How does the processing run by the Cooperative stride from "small play" to Industrial Integration

Editor's note: the development of agricultural products processing by farmers' cooperatives is a trend in recent years, which is of great significance to extend the industrial chain and value chain, promote farmers to share the value-added benefits of processing and circulation, and promote the integration and development of the primary, secondary and tertiary industries in rural areas. At present, more than half of the 1.53 million farmers' cooperatives across the country have moved from simple farming and harvest to integrated production, production and marketing. However, due to limited funds, lack of technology and other reasons, the level of cooperative development of agricultural products processing is generally low, and the value-added effect is limited.

"the warehouse price is 2.5 yuan per jin." On June 30, the last batch of crisp pears sent by the Yaohua Fruit Industry Professional Cooperative in Qixian County, Shanxi Province to the UK had just been transported from the air-conditioned warehouse to the processing and packaging workshop, looking at the workers who were sorting, primary processing and packaging, said Yan Weiyao, president of the cooperative.

Last autumn, the land price of crisp pears once fell to 0.3 yuan per jin. After several months of storage and primary processing, the increase in income of members of the professional cooperative of Yaohua Fruit Industry is self-evident.

Yaohua Fruit Industry Professional Cooperative is a national farmers' cooperative processing demonstration unit and a national farmers' cooperative demonstration society. Over the past 10 years, cooperatives have found a way to integrate planting, primary processing and sales. At present, the annual domestic sales volume is 30 million jin and the international export trade is 20 million jin.

The entry of cooperatives into the field of processing can extend the industrial chain and value chain and promote farmers to share the value-added benefits of processing circulation. How far can go and how to go further has become a problem for cooperatives.

The "Blue Ocean" of Cooperative Development-- obtaining more Market Space in the whole Product supply chain

In the same year, Yaohua Fruit Industry Professional Cooperatives obtained the first batch of farmers' cooperative processing demonstration units in Yushe County, Shanxi Province, and Sanliwan planting Cooperatives in Wuxiang County chose the direction of extending from planting to processing and marketing.

"without processing, the profits are too low, and the prices of agricultural products go up and down, and life is very difficult." Wang Jianfu, president of Heyu Xiaomi Professional Cooperative, said.

Wang Jianfu's feeling is the survival reality of farmers' professional cooperatives. After years of development, cooperatives have played a main role in realizing agricultural scale, modernization and farmers' docking market, the status of primary agricultural producers has made many cooperatives difficult to live, and cooperatives have once again stood at a new historical starting point.

In China, the agricultural product processing industry is relatively backward. The average ratio of domestic agricultural product processing industry output value to agricultural output value is only 2.2 ∶ 1, while in most developed countries it is 4 ∶ 1.

"the horizontal is the distance, and the vertical is the space." Li Yuefeng, director of the Agricultural products processing Bureau of the Shanxi Provincial Department of Agriculture, said, "the practice of developed countries is to encourage cooperatives to run processing, and to improve the market competitiveness and profitability of cooperatives by extending to the processing link, which is also the development direction of cooperatives."

From 2014 to 2015, 22 cooperatives in Shanxi Province became national farmers' cooperative processing demonstration units. Compared with the traditional "company + peasant household" model, this new agricultural industrialization management model, which is formed through the self-establishment and processing of cooperatives, shows obvious institutional advantages compared with the traditional "company + peasant household" mode. it breaks the situation of the company monopolizing the agricultural product processing industry and ushered in a new force for agricultural product processing.

Cooperative processing has formed an independent "producer-consumer" full-product supply chain, which makes farmers get rid of the situation that they can only compete with upstream and downstream suppliers in the nodes of agricultural products supply chain. The advantage of this is that it not only overcomes the inherent defects of primary agricultural products, but also shortens the distance with end consumers, thus having more room for manoeuvre in the market competition.

This means that the processing run by the co-operative has found a "blue ocean" for itself.

The old deficiency has become a new problem for processing-- the congenital strength is weak and the acquired power is insufficient.

Sanliwan planting Cooperative in Wuxiang County specializes in the production and processing of organic stone mill flour, organic yellow millet, organic black millet, manual hanging noodles, miscellaneous grain flour and other products. The number of participating farmers has reached 2380, with a planting base of 10000 mu and a processing base of 20010 square meters.

"everyone is in a simple stage of initial processing." Cao Jianming, head of the Agricultural products processing Section of Jinzhong Agricultural Bureau, said. The basic situation of Sanliwan Professional Cooperative and Yaohua Fruit Co-operative Society confirms this point.

The proportion of processing cooperatives in Shanxi Province is very small, most of them are simple initial processing, and only about 2% of them are processed at a higher level. Due to the late start, cooperatives engaged in the acquisition, storage, preservation, packaging, primary processing, transportation and marketing of agricultural products, the amount of secondary processing is very small, finishing is basically zero, and the added value is not high.

"lack of products, lack of funds, short industrial chain, non-standard operation and little support." In the face of a reporter's question about where the processing of cooperatives is difficult, Li Yuefeng mentioned five aspects at once.

Small scale, weak strength, lack of funds and financing difficulties are the old shortcomings of cooperatives. In the face of the establishment of the processing industry, the initial processing has become a helpless choice. Moreover, the profit level of cooperatives is not high, they have to pay dividends to farmers every year, and the accumulation of funds is slow. In addition, cooperatives are not legal financing subjects in the eyes of banks, which makes it difficult for cooperative processing to develop from a high starting point.

At the same time, the lack of processing talents has also led to the lack of agricultural products processing and innovation capacity of cooperatives, and it is basically out of sight to move forward to deep processing and finishing. Compared with the processing run by the company, the cooperative has lagged far behind from the very beginning. This means that at present, only large and profitable cooperatives have the conditions for processing.

"to introduce advanced technology, one is short of information and the other is short of funds." Wang Jianfu, president of Heyu Xiaomi Professional Cooperative, said. What worries these directors is that the cooperative processing office does not have a very strong support policy in Shanxi. Policy is a signal for enterprises to move towards, and the lack of signal makes them worry about processing.

As a result, the government uses fiscal policy and financial policy to provide cooperatives with services such as technology, talent supply and financing, so as to enhance the comprehensive development capacity of cooperatives and let more cooperatives participate in processing. and then through improving the processing degree of primary agricultural products to increase the income of farmers, has become the inevitable choice for the upgrading of modern agriculture.

A New path to self-growth-- establishing a United Society to promote the sharing of Internal Resources

Besides, is there another possibility of self-growth?

In September 2015, the first joint association of farmers' professional cooperatives in Qixian County, Shanxi Zeou Fruit Industry specialized Cooperative Association, was established.

The association is initiated by the Yaohua Fruit Industry Professional Cooperative. Also participating in the association are professional cooperatives of Jingjing Fruit Industry, Corundum Fruit Industry and Sanxin Fruit Industry, which are engaged in fruit production, processing and marketing, involving 11 villages, 173members and 1828 mu orchards in Guxian Town of the county.

The establishment of the United Society turned the stand-alone farmers' professional cooperatives into a joint fleet of fruit industrialization. At present, the Associated Press has a sales window of crispy pears in more than 30 large and medium-sized cities across the country. With the advantage of self-export, its products are exported to more than 10 countries and regions in Southeast Asia. This year, Yonhap's strategic goal of expanding the European market has been achieved.

Cooperatives working together to do processing is the only way to make most of the profits in the agricultural industry chain belong to farmers, and it is also the choice of how to protect the interests of farmers under the general trend of agricultural transformation. After the combination, the problems of less funds and small scale can be alleviated, not only to realize the integration and sharing of internal resources in processing, but also to extend the industrial chain to the sales link, expand the field of leisure and sightseeing agriculture, and realize industrial integration. it is possible for farmers to share more industrial dividends.

In fact, in recent years, many cooperatives have seen this, and some have cooperated effectively at the cooperative level. However, the market position of the United cooperative is as awkward as that of the farmers' professional cooperatives, and the provisions of farmers' freedom to join and withdraw from the cooperative make it difficult for banks to recognize as the main body of the market with full capacity.

"therefore, it has become an urgent problem to amend the Cooperative Law, to make cooperatives become new business entities of equal status, and to introduce support policies with high gold content for cooperatives, so as to accelerate the development of cooperative processing." Li Yuefeng said.

Picture: Lianwanjia shallow water lotus root professional cooperative in Xiangshui County, Jiangsu Province, relying on more than 4000 mu of shallow water lotus root, develops lotus root slices and lotus root juice processing, and the products are sold to Japan, South Korea and Southeast Asian countries. This year, the cooperative cooperated with a tourism company in Shanghai to develop tourism projects in the shallow lotus root base to increase output benefits.