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Five Insights to understand the future of agriculture in China

To understand agriculture in China, you need to dive deep into rural villages and understand the lives of farmers.

TEAMS Design
Apr 12 · 6 min read

1. Dig deep into the villages of China to understand agriculture:

In China, an administrative village (Chinese: 村; pinyin: cūn) is a fifth-level type of administrative division underneath a township, county, city, and province. There are more than six hundred thousand administrative villages in China.

Generally, the rural village areas are underdeveloped in the industrial and business sectors, relying mainly on agriculture for a living, which have difficult and low-paying jobs.

According to the data published by the National Bureau of Statistics of China, the average disposable income of a village household is only one-third of an urban household income. In 2018 village households averaged: 14,617 RMB/Year (around 1,873 euros) while the urban households’ income was 39,250.8 RMB/Year.

2. Labor-intensive farming methods vs. a labor shortage:

With more and more of the young population moving away from rural areas and swarming to big cities, much farmland has been left to the elderly villagers and children to tend, who are unable to cope with heavy agricultural production, especially during peak season.

Traditional labor-intensive farming methods are plagued with the increased labor shortages, which is increasing the labor costs for farming activities even more. Hence, efficiency and cost-cutting are critical for large farm owners when considering production methods.

From the last fieldwork we conducted at the end of 2020, we often heard farm owners complaining about the difficulty of hiring additional hands and that the daily labor cost was increasing significantly. For example, in Qixia, Shandong, one-day labor costs during peak time could be up to 400 RMB.

3. Rural land circulation for agricultural modernization:

Rural land circulation means farmers transfer their land operation rights so that dispersed farmland can be centralized for intensive mass agricultural production. china.org.cn

In China, land in rural areas is collectively owned, and farmers are granted only the land's right. Depending on the village size and population, each household is granted a certain plot of land. However, under such circumstances, land allotted to a single individual for agriculture is minimal and fragmented. This hampers the modernization of agriculture which is traditionally based on large-scale farming.

Encouraging rural land circulation was put forward as one of the central government’s major tasks in the ongoing reform program since 2013. An updated administrative policy was launched this year in January to accelerate agricultural modernization and rural area development.

4. Rural infrastructure to meet internet and e-commerce popularity:

Based on the third national agricultural census results, an average of 89.9% of villages are connected to the Internet, especially in the eastern region, which reaches 97.1%, and the coverage of e-commerce distribution sites reaches 25.1% on average.

Both government and private sector companies have implemented several programs to support the development of e-commerce in less-developed areas. For example, the government’s Rural E-Commerce Demonstration Program seeks to promote e-commerce in rural areas by establishing and improving rural e-commerce public services, fostering rural e-commerce supply chains, promoting connectivity between agriculture and commerce, and enhancing e-commerce training.

Meanwhile, Alibaba’s Rural Taobao Program set out to establish an e-commerce service system in over 100,000 administrative villages across China to bring consumer goods to rural areas and agricultural products to urban areas.” E-commerce development- Experience from China

These programs improve logistical connections with underserved villages to ensure timelier pickup and delivery by expanding existing private logistical systems from county centers to villages. These e-commerce models help ensure that the urban demand for food can be met even during the pandemic and help avoid additional in-season food waste in the village.

5. In an era of transformation, China aims to develop a mechanized, electrified, and intelligent agriculture industry.

Besides policy and infrastructure changes to encourage agriculture modernization, there is also a deep collaboration between different parties aiming to combine technology, science, and farming in order to promote smart agriculture.

Agriculture in China has been described as a sector that “touches the largest number of people and yet had the least amount of digitization in the past decades,” by Chen Lei, CEO of Pinduoduo, China’s major e-commerce player with large investments in agriculture.

Chinese agronomist Yuan Longping, also known as the father of hybrid rice, participated in a live broadcast that jointly organized The Ministry of Agriculture and Rural Affairs, China Central Radio and Television Station, and Pinduoduo* (From Wikipedia: Pinduoduo Inc. (Chinese: 拼多多; Pinyin: Pīn duōduō) is the largest agriculture-focused technology platform in China, serving 731 million active buyers as of September 2020. It has created a platform that connects farmers and distributors with consumers directly through its interactive shopping experience.).

Yuan said that modern agriculture is not like agriculture in the past. It is now high-tech agriculture, a “mechanized, electrified, and intelligent agriculture.”

It is not just Pinduoduo, but other e-commerce players are also paying attention to the changing agriculture industry. Alibaba, which owns both online and offline commerce platforms, has collaborated with Sinochem Modern Agriculture Platform to create a Digital Agricultural Base for promoting a modern agricultural, industrial chain, with production and sales closely connected and traceable. Tiktok and Kwai connect farmers and urban customers, enabling farmers to sell goods directly to customers.

“China’s investment in rural infrastructure over the years has really paid off. Digitalization, mechanization, and logistics solutions in rural areas are developing more rapidly. A large number of companies have turned their sights from cities to rural areas, which is a market with more development potential.” An Luo, President at TEAMS Shanghai.

Conclusion:

As Gong Yuanshi, Vice-President of China Agricultural University, describes China’s agricultural development as “in an important era of transformation and upgrading.” It is easy to imagine how digital technology will be further applied to agricultural production in China and worldwide. To achieve this, cross-disciplinary research and development will need to be integrated along with the development process.

This article was co-written by Xun Zhang, Research Manager, and An Luo, President at TEAMS Shanghai.

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Insights is a space created by TEAMS Design to share the ideas and stories created by the TEAMS-Team around a variety of topics. From Design culture, all the way to sustainability & mobility.

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Insights by TEAMS Design

Insights is a space created by TEAMS Design to share the ideas and stories created by the TEAMS-Team around a variety of topics. From Design culture, all the way to sustainability & mobility.