Accelerate the promotion of agricultural PPP investment

China is in a critical period of "industry feeding agriculture and cities supporting rural development". Although the country's comprehensive economic strength and industrial structure already have the ability of "industry to feed agriculture" and "city to lead the countryside", however, the basic national conditions of the primary stage of socialism determine that it is unrealistic to rely on government investment to feed agriculture and support rural areas on a large scale. Actively using the PPP model to guide social capital investment in agriculture and rural areas is one of the important means to "feed agriculture and support rural development" at the present stage.

The PPP model, also known as the public-private partnership model, or Public-Private-Partnership, originates from the "public-private partnership" financing mechanism in the UK, which means that the government and private organizations form a partnership relationship based on the concession agreement in order to cooperate in the construction of infrastructure projects or to provide certain public goods and services, and define the rights and obligations of both parties by signing contracts. In the end, the cooperative parties can achieve more favorable results than acting alone. Since 2014 (also known as the first year of PPP), the State Council, the National Development and Reform Commission and the Ministry of Finance have issued a series of guidance documents on the "Cooperation Model between Government and Social Capital (PPP)" With the promulgation of the opinions of the State Council on strengthening Local Government debt Management, the guidance of the National Development and Reform Commission on Cooperation between Government and Social Capital and the operational Guide of the Ministry of Finance on the Mode of Cooperation between Government and Social Capital (for trial implementation), PPP has officially appeared as a legal mode of government financing, and the development of PPP has become a national strategy.

I. current situation of Agricultural PPP Investment in China

In recent years, with the deepening of the construction of national modern agricultural system and the strengthening of central support for agriculture, agriculture has become a hot field of investment, and PPP investment in agriculture has begun to emerge.

1. Introduce policies to support agricultural PPP. In order to thoroughly implement the spirit of documents such as the No. 1 document of the Central Committee, the opinions of the General Office of the State Council on speeding up the Transformation of the Mode of Agricultural Development, and the opinions of the General Office of the State Council on further promoting Tourism Investment and consumption, further optimize policies and measures, develop various functions of agriculture, vigorously promote the development of leisure agriculture, and strive to promote the integration of primary, secondary and tertiary industries in rural areas. The Ministry of Agriculture issued the Circular on actively developing multiple functions of Agriculture and vigorously promoting the Development of Leisure Agriculture, pointing out that it is necessary to explore new financing models, encourage the use of PPP model, crowdfunding model, "Internet +" model, and issue private bonds to increase financial support for leisure agriculture. Various localities have successively issued opinions on guiding social capital to invest in agriculture. For example, Zhejiang Province issued the "opinions on encouraging Investment in the Development of Modern Agriculture" in 2014, in which five specific "policy red envelopes" such as finance, taxation and land are clearly defined to guide social capital to invest in modern agriculture.

2.PPP has some practices in investing in agriculture. In recent years, social capital has accelerated its "march" into agriculture, and the scale of investment has increased year by year. Although some of them are small in scale and can not be called the real PPP model, there has been an embryonic form of operation. more and more social capital has chosen the management strategy of market-oriented, specialized division of labor, standardized production and social cooperation to invest in agriculture, organically integrating base development, product processing and market expansion. The main body of social capital investment in agriculture shows a diversified trend, including local capable investment, non-local capital, and even some foreign capital; not only from the secondary industry, construction industry, but also from the tertiary industry. For example, Citic Group set up the agricultural sector, Lenovo Group has been involved in the field of agriculture in the early days. From the perspective of regional development, there are obvious regional differences in social capital investment in agriculture, the agricultural production foundation and investment environment in the eastern coastal areas are superior, the investment in agriculture starts early, the investment scale is large, and the benefit is obvious. however, social capital is still in its infancy in the central and western regions, and the scope of operation and profit space are relatively limited.

The problem of 3.PPP 's investment in agriculture is still prominent. China's agricultural PPP investment began in the 1990s, although there has been some development, but due to the lack of relevant national policy support, the scale and scope of agricultural PPP investment are very limited, there are some outstanding problems, mainly as follows:

First, the continuity of cooperation is poor. The cooperation between some governments and social capital is not in the sense of norms. After the government investment, some take over or the management main body enthusiasm is not high, the operation appears year after year investment, the project is difficult to achieve results year after year, lack of sustainability, in the final analysis, the government investment does not form a stable cooperation mechanism with social capital.

Second, the project is not very attractive. Some agricultural projects themselves are not very attractive and there is no possibility of profiteering. On the one hand, the long agricultural production cycle affects the return on investment cycle, social capital must have enough patience and endurance to wait for the future return of funds. On the other hand, agricultural infrastructure is weak. Large investment in agricultural infrastructure construction, first of all to block part of the social capital outside, even if part of the capital reluctantly entered, it is easy to lead to "short-term behavior."

Third, the investment environment is not matched. First, land resources are relatively scarce. With the adjustment of national land policy, the contradiction of land use is very prominent, especially the shortage of land for agricultural facilities, which restricts the development of facility agriculture or other agricultural projects that need large-scale facility land. Second, rising labor costs and poor follow-up of talent and science and technology services. With the massive transfer of young and middle-aged labor force in rural areas, the problems of shortage of high-quality workers and "difficulty in employment" faced by social capital after investing in rural labor-intensive industries are very prominent. the rising labor cost also affects the profit space of social capital. Third, agricultural financial services lag behind. When social capital invests in agriculture, the lack of collateral or collateral does not meet the requirements of financial institutions, so it is difficult to pass loan examination and approval; the variety of agricultural insurance is small, the coverage is narrow, and the risk of social capital operation is high.

II. Application Prospect of Agricultural PPP Investment

Agricultural PPP investment is the inevitable result of the transformation of China's economic development stage, the transformation of agriculture to modernization and the change of the relationship between rural factors of production, as well as the phenomenon caused by market profit and policy dividend. With the support of the national PPP new policy, agricultural PPP investment will usher in new opportunities.

From the perspective of the agricultural project itself, it has the characteristics of the PPP project. From the nature of PPP model, PPP project has the characteristics of large investment amount, long cycle and high project risk. Successful PPP project requires participants to have the ability to undertake these three characteristics. Some agricultural PPP projects have the following characteristics: first, quasi-public welfare. In the field of agriculture, the utility of some projects is inseparable, the costs and benefits are external, and their social benefits are higher than the direct economic benefits. Therefore, it is necessary for government departments and social capital to cooperate in the whole process on the basis of concession agreement, and both sides are responsible for the whole project cycle. Second, there is a sustained income. Agricultural projects generally have relatively stable benefits, but there will be no exorbitant profits, and project benefits are generally obtained through 10 years, 20 years or even more years of cooperation. Third, the amount of capital investment is large. Social capital investment in modern agricultural projects has a certain technical content, the amount of capital investment is very large, part of government investment, part of social capital financing, joint capital injection to carry out operation.

From the perspective of the demand of the agricultural industry, there is an urgent need for PPP to increase investment. Policy, science and technology, and investment have always been the three major elements of China's support for agricultural development. China's agriculture is still a weak link in the development of the national economy, and the situation of insufficient investment and fragile foundation has not changed. In China, how to stabilize and gradually increase the necessary investment in agricultural development is an important part of consolidating the agricultural foundation. It is far from enough to increase the financial investment of the government. There is an urgent need to increase investment through various channels. In industries such as agriculture, which have a large amount of investment and a long recovery cycle and relatively slow returns, it is difficult to successfully attract social capital. PPP is one of the important means to guide social capital to increase agricultural investment.

From the perspective of changing the mode of investment, there is an urgent need for PPP to innovate and develop. There are many areas and forms of government investment in agriculture, some visible and some invisible. There are financial inputs to the agricultural sector; there are water conservancy projects, rural infrastructure projects, comprehensive agricultural development projects, modern agricultural projects, beautiful villages, ecological forest construction, etc.; there are also funds for drought relief and flood control; various subsidies to farmers, such as direct grain subsidies, subsidies for improved varieties, subsidies for breeding sows, and so on. The government of some basic projects should really realize the transformation from micro to macro, from examination and approval to supervision, from project arrangement to system supply, to achieve the organic combination of government investment and social capital, to make use of PPP to innovate agricultural investment mode, and to really improve the efficiency of investment. PPP is not a free lunch and cannot completely replace financing methods such as bonds.

III. Thoughts on promoting Agricultural PPP Investment

General idea: according to the requirements of relevant state documents, with the goal of strengthening the supply capacity of public goods (services) in agriculture and improving supply efficiency, strengthen top-level design and standardized guidance, and deepen the reform of agricultural investment management system. Through franchising, entrusted management, investment subsidies, government purchase of services, equity cooperation and other ways, encourage and guide social capital to invest in key basic and public welfare areas of agriculture. We will establish a long-term partnership of benefit-sharing and risk-sharing with social capital, and establish and improve an institutionalized, standardized and procedural monitoring mechanism, so as to lay a solid foundation for the simultaneous development of agricultural modernization, industrialization, informatization and urbanization.

Basic principles: first, adhere to the top-level design. A clearer and operable policy system for PPP investment in agricultural projects will be introduced. According to the national main functional regionalization and the layout of agricultural superior industries, the investment of social capital into agriculture should be combined with the development planning of agricultural industry and the construction of all kinds of modern agricultural parks, so that social capital can accurately locate the industry when it enters the agricultural field. avoid blindness and convergence of investment. The second is to persist in pilot demonstration. First of all, we should select some areas with mature conditions, good foundation and exploration and practice as experimental areas (demonstration areas) for social capital investment in agriculture, explore and sum up specific practices and experiences, and then promote them in an orderly manner. Third, adhere to strict access. We should establish an access system for social capital to invest in agriculture, examine and verify the production, operation and performance capabilities required for social capital to engage in agricultural production, do a good job in "access", and establish and improve an institutionalized, standardized, and procedural monitoring mechanism. avoid fraud or change the scope of business midway. The fourth is to adhere to win-win situation. While ensuring that government funds are leveraged, social capital should be made profitable. Establish a close interest linkage mechanism between enterprises and farmers, so that farmers can share the "dividend" of the development and growth of enterprises and increase their income.

The main areas to encourage agricultural PPP investment are as follows: 1. Agricultural park projects. Such projects require the use of government forces to expropriate land and require the early input of financial funds. Once completed, there needs to be a special unit to continue to operate, and the PPP model can be adopted in an agricultural park or experimental area. 2. Rural wholesale market. The large-scale rural wholesale market needs to use the government power to expropriate land, and part of the financial funds are invested in the early stage. Once completed, the government chartered special units to continue to operate, which can completely adopt the PPP model. 3. Rural biogas project. The early investment and propaganda and mobilization of rural biogas need to be promoted by relevant government departments, while the maintenance of biogas digester, repair and maintenance of related equipment need to be completed by special franchise units, and PPP mode can be adopted. 4. Fishing port wharf. The construction of fishing port and fishing boat wharf needs the input of the government, but the operation and management need to be carried out by special units. PPP mode can be adopted to facilitate the economic development of fishing port. 5. Grass-roots animal epidemic prevention system. The construction of rural animal epidemic prevention stations and state-prescribed animal vaccines can be completed through state input, but sustainable operation needs to be completed by special units, which manage the vast number of village-level epidemic prevention workers. In addition, PPP model can be implemented in aquaculture areas, improved variety breeding projects and facility agriculture in the western region.

Operation mechanism: the agricultural competent department shall determine the agricultural PPP investment project, formulate the annual and medium-term development plan of the agricultural PPP investment project, and then introduce social capital through bidding. The social capital will sign a PPP cooperation agreement with the agricultural sector or its authorized agencies, and undertake alone or jointly build a new project company to undertake most of the design, construction, operation and maintenance of the PPP construction project. A reasonable return on investment is achieved through user payments and necessary government investment, while the agricultural sector is responsible for supervising the price and quality of public goods and services.

Policy suggestions on speeding up the promotion of agricultural PPP investment

(1) to formulate an implementation plan for agricultural PPP investment. In accordance with the requirements of relevant documents of the State Council, it is necessary to formulate an implementation plan for agricultural PPP investment as soon as possible, and make a specific explanation on the policy requirements, areas of encouraging investment, and work arrangements for agricultural PPP investment, so that social capital can understand the specific process of investing in agriculture, make clear the interest guarantee mechanism of social capital, and the ways to realize investment return, and take capital income as an attraction to mobilize the enthusiasm of social capital to invest in agricultural projects.

(2) to strengthen the examination of social capital access qualifications. Adjust measures to local conditions, plan scientifically, and make good use of the situation to avoid the loss of capital or even the confidence of reinvestment due to the blindness of social capital entering agriculture. Attach importance to and strengthen the capital review of social capital entering agriculture, especially before the transfer of social capital to farmers' land to develop modern agriculture, it is necessary to evaluate and demonstrate their investment motivation, capital situation, project prospects and management ability. monitor the implementation of social capital investment in agriculture, track the progress of investment, and truly achieve the survival of the fittest.

(3) to establish a guarantee fund for PPP projects. Due to the long cycle and slow investment recovery of agricultural projects, the introduction of medium-and long-term capital needs to be fully guaranteed to meet the capital recovery and reimbursement needs of PPP projects. In order to better arouse the enthusiasm of banks to issue project loans, it is suggested to speed up the establishment of the PPP Agricultural Project guarantee Fund, which can compensate the investment losses caused by non-performing loans caused by the bad loans caused by local governments.

(4) strengthen the evaluation and management of investment projects. It is necessary to carry out supervision and management through key links such as plan forwarding and decomposition, project construction progress, fund use and allocation, comprehensively grasp the distribution and use of funds in agriculture-related fields, and build a comprehensive investment supervision system by relying on various forces. we should resolutely investigate and deal with the outstanding problems in the field of agriculture-related funds, investigate and rectify the wind, plug loopholes, and put forward specific suggestions for accountability. We will promote the formation of an incentive and restriction mechanism that closely connects investment supervision and investment arrangements.

(5) to strengthen the research on issues related to agricultural PPP investment. Agricultural PPP investment is a new thing, which needs to be strengthened. It is necessary to systematically sort out the relevant national policies on PPP, analyze and understand the practice of developing PPP in other industries, summarize the experience of foreign countries in carrying out agricultural PPP investment, follow up and study the domestic investment practice, clarify the classification standards of agricultural PPP projects, and put forward the policy requirements of agricultural PPP investment in a timely manner.