious impact on the international agricultural product market. The downward trend in the short term is still very obvious. Therefore, the upside-down prices of domestic and foreign agricultural products may become the norm. This means that the room for price increases in our domestic agricultural products is beginning to be squeezed, which is a new situation that we must face in formulating agricultural policies.

Second, the squeeze of cost floor lifting begins to be reflected.

The cost of agricultural products we call "floor", its continuous improvement of the squeeze on agriculture has begun to be very obvious. As the labor force is becoming more and more expensive, the rent is getting higher and higher, and there are more and more inputs in agricultural production, such as agricultural machinery, chemical fertilizers, pesticides, agricultural film and so on, the cost of agriculture is rising rapidly. To take the simplest example, when we harvest cotton in Xinjiang, the labor cost of harvesting one mu of cotton is 800 yuan, and the mechanization cost can be reduced to 200 yuan. For sugarcane planting in southwest China and Guangxi, it takes five workers to harvest one mu of sugarcane, each of which costs as much as 150 yuan per day. If there is no mechanization, there is no advantage in manual harvesting of sugarcane.

Third, the yellow line of agricultural production and price subsidies is beginning to approach.

We made promises when we joined the WTO (World Trade Organization). For example, subsidies that distort production and trade are called "yellow box subsidies". We promise that the upper limit of subsidies will not exceed 8.5% of agricultural output, including cotton, and our yellow box subsidies for cotton will not exceed 8.5% of agricultural output. It is now approaching the yellow line. Our commitment to trade protection for agriculture is very limited. The average tariff on agricultural products is only 15.2%, 11.4% in India, 35.2% in Brazil, 11.3% in the United States and 22.8% in the European Union. The tariff form is very single and extremely transparent. Many important agricultural products are managed by quotas, with a quota tariff of only 1% and a maximum of only 65% outside the quota.

Under the current trade protection policy, after the price of agricultural products reaches the "ceiling", price-driven imports will continue to increase, and the impact of imports on our domestic agriculture will be inevitable. This makes us face a very serious challenge.

Fourth, the red light of resources and environment begins to turn on.

For a long time, in order to increase the output of agricultural products, there is the problem of over-development and utilization of agricultural resources and serious overdraft in ecology. In some places, the land cannot be planted, the water cannot be irrigated, the old debts of resources and environment have not been paid, and new debts continue to occur. It can be said that agricultural development is faced with the double squeeze of "ceiling" and "floor", as well as the double constraints of "red light" and "yellow line". The commitments we made to agriculture at the time of China's accession to the WTO have been basically unscathed over the past decade, and now, in such an environment, the space for agricultural policy-making is greatly squeezed.

It can be said that the strong entry of cheap foreign agricultural products to us is just around the corner, and the great examination of China's agriculture after China's entry into the WTO has really begun. In the face of these changes, there is only one way out. The Central Economic work Conference and the Central Rural work Conference have made an important plan and must speed up the transformation of the mode of agricultural development.