Status and Development Countermeasures of Moderate-scale Management of Grain and Oil in Nanchong City

Chunlei PU*, Shaolin FANG2, Wenbin HE3, Li LIU, Feng LUO

1. Nanchong Agricultural Technology Extension Station, Nanchong 637000, China; 2. Peng’an Agricultural Technology Extension Station, Peng’an 637800, China; 3. Xichong Agricultural Technology Extension Station, Xichong 637200, China

Abstract This paper introduces the development status of moderate-scale management of grain and oil in Nanchong, analyzes the existing problems in production and management, puts forward some suggestions in terms of fund, science and technology and industrial structure, and lists some cases for reference, so as to provide a direction for the operation of grain and oil in Nanchong.

Key words Grain and oil, Scale management, Status, Problem, Countermeasure

1 Introduction

Nanchong is a large grain and oil producer in Sichuan Province. Its total grain output has ranked first in the province for 15 consecutive years, and total rapeseed production has also maintained the second place in the province for many years. Un-weakened production capacity and maintained total production of grain and oil in Nanchong City play an important role in ensuring the food security of the whole province and even China. In recent years, with the implementation of the policies of encouraging moderate-scale management in China, the scale management of grain and oil in Nanchong has also made great progress. However, there are still some problems in the development process, which restricts the further expansion of the scale area and restricts the further enhancement of the strength of the subjects. Based on the investigation and research, combining years of experience in the promotion of moderate-scale management policies, this paper discusses the development status of moderate-scale management in Nanchong, analyzes the existing problems, and puts forward countermeasures and suggestions to provide reference for decision-making departments.

2 Development status

2.1 Fast development speed and initial formation of scaleThe No.1 document of the Central Committee of the People’s Republic of China in 2016 explicitly stated for the first time that it encourages the development of various forms moderate-scale management. After years of policy promotion and subject culture in Nanchong, the moderate-scale management of grain and oil has developed rapidly, and the scale area has increased by nearly five times in six years. After verification, it was 6 600 ha in 2013, 6 666.7 ha in 2014, 8 733.3 ha in 2015, 13 333.3 ha in 2016, 30 000 ha in 2017 and 31 333.3 ha in 2018. The annual arable land area of Nanchong City is 302 600 ha. At this time, the area of scale management has accounted for 10.4% of the total area of arable land, and the city’s moderate scale management of grain and oil has initially formed.

2.2 A large number of individuals and gradually appearing driving effectSome literatures show that in 2015, the number of scale households in Nanchong City ranked third in the province. In fact, the number of grain and oil scale households in the city was 3 013 in 2017 and 3 500 in 2018. Nanchong City has jurisdiction over 9 counties (cities, districts), 399 towns (townships), and 5 266 villages. The average number of grain and oil scale households in each county (city, district) was 389, in each town (township) was 9, and in three villages was 2. The large number of individuals and the novel production methods have formed a huge impact and a strong drive, which is quite advantageous to transforming the traditional backward household production mode to modern moderate-scale operation, promoting the increase in output of grain and oil, and ensuring the food security of China.

2.3 Same subject types and partially relieved agricultural contradictionsAccording to statistics, in 2018, the types of subjects that enjoy the subsidy for large grain production households are shown in Table 1. Among the grain and oil subjects that meet the subsidy standards (more than 2 ha), there were 28 family farms, 135 farmer professional cooperatives, 5 land joint stock cooperatives, 19 leading enterprises, 1 032 grain production households, and one of other type. These various forms of moderate scale management, which are developed according to different conditions, play an important role in solving various agricultural contradictions in Nanchong. For example, the transfer of unmanned and incapable cultivated land can alleviate the shortage of rural labor; the fertility of farmland that is transferred from migrant workers to scale households will be maintained; and the normal ploughing, seeding and field management of scale operators will solve the problem of extensive production.

Table 1 Types of grain and oil subjects that enjoy subsidies for large grain production households in Nanchong City in 2018 (more than 2 ha)

3 Problems

3.1 Weak basic conditions, restricting the degree of scalizationFirst of all, the geographical conditions are poor. In Nanchong, each of the landforms of shallow hill-flat dam, medium hill-medium valley and high hill-low mountain accounts for roughly one-thirds. Irregular shape, small area and large slope are not conducive to large-scale mechanical farming. Second, the infrastructure is poor. The area of well-facilitated farmland in Nanchong is less than half of that of the arable land. The imperfect irrigation canal system and the imperfect mechanical tillage roads lead to no guarantee of high and stable production. These unfavorable factors have made the moderate-scale management rate of Nanchong City low, only 10.4%. In Chengdu, the moderate-scale management rate has exceeded 53%[1]. The scale of the business entities is generally small, and owners with more than 2 ha of grain and oil account for only one third of the total number of scale households. In short, the degree of moderate scalization of grain and oil in Nanchong City is relatively low.

3.2 Low modernization level, restricting the growth of subjectsFirst of all, the technical strength is weak. Most of the grain and oil owners in Nanchong City are ordinary farmers from ordinary households. They have low culture and weak technology, and lack professional technical personnel in production and management. They don’t dare to use new technologies, new varieties, new models, but dare to explore forward. As a result, there is no fundamental change in the mode of production. Second, the degree of mechanization is low. Most scale subjects have a low starting point and a thin foundation. They have tried the best to buy simple equipment such as tillage machine and thresher. For large equipment such as drying machine, they have been deterred. According to the statistics of Nanchong Agricultural Technology Extension Station in 2017, they are only 28 grain and oil owners with drying equipment throughout the city, and the daily drying capacity of about 50% of the equipment is below 20 t. Undoubtedly, the low level of modernization serious restricts the strength of the grain and oil producers in Nanchong.

3.3 Low economic benefits, discouraging owners’ enthusiasmEconomic benefits are the ultimate goal of large-scale management, and low benefits are bound to dampen the enthusiasm of the owners. In recent years, due to the decline in the enthusiasm of large grain production households for planting, it is not uncommon to see the phenomenon of "breaking the contract and abandoning farming"[2]. After analysis, it is believed that the adverse factors affecting the benefits are mainly the following. First, the yield is not high. Weak professional technology, low production level, low mechanization degree and high labor intensity lead to not high yield and big difficulty in hiring workers in the peak season, and sowing and harvest are sometimes forced to be postponed, resulting in reduced production. According to sample survey statistics, the rice yield of most large grain production households in Nanchong is about 6 750 kg/ha, and the rapeseed yield is less than 1 950 kg/ha. According to the statistics of Nanchong Municipal Bureau of Statistics, the average annual yield of rice in the city is 7 875 kg/ha, and that of rapeseed is 2 850 kg/ha. Obviously, the yields of grain and oil of large households failed to reach the city’s average levels. Second, the cost is greater. The purchase of agricultural materials and land rent already require a large amount of money. Due to the lack of nursery facilities and insufficiency of drying equipment, a lot of labor is required, which doubles production cost. According to the survey results shown in Table 2 and Table 3, the material costs of rich and maize were 2 944.5 and 2 550.3 yuan/ha, respectively, and labor costs were 6 323.4 and 3 660 yuan/ha, respectively. Taking land rent into account, the average production cost of rice was 14 968.2 yuan/ha, and that of maize was 10 110.3 yuan/ha. The overall cost of grain and oil production was relatively large. Third, food prices are low. Although China has implemented minimum purchase price policies for rice and wheat since 2004 and 2006, due to international and domestic environment, the overall food prices are still low[3], around 1.20, and they are trending downward. What is even more disadvantageous is that the rating for purchase by the state treasury only depends on the appearance, regardless of quality, which cannot achieve high quality and good prices and is very unfair to the grain and oil producers with a large number of high-quality varieties. Fourth, the chain is too short. Excepting some leading enterprises, most of the scale households have not extended the industrial chain, and instead, they just only follow the production mode of growing grain and selling grain. As shown in Table 1 and Table 2, in the growing grain-selling grain production mode, the average output of rice was only 2 373.9 yuan/ha, and the average output of maize was only 1 613.7 yuan/ha. Although the output of grain and oil of individual owners can reach 4 500-7 500 yuan/ha, it is believed that this was actually caused by the unreasonable calculation method. The reasons included small scale, fewer people hired, and exclusion of family labor in cost. In addition, some owners had undertaken the projects, and they are able to obtain more material subsidies from relevant departments, reducing production investment. Considering the scale management in the whole city, the chain is too short, and there are no insufficient revenue channels, which should be the most important reasons that the efficiency of scale management cannot be significantly improved.

Table 2 Survey on production cost of rice in scale management in Nanchong City in 2018

Table 3 Survey on production cost of maize in scale management in Nanchong City in 2018

4 Countermeasures and suggestions

4.1 Increasing funding support and increasing production capacity

4.1.1Increasing financial input. On the basis of proposing to increase national policy subsidy standards such as subsidies for large grain production households and subsidies for purchasing agricultural machinery, local finance should also appropriately introduce local subsidy policies, leveraging the leading role of financial funds to drive social capital to participate in moderate-scale management such as machinery purchase and warehouse construction and other operation activities, and accelerating the optimization of grain and oil production facilities and equipment. For example, in Xichong County, Peng’an County, Jialing District and other counties, local subsidy policies for the purchase of agricultural machinery equivalent to the national subsidy standard or an additional subsidy of 50% have been introduced for farmers’ cooperatives in recent years. This makes it more favorable for local scale owners to purchase agricultural machinery than for those in other counties.

4.1.2Giving project priority. In terms of agricultural product engineering arrangement, the implementation site should be selected in scale area as much as possible to promote the construction of mechanical tillage roads and the renovation of irrigation canal system and other infrastructure in the area using project implementation. In terms of allocation of grain and oil project funds, the proportion of scale owners should be increased properly to minimize production input as much as possible and complete capital accumulation as soon as possible, thereby promoting a fundamental change in production methods. For example, the crop rotation organized by the municipality and counties of Nanchong City each year is carried out on the transferred land from scale owners, which helps the owners improve the basic conditions. Another example is that the city’s food production bonus is rewarded to scale households, which helps some owners realize the purchase of machinery.

4.1.3Innovating financial support. First, agricultural policies and insurance needs to be improved. Through borrowing insurance, production capacity will be enhanced, and operational risks will be reduced[4]. Second, agricultural credit guarantees need to be improved. In particular, the financial policies for "subsidy for moderate-scale management of grain" in agricultural credit should be fully utilized. It is estimated that after the central government launched a subsidy policy for cultivated land fertility protection from 2015, about 400 million yuan of credit funds have been provided to Nanchong City for moderate-scale management. If we can make good use of this part of financial funds, it will definitely promote the development of moderate-scale management in Nanchong.

4.2 Strengthening scientific and technological assistance and improving technical level

4.2.1Transmission of scientific awareness. Scientific production awareness and advanced management concepts need to be instilled in the owners. High-quality, high-yield and high-resistance new varieties are recommended to the owners to ensure a good harvest. They are encouraged to carry out new two-season cropping mode that is suitable for mechanical operations or grain crop-cash crop cropping mode with higher economic benefits to increase production profits. For example, the municipal and county seed stations will announce to the society every year the crop varieties for two-season cropping and guide farmers to purchase scientifically. Another example is the demonstration of silage corn production at agricultural technology extension stations in Peng’an County and Nanbu County to guide owners to recycle production. These measures have promoted the update of owners’ awareness.

4.2.2Strengthening technology promotion. First, mechanization technology must be promoted. Looking at the world, the future of agricultural production methods comes down to mechanization. While encouraging scale owners to purchase machinery and equipment and adopt the mode that requires mechanical operations to lay a solid foundation for the comprehensive development of mechanized production methods, it is also necessary to increase the introduction of agricultural machinery that is applicable to local areas and the training of skills of agricultural machinery operators, facilitating the purchase and use of the machinery. Second, it is needed to promote light and simplified technology. In the case that mechanization technology has not been fully promoted, promoting the light and simplified technologies such as direct seeding of rice and sprinkling of wheat is also a supplement to modern agricultural production technology. Currently, the comprehensive mechanization level of major crops in Nanchong City has reached 43%, and light and simplified production technologies for grain and oil have been promoted in more than 20 000 ha, which can be regarded as small achievements in strengthening the promotion of technologies.

4.3 Speeding up structural adjustment and improving production efficiency

4.3.1Extending industrial chain and expanding income sources. Among the many income-increasing measures, the method of extending the industrial chain to improve production efficiency is the most scientific and effective. It is difficult to make complete changes in the unfavorable factors that affect the economic benefits of grain and oil production, and so, only through extending the industrial chain, the operation will be improved and diversified. The following ways can be used to extend the industrial chain: increasing the selection, classification, packaging and other initial processing links to increase sales prices; extending the deep processing chains of rice processing, flour production and fat pressing to improve the added value of the finished products; and developing comprehensive utilization of straw, circular farming of pigs and sheep and other related industries to increase economic returns. For example, the grain and oil leading company in Xichong County, Hanglixiang Rice Industry, has appropriately extended the industrial chain of planting, storage, processing and sales, and remarkable results have been achieved such as transfering of 666.67 ha of land and an annual profit of 10 million yuan.

4.3.2Building product brand and improving economic benefits. Someone ever said that "the thing that is sold the most is often not the beset, but has the loudest brand", illuminating the importance of brand construction. There are many ways for Nanchong City to build brands for scale management. First, traditional brands can be tapped. Since ancient times, Nanchong has been known for its high-quality rice. Some traditional good rice brans can be re-used. For example, Langzhong Shangshui Rice and Peng’an Shikong Rice are repackaged and exported to Chongqing and Chengdu. Second, modern brands need to be innovated. It is feasible to build brands taking advantage of the Three Kingdoms culture, silk history and the reputation of Fruit City of Nanchong. For example, the Nanchong Guocheng Grain and Oil Professional Cooperative Associated Pressure have registered trademarks of Guocheng and Guozhou, and the sales prices of rice and rapeseed oil are 6.00-8.00 yuan/kg and 8.00-10.00 yuan/kg, respectively, of which the profit is more than those of bulk products. Third, public brands should be utilized properly. The "Gold Business Card" of the public brands in the agricultural production areas has a huge role in promoting product sales and increasing product profits. For example, the public brands of Nanchong Jiazuo of Nanchong City and Haochongshi of Xichong County have won many national and provincial honors, and making good use of these public brands will definitely improve economic efficiency.