A warning of career ups and downs of a "star farmer"

The direct reason for the failure of Lu Guoping, the "star farmer", is that the capital chain is broken due to blind expansion and ignoring business risks. but what is exposed behind is the development "deficiency" of some professional farmers, such as backward management concept, lack of professional management talents, low personal professional accomplishment and so on.

From a model of professional farmers with a scale of 60,000 mu and an annual turnover of more than 100 million yuan, to a career "cliff-style" collapse, with hundreds of millions of yuan in debt, Lu Guoping, a "star farmer" in Jiangxiang Town, Nanchang County, Jiangxi Province, is on the verge of bankruptcy.

What is the enlightenment of Lu Guoping's experience to the new agricultural management body which is in the period of transformation and upgrading? Yin Xiaojian, deputy director of the Institute of Rural Economics of the Jiangxi Academy of Social Sciences, said that the current "professional farmers" have accumulated some experience and capital through early land transfer and management. However, they still have some defects, such as pursuing quantity, neglecting quality, poor risk control ability and so on.

Experts suggest that as professional farmers, they should upgrade their operation and management capabilities and industrial development in a timely manner, avoid inefficient expansion, pay attention to quality development, and improve their ability to avoid risks.

Capital fracture "Agricultural Kingdom" collapsed for three years

In 2012, at the peak of his career, Lu Guoping, a farmer in Jiangxiang Town, Nanchang County, Jiangxi Province, had eight honorary titles at the national and provincial levels, such as "National Model worker", "National pacesetter for growing Grain" and "talents with Outstanding contributions to Jiangxi Province". Lu Guoping is a "star" in the hearts of the local people.

At that time, Lu Guoping's agricultural industrialization company, Jiangxi Guowang Industrial (Group) Co., Ltd., which focused on efficient planting and breeding demonstration, agricultural eco-tourism, agricultural products processing services, and agricultural socialization services, was the benchmark and banner for the development of agricultural industrialization in Jiangxi. The company has more than 500 employees, with a total operating area of 65000 mu and an annual turnover of nearly 200 million yuan.

Recently, the reporter saw Lu Guoping again. After subcontracting, cash and repayment, at present, the industry managed by himself has only more than 1000 mu of special fish breeding base, the remaining staff is less than 50 people, and the door of the company's office is locked, dilapidated and desolate. According to incomplete statistics, Lu Guoping's Guowang Company and its related agricultural industrialization companies owe the bank debt principal balance of more than 80 million yuan, and private loans of 150 million yuan.

"if the capital chain is broken in 2013, there will be no money to buy feed. This is the 'yellow tooth head' put down at that time, and now it is not 10 centimeters long after three years. Many people have come to visit the company, but no one has come for a long time now. " From the farmers' entrepreneurial "model" to the career "cliff" decline, standing in the only remaining breeding base, Lu Guoping's tone is low.

Lu Guoping's story has to be told from the time when he abandoned business in 1999. Jiangxiang Town, located on the bank of Poyang Lake, is a famous "land of fish and rice" in Jiangxi. However, at the end of the last century, due to backward farming methods, heavy agricultural taxes and fees, and the rise of the tide of migrant workers, a lot of local arable land was abandoned.

In 1999, Lu Guoping keenly smelled the business opportunity for the development of agricultural industrialization from the large-scale mechanized farming operation in developed provinces. He returned to Jiangxiang Town, Nanchang County, and transferred 1080 mu of paddy fields to the village at a price of 200 yuan per mu, becoming the first batch of "professional farmers" in Jiangxi to cultivate fields on a large scale and mechanized throughout the process. Jiangxi Guowang Industrial (Group) Co., Ltd., established in 2003, is the first company in Jiangxi to operate more than 10,000 mu of farmland, operate agricultural production in a corporate mode, and develop diversified operations such as breeding, wholesale and import and export of agricultural products.

Tu Yongxin, deputy general manager of Guowang Company, said that before 2010, on the one hand, Lu Guoping gradually expanded and developed large-scale agriculture, reaching 60,000 mu in 10 years, realizing diversified economy and deep processing in rice, fruits and vegetables, and aquaculture. On the other hand, he began to focus on rural leisure tourism. In 2011, Lu Guoping planned the industry into four parts: efficient planting and breeding demonstration, agricultural products processing, agricultural socialized services, and agricultural eco-tourism.

"during this period, the state abolished the agricultural tax, increased investment and policy support to agriculture, and the company developed smoothly." Tu Yongxin said. In May 2009, the National Agricultural Comprehensive Development work meeting, Guowang Company farm became an on-site reference point of view. In November of the same year, some media publicized him, together with Huaxi Village and Xiaogang Village, as a typical example of rural reform and innovation. Lu Guoping and his Guowang Company became the benchmark for the development of agricultural industrialization. At the end of 2012, Lu Guoping's career reached its peak.

'that 's when the company was in crisis, 'Mr. Tu said. In the process of industrial expansion, Lu Guoping invested the money earned in the early stage and bank loans totaling 240 million yuan into the construction of agricultural infrastructure one after another. By 2013, the company will have to repay 20 million yuan in principal and interest on maturing loans every month. Under the circumstances of the national economic situation, the banks tightened the monetary policy, and Lu Guoping's capital chain broke quickly.

According to Lu Guoping's own statistics, between 2013 and 2014, he repaid 200 million yuan in bank loans, basically draining his capital flow. At the same time, he still owes 150 million yuan in private loans, and the company is in trouble because of lack of money.

What is more worrying than the deteriorating business performance is that some local people, agricultural executives and banks have all mentioned that Lu Guoping is suspected of gambling abroad with loan funds.

The "Triple mistakes" behind the fall of "Star Peasant"

On the face of it, the "cliff" collapse of Lu Guoping's agricultural production and operation was due to the fact that the bank "turned its face and did not recognize people", leading to a break in the capital chain. In fact, what is hidden behind this is the shortcomings such as blind expansion of professional farmers, poor management organization, low professional accomplishment, hidden moral hazard and so on.

"the good momentum of development in the early stage has made everyone ignore the risks of operation." Lu Guoping said: after becoming a model, the speed of our own expansion can not stop, and the government does not allow us to stop, give it to us if there is a policy, and finally go on all the projects that can be carried out. Lu Guoping has also become a "hot cake" in the eyes of many commercial banks, vying for loans to them.

Focusing only on scale and neglecting quality, expansion brings huge risks. Tu Yongxin said that the investment of more than 1500 mu of orchards was wasted because of the long production cycle and even before there was a profit. In order to expand, Lu Guoping continued to go to the bank for loans and successively invested about 300 million yuan in infrastructure construction, and only 5000 mu of special fishery breeding base invested 125 million yuan in this project. And all bank loans are one-year loans, short cycle, high interest, can not adapt to the long investment cycle of agricultural production.

Lack of professionals and lack of innovation are also important reasons why Lu Guoping is in trouble and is difficult to get out of. "most of the people who start a business together are old friends and brothers with low level of knowledge, and they lack advanced management skills." Lu Guoping said that in 2010, he wanted to carry out a joint-stock transformation of the company to form a management system in which benefits were linked to employees' income, but it came to nothing in the face of opposition.

"in 2012, Guowang hired a group of management personnel with an annual salary of 300000 yuan, but they were not familiar with how agricultural enterprises should be operated and managed. These people stayed for a year and left, which did not help the enterprise to get out of its predicament." Hu Yuening, another deputy general manager of Guowang, said.

In addition to the factors of blind expansion and management, personal accomplishment and credit risk are also important reasons for Lu Guoping's failure. According to a series of credit reports made to him by Lu Guoping's main financing banks, Lu Guoping defaulted on bank loans in 2012. During the post-loan inspection, it was found that Lu Guoping had a large number of private loans during the credit period, because it was understood that Lu Guoping was suspected of gambling abroad. During the same period, some guarantors were no longer willing to guarantee Lu Guoping's loans, and other banks also paid off Guowang's loans one after another.

Surveys of financial institutions also show that Lu Guoping made 46 visits to Macau between 2012 and 2014, including 33 in 2012.

The reporter found that since 2013, creditors have successively applied to the court for enforcement of Lu Guoping's maturing loans.

In response, Lu Guoping responded that he had indeed been to overseas casinos when accompanying customers and the company's personnel on a trip. "but they all play too little to endanger the operation of the company."

"Professional Farmers" are in urgent need of Transformation and upgrading

The name of Lu Guoping's company is "Guowang", which means that the company is prosperous with the country. "at that time, 'Heaven helps, people are willing to do it', it is indeed brilliant, and now I still think of it with enthusiasm." Lu Guoping recalls that period of rapid expansion, still showing unconcealed excitement.

Employees who are still holding on to the company say they are working hard to get out of trouble and get back on track. "the company's predicament is caused by mistakes in decision-making." Lu Guoping's younger brother Lu Liping said that the company was founded and that the company could not leave when it was in trouble.

However, now Lu Guoping is facing a new situation of rural land transfer and accelerated development of agricultural industry to "make a comeback".

At present, Lu Guoping has successively sublet more than 10,000 mu of paddy field for a period of two years at the price of 800 yuan per mu, and adopted the way of prepaid rent. to solve the arrears of more than 7 million yuan in farmland rent and their own operating funds gap; more than 40 million mu of aquaculture lake has been sublet to other agricultural enterprises; and more than 5000 mu of special aquatic products base is subcontracted by him and the company's more than 50 veteran employees.

Lu Guoping said that drawing lessons from the past, he now devotes himself to production management and focuses on breeding special aquatic products. At the same time, he is in talks with the local village committee to extend the land transfer contract, and is preparing to cooperate with other technology enterprises to develop the "Yuguang power generation" project in the early stage, so as to increase the income of surface farming. "as soon as the business improves, I will take back the subleased property." Lu Guoping said.

However, Lu Guoping faces the biggest difficulty if he wants to recover. The reporter learned that 1300 mu of the more than 20, 000 mu of farmland he transferred before is long-term, and 3000 mu of farmland due within 10 years, and most of the farmland will expire within 5 years.

A cadre of the local agricultural bureau said that when Lu Guoping signed the farmland transfer contract at that time, the transfer price was about 250 yuan per mu, and now the local farmland transfer price has reached about 600,800 yuan per mu, and then he is under great pressure to continue the transfer contract.

Yin Xiaojian said that China's agricultural production is in a period of transformation and upgrading, and "professional farmers" should promptly upgrade their management capabilities and industrial development, avoid inefficient expansion, pay attention to quality development, and improve their ability to avoid risks. At the same time, it is necessary to improve credit awareness and personal accomplishment.

At the same time, the government should also establish a dynamic follow-up management and assistance mechanism to guide and solve the problems and difficulties in the development of professional farmers. However, it is necessary to prevent 'disliking the poor and loving the rich' or even for the sake of political achievements, constantly using the government's preferential policies to 'base large families' to lead to the concentration of risks. " Yin Xiaojian said.