As I just said, there are mainly three problems. First, the production cost keeps surging. There are long-existing causes behind this. China has a large rural population, but the agricultural business every rural family conducts is on a small scale. It’s difficult for them to reduce costs. There are also new factors, such as rises in investment and workers’ wages, and the transfer of rural land use rights, which concerns a lot of people. Although the transfer of rural land use rights can enlarge the scale of farm operation, it will increase the cost of land use.
Over the past few years, the output of farm production has increased, but farmers’ gain from the harvests – especially harvests of grain, cotton and oil – has not increased much. To earn more money, farmers have had to raise the price of agricultural products. Since 2010, in particular, there were notable rises in major agricultural products. Take grains for example. The government buys wheat and rice at the minimum price. Compared with 2010, the minimum purchase price of wheat has increased by 60 percent. It took around six or seven years for the price of rice to increase by 100 percent.
The rise in price has caused another problem. In the international market, our agricultural products, including grain, wheat, corn, cotton and sugar, are more expensive than the foreign ones. So you can discover that although the supply of agricultural products has been increased, the domestic demand has been growing at a faster speed. Meanwhile, you can discover that the imports of agricultural products, including grain, cotton, oil and sugar, are rising, because for one thing, we indeed has a huge demand, and for another thing, our price is higher than foreign products, which makes our agricultural industry less competitive than the foreign ones.
In the past, we mainly pursued high output. We have been developing at the expense of natural resources and have left a bad impact on environment. Now, the issue has gained more and more public attention. For example, an increasing number of people are talking about heavy metal pollution and agricultural non-point source pollution now. The pursuit of high output has also imposed greater constraints on our agricultural development.
Against this backdrop, we must change the previous development model in order to maintain good momentum. Instead of mainly pursuing high output and relying on resources consumption, we should put equal emphasis on quantity, quality and benefits and rely on advanced technologies and more skilled labor. That’s the general trend of development.