New Management system and the Future of Chinese Agriculture

Taking a comprehensive view of the world, household management has become the leading choice of agricultural management in most countries. Some countries have tried to replace household management with corporate agricultural management, but on the whole they have not achieved universal success. However, it is not in line with reality to simply deny the trend of accelerating the development of corporate agricultural management as a whole and its comparative advantages in specific fields. The company farm is the organizational carrier of the company-style agricultural management. Using the data of the American farm census from 1997 to 2007, we have analyzed the development and enlightenment of American corporate farms (Jiang Changyun, Zhang Lidong, 2014). U.S. agricultural census data are released every five years, and the latest (2012) U.S. agricultural census data were released in May 2014. On this basis, this paper will analyze the latest development of American corporate farms, in order to promote the transformation of agricultural development in China.

The latest Development of American Corporate Farm and its reasons

Since 1974, the United States Agricultural Census has defined a farm as a place where $1000 or more of agricultural products were produced or sold in the survey year, and divided farms into four types: family or individual farms, partnership farms (Partnership farm), corporate farms (Corporation farm) and other farms. For the sake of simplicity, the family or individual farm is referred to as the family farm in this paper. From 2007 to 2012, the development of American corporate farms mainly showed the following characteristics and trends:

The proportion of corporate farms in the total number of farms in the United States is still low, but the increase in the number and proportion is more pronounced. According to the 2012 U.S. Agricultural Census, family farms are still dominant in the number of farms in the United States, and the number of corporate farms and their proportion in the total number of farms are far from those of family farms. In the same year, the total number of farms in the United States was 2109303, including 1828946 family farms, 137987 partnership farms, 106716 corporate farms and 35654 other farms, accounting for 86.71%, 6.54%, 5.06% and 1.69% of the total number of farms in the United States, respectively. The proportion of family farms and corporate farms in the total number of farms in the United States increased by 0.25% and 0.70% respectively compared with 2007. While the number of family farms has declined, the proportion of family farms in the total number of farms has increased, which has a lot to do with the faster decline in the total number of farms in the United States. While the total number of farms, especially family farms, has decreased, the number of corporate farms has increased significantly. Between 2007 and 2012, the total number of farms in the United States decreased by 4.33%, of which the number of family farms decreased by 4.06%, the number of partnership farms decreased by 20.81%, and the number of corporate farms and other farms increased by 11.08% and 26.72%, respectively. In the 10 years from 1997 to 2007, the number of American corporate farms increased by only 6.24%, and the proportion of corporate farms in the total number of American farms increased by only 0.28 percentage points. Compared with the period from 1997 to 2007, the number and proportion of American corporate farms increased more clearly from 2007 to 2012.

The average operation scale of the company farm is obviously larger than that of the family farm, and the gap between the output scale of the two farms is obviously larger than that of the input scale. The average operating scale of American corporate farms is significantly larger than that of family farms, as can be seen from the change in the proportion of family farms and corporate farms in farm groups of different land sizes. As can be seen from Table 1, although family farms are absolutely dominant in the number of farms with different land sizes, the proportion of family farms shows an obvious downward trend with the expansion of the scale of farm land management. In groups of farms with a size of more than 70 acres, the larger the size of the farm, the higher the proportion of corporate farms. Among the farm groups with a farm size of more than 260 acres, the proportion of company farms in the total number of farms has exceeded the proportion of all company farms in the total number of farms.

It is worth noting that in terms of average land size, the average land size of all farms or family farms in the United States increased from 2007 to 2012, but the average land size of corporate farms decreased. In 2007, the average land size of all farms in the United States was 418 acres, while that of family farms and corporate farms was 301 acres and 1304 acres respectively. By contrast, in 2012, the average land size of all farms and family farms in the United States increased by 3.83% and 2.33%, respectively, but the average land size of corporate farms decreased by 5.67%. On closer inspection, the main reason is that, compared with 2007, although the number of corporate farms in different land size groups increased in 2012, the proportion of corporate farms with land size less than 220 acres in the total number of corporate farms increased from 49.28% to 51.62%. The proportion of corporate farms with a land size of more than 220 acres decreased from 50.72% to 48.38%.

Generally speaking, the scale of farm operation can be observed from two aspects: input and output. At the input level, there are mainly indicators such as farm land area, farm production expenditure, market value of farm land and buildings, market value of farm machinery and equipment, and so on. In the output level, there are mainly agricultural sales, farm net cash income and other indicators. As can be seen from Table 2, the average size of a corporate farm is significantly larger than the average size of a family farm or even an American farm, and the gap between the average output scale of a corporate farm and a family farm is usually significantly larger than that of the average input scale. Related to this, although family farms still dominate in terms of factor inputs, especially agricultural sales and farm net cash income, their dominance is significantly weaker than that reflected in the following two proportions. One is the proportion of family farms in the total number of farms in the United States, and the other is the proportion of the land area of family farms in the total land area of American farms (see Table 3 for details).

The degree of specialization and intensification of the company farm is obviously higher than that of the family farm, and the land output rate of the company farm is also significantly higher than that of the family farm. In 2012, farmers accounted for 64.30% of the main operators in the United States, 46.20% for family farms, 57.99% for partnership farms and 40.01% for other farms, and 65.87% for family-owned corporate farms and 51.37% for non-family-owned corporate farms. Compared with 2007, the main occupation of the main operators in 2012 was the proportion of farmers, which increased to a certain extent in different types of farms. Although the increase in the proportion of corporate farms is smaller than that of family farms, partnership farms and other farms, however, the proportion of people whose main occupation is agriculture on corporate farms, especially those held by families, is still significantly higher than that of family farms, partnership farms and other farms (see table 4).

From the comparison of agricultural sales or farm net cash income with the proportion of farm land area in Table 3, it can be seen that the land output rate of American corporate farms is significantly higher than that of family farms, partnership farms and other farms. For example, in 2012, the sales of agricultural products per unit land area of company farms were 2.28 times that of family farms, 1.45 times that of partnership farms, and 7.77 times that of other farms. However, compared with 2007, the gap in land output between family farms and corporate farms narrowed slightly in 2012. In 2007, the sales of agricultural products per unit land area of the company farm is 2.61 times that of the family farm.

The comparative advantages of the company's farms are mainly concentrated in a few areas, especially in the production of agricultural products with weak seasonal influence, controllable modern science and technology and high added value. If the distribution of family farm management in the United States is "universal flowering", then the choice of corporate farm management is a "key breakthrough". As can be seen from Table 5, the areas where American companies have a significant advantage in the number of farms are mainly concentrated in ① nurseries, greenhouse plants, horticultural flowers, turf and ② aquatic products, accounting for 20.43% and 18.67% of the total number of farms producing this kind of agricultural products in 2012, respectively, significantly higher than the proportion of corporate farms in the production of other agricultural products. The areas where the company's farm agricultural sales have significant advantages are mainly concentrated in: ① nursery, greenhouse plants, horticultural flowers, turf; ② aquatic products; ③ vegetables, melons, tomatoes, sweet potatoes; ④ fruits, nuts, berries; ⑤ Christmas trees, perennial forest plants; ⑥ pigs; ⑦ cattle, calves; ⑧ poultry and eggs. In the sales of the first four types of agricultural products, the proportion of company farms reached 70.60%, 50.37%, 44.40% and 40.11% respectively, which was 54.08%, 30.05%, 18.71% and 11.47% higher than that of family farms. These areas tend to belong to facility agriculture, organic agriculture and large-scale farming industries that are less affected by the weather, usually with a higher level of specialization and intensification, less affected by seasonality, more controllable modern technology and greater added value.

The operation field of the company farm is mainly focused on the above special aspects, the main reasons are: first, compared with the family farm, the operation of the company farm tends to be more profit-oriented, and most of these areas have higher elasticity of demand and income and higher added value. Second, these areas often need more investment, updated development concepts, higher level of science and technology application, stronger industrial chain integration and the ability to connect the middle and high-end markets. The larger the scale of the farm land, the stronger the demand for opening up financing channels and agricultural products markets, docking science and technology and middle and high-end markets, and strengthening the integration of the industrial chain. as a result, the comparative advantages of the company's farm in capital, technology, development concept and industrial chain integration are rapidly highlighted. Third, compared with conventional agriculture, facility agriculture, organic agriculture and large-scale farming, which are less affected by the weather, through the large-scale integrated application of modern science and technology and development concepts, it can effectively avoid the constraints of long agricultural production cycle, strong seasonality, difficult risk control and other factors to attract investment in corporate farms. As agriculture is the unity of economic reproduction and natural reproduction, agricultural development is not only restricted by market risks, but also tested by natural risks; nowadays, the energy and financial development of agricultural products in the world, it also increases the difficulty of agricultural risk control.