46082-001: Policies on the Construction of Modern Agricultural Demonstration Areas to Achieve Agricultural Modernization

Technical Assistance Consultant’s Report

Project Number: 46082 September 2015

PRC: Study on Modern Agriculture Demonstration Area Planning and Financial Support Mobilization – Policies on the Construction of Modern Agricultural Demonstration Areas to Achieve Agricultural Modernization Financed by the Technical Assistance Special Fund

Prepared by the Institute of Agricultural Economics and Development, Chinese Academy of Agricultural Sciences

Beijing, PRC

For the Department of Development and Planning, Ministry of Agriculture

This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. (For project preparatory technical assistance: All the views expressed herein may not be incorporated into the proposed project’s design.

The Asian Development Bank TA No. 8126: Study on Modern Agricultural Demonstration Areas Plan and Financial Support Mobilization

Policies on the Construction of Modern Agricultural Demonstration Areas to Achieve

the Agricultural Modernization

The Final Report

Institute of Agricultural Economics and Development (IAED), Chinese Academy of Agricultural Sciences (CAAS) Subject Moderator:

Jiang Heping Professor IEAD in CAAS

Subject Participants:

Zhan Lin Post Doctorate IEAD in CAAS

Ai Hongjuan Doctor Graduate IEAD in CAAS

Zhu Fushou Post-Graduate IEAD in CAAS

Liu Xueyu Post-Graduate IEAD in CAAS

Peng Chengyuan Doctor Graduate IEAD in CAAS

Cui Kai Doctor Graduate IEAD in CAAS

Study period of the subject: September in 2013 — March in 2015

Finish time of the subject: March in 2015

Contents

1. Status and Problems of the Modern Agricultural Development in China

...... 1

1.1 Status of the Domestic Development of Modern Agriculture in China ...... 1

1.2 Problems of the Modern Agricultural Development in China ...... 4

2. Analysis on Modes of National Modern Agriculture Demonstration

Areas ...... 7

2.1 The grain industry chain-led mode ...... 7

2.2 The financial service-led mode...... 10

2.3 The leading enterprise-led mode...... 14

2.4 Park-district-led mode ...... 17

2.5 Industrial and commercial capital pull mode...... 20

2.6 Collective economy driving mode...... 24

3. Analysis on Agricultural Domestic Policies in Typical Modern

Agricultural Demonstration Areas...... 26

3.1 Analysis on land transfer policy...... 26

3.2 Analysis on scale management policy ...... 28

3.3 Analysis on infrastructure construction policy...... 30

3.4 Analysis on agricultural science and technology innovation and application

policy. 32

3.5 Analysis on Talents cultivation policy...... 35

4. Short Term policies to Promote Agricultural Modernization. .... 36

iii

4.1 Agricultural price support policy...... 36

4.2 Agricultural subsidy policy...... 38

4.3 Agricultural investment policy...... 40

4.4 Agricultural science and technology innovation and application policy. .... 41

4.5 Farmer income support policy ...... 43

5. Long Term Policies to Promote Agricultural Modernization ...... 45

5.1 Land transfer policy...... 45

5.2 The agricultural infrastructure construction policy ...... 46

5.3 The policy to support moderate scale of agricultural operation...... 48

5.4 Agricultural resources and ecological environment protection policy ...... 50

5.5 The agricultural insurance policy ...... 51

Policy Recommendations on the Construction of Modern Agricultural Demonstration Areas to Achieve the Agricultural Modernization in China

1. Status and Problems of the Modern Agricultural Development in

China

1.1 Status of the Domestic Development of Modern Agriculture in China

• The earliest concept of Chinese agricultural modernization can be dated from September in 1954 when the Premier Zhou Enlai delivered the government work report. In the report, he put forward the goal clearly to achieve the comprehensive

modernization of agriculture, industry, national defense, and science and technology . The agricultural modernization includes the agricultural mechanization, the chemical application on agriculture, the agricultural water conservancy and the agricultural electrification. After reform and opening-up policies implemented, the agricultural modernization breakthroughs the limitations of the previous agriculture and gradually gets the scientific, commercial, intense and simple, socialized, organized and integrated content. Overall, since the adoption of the reform and opening up policy more than 30 years ago, notable achievements have been made in the adjustment of rural industrial structure in China.

1.1.1 The output of main agricultural products increased rapidly.

Since the rural economic system reform began at the end of 1970s, Chinese agricultural economy has grown very rapidly. Measured by the index of net agricultural production made by Food and Agriculture Organization of the United Nations (FAO), China's agricultural average annual growth rate was 1.9% from 1961 to 1978. It reached 4.0% from 1978 to 2012, during which 3.2% for crop and 5.8% for animal products. During the period from 2005 to 2015, the growth rate of per personal agricultural output in China reached 3% which was 1.7% higher than that in the whole world. Protection of agricultural production is the most important issue facing China

modern agricultural development. Since the late 1970s, when the rural have begun the economic reform, agricultural growth is becoming extremely rapid. Using the FAO net agricultural production index, 1961-1978 China's agricultural output growth is the most stable, with an average annual growth rate of 1.9%, but from 1978 to 2012, the annual growth rate of 4.0%, crops yield an average annual rate of 3.2%, although lower livestock starting point, but with an average annual growth of 5.8%. Last decade, per capita agricultural output growth has declined, but still reached 3% annual growth rate, nearly double the 1.7 percent higher than the global growth rate (Figure 1).

Figure1. Agricultural production in China Date Source: OECD-FAO Agricultural Outlook 2013 , 2013. Chinese food production (cereals, grains) was from 305 million tons in 1978 to 590 million tons in 2012, with an increase of 93%; 2-fold increase in cotton production over the same period; oil crops production increased five-fold; four-fold increase in sugar crop and fruit production increased to 34 times; despite a decline of arable land, but because of increased yields and cropping index , and crop production is still made a sizeable growth; in this period, the average annual growth in wheat yields of 2.3%, corn yields in were up 1.7% , 1.2% average annual growth in rice yields, soybean yields an average annual growth of 1.2%. Multiple cropping index increased from 1.4 in the mid-1980s to 1.8 in 2012; production of livestock products and aquatic products has increased significantly , compared with 1978, meat production increased by 8 times, dairy production increased by 16 times , water product output increased 11 –fold (Figure 2).

Figure 2. Production of major agricultural products in China Date Source: OECD-FAO Agricultural Outlook 2013 , 2013.

1.1.2 The industrial structure of agricultural continues is optimized.

In 1978, the total output value in agriculture accounted for 28.2% of the nation’s GDP, which in industry accounting for 47.9% and in the third industry accounting for 23.9%. In 2013, the proportion of three main industries is 10.0%, 43.9%, 46.1%, respectively. Among the total output value in agriculture, the output of the traditional agriculture accounted for 80%, forestry accounting for 3.4%, animal husbandry accounting for 15.0% and fisheries accounting for 1.6%. In 2012, the proportion of the traditional agricultural output declined into 52.5%, forestry inclined into 3.9%, animal husbandry inclined into 30.4% and fisheries inclined into 9.7%.

1.1.3 The level of agricultural facilities and equipment is significantly improved.

Irrigation and water conservancy infrastructures have improved significantly and the area of the effective irrigation in China reached 6168 million hectares in 2011 which increased by 37% compared with that in 1978. The level of agricultural mechanization develops rapidly and the agricultural mechanization degree was improved 7 times in China from 1978 to 2012. In 2012, the number of large and medium-sized farm tractors, rice harvesters and corn combine harvesters were 4.9 million, 510 million and 510 million, respectively. The mechanization rate of sowing and harvesting wheat, rice and maize had improved by 55%.

1.1.4 The agricultural technology improved rapidly.

With the breakthrough in the core technology, such as hybrid rice, hybrid corn, hybrid rapeseed and transgenic insect-resistant cotton, some of China's major agricultural technologies have been formed competitive advantages on a global scale. The coverage rate of improved variety was in excess of 95% in 2010. The contribution rate of agricultural science and technology advancement reached 54.5% in 2012, which was two times than that in the early period of the agricultural reform. A relatively complete system combining scientific research, teaching and promotion is formed preliminarily.

1.1.5 Farmers’ income increases constantly.

In terms of the annual income of per farmer, it is 134 Yuan in 1978 and it is up to 7907 Yuan in 2013. Among famers’ income, the share of farmer’ family income from agricultural management falls from 90% in 1978 to 43% in 2013.

1.2 Problems of the Modern Agricultural Development in China

In recent years, the grain output in China achieves the continuous 11 years’ increase and steps 6 million tons in the consecutive 2 years. Farmers' income achieves rapidly increase in the continuous 11 years and the growth of farmers’ income is faster than the growth of GDP and urban residents' income in the consecutive 5 years. But in the process of the modern agriculture development, there are still challenges, including management by small farms accounting for the main, the weak infrastructure, the irrational agricultural industrial structure, the low level of application of science and technology, and so on.

1.2.1 Management by small farms accounting for the main form in agricultural of China.

In most parts of China, the agricultural production is still mainly by a labor-intensive and small scale management and the mechanization level is low. The energy consuming per unit is high and the production efficiency is low. According to data that 1.8 billion mu of arable land and 252 million rural labors, there are only 7 mu of arable land per labor in China. The productivity of agriculture is only 9% of that of industry, and the commodity rate of agricultural products is only 60%.

1.2.2 The agricultural infrastructure is weak.

The situation that farmers live at the mercy of weather has not fundamentally changed and the ability to anti-disaster is weak. There are a lot of water conservancy facilities not only getting new development for years but becoming old and useless. The infrastructure construction is lagged and material and technical equipment level is low for the agricultural production, which makes farmers extremely easy to be influenced by natural disasters, so that farmers' income is large fluctuant.

1.2.3 The internal structure of rural industries is irrational.

Rural industrial structure is the key to achieving the integration of urban and rural. Since the reform and opening up, China's agricultural output value accounted for in the proportion of national economic output has been declining. However, after 2000, from the internal non-agricultural industries in rural areas, the proportion of tertiary industry in rural areas has little change, basic stay in a 1: 2: 1.2 level fluctuations (Figure 3), and means associated employment structure did not change greatly. The structure of three industries between the proportions is still need for further adjustments.

Figure 3. Production of major agricultural products in China Date Source: China Rural Economic Situation Analysis and Forecast (2013 - 2014 ) , the CASS Institute of Rural Development.

1.2.4 The agricultural productivity remains low.

With the advance of industrialization and urbanization, on the one hand, the amount of chemical fertilizers and pesticides continues to increase, on the other hand,

prices of land and labor increase, which makes a direct result to increase agricultural production costs. The rising price makes the domestic agricultural products are suppressed by the cheap agricultural products imported from other countries. Under its influence, the trend of the grain as provision, agriculture as paragon and farmers as workers becomes much more obvious. The security of food and agriculture faces severe tests.

1.2.5 The level of the application in agricultural science and technology is low.

Presently, the funds of the agricultural science and technology are short and the agricultural science and technology investments from government only account for 0.5% of the agricultural GDP, which is less than 1% for a long period of time. The major breakthrough in agriculture is few. The quality of grass-root personnel in agricultural technology extension departments is poor. The working conditions are poor and the pay is low. There is fewer funds for agricultural technology extension. The utilization rates of fertilizer, water and pesticides are only between 30% and 35% which is only the half of that at the international advanced level. 1.2.6 The problems of resources and environment are serious. Presently, development of agriculture in China faces the limited arable land, the great pressure from population, the low quality of arable land and the serious soil degradation. About 50 million mu of arable land is not suitable for farming due to the middle or severe pollution. A certain amount of arable land is not farmed due to the destruction of surface soil caused by mining subsidence and over exploitation of groundwater. In addition, agricultural pollution, such as fertilizer pollution, pesticide pollution, plastic film pollution, livestock and poultry manure pollution and straw burning pollution, has become an important source of water, soil, air pollution in China and pose a serious threat on the health development of ecological environment. 1.2.7 The quality of people engaged in agriculture is low. There is a great shortage of human resources engaged in agricultural production. The labors who are illiterate or semi-illiterate in rural areas accounted for 5.73%, the ones with primary school education accounting for 34.44%, the ones with junior middle school education accounting for 52.44%, the ones with high school education accounting for 12.05%, the ones with technical secondary school and above accounting for 5.34%. The number of labors with college and college education in each hundred of the workers is only 2.4. Especially, with the large number of rural youth labor flowing to urban and non-agricultural industries, a dramatic change happens in the structure of the farmer team. People left in rural areas are mostly the 6

elderly, women and children. The quality of agricultural workers shows a structural decline trend. In recent years, national modern agriculture demonstration area construction obtained the remarkable results and gained the rich experience,which has eagerly anticipated the Chinese characteristic agriculture modernization. Through the inspection to Heilongjiang Fujin and Guangxi Tiandong County and Hubei Jianli County and Ningxia Helan County and Zhejiang Wuching and Jiangsu Jiangyan six areas' state-level modern agriculture demonstration areas, in recent years, national modern agriculture demonstration area construction obtained the remarkable results, gained in the rich experience, has eagerly anticipated the Chinese characteristic agriculture modernization, also do in-depth analysis of the existing problems, propose measures to solve the problem of how to take advantage of scale and financial support to accelerate the construction and development of the demonstration area views and suggestions , put forward on the basis of the development of modern agriculture to promote short-term and long-term policy recommendations. 2. Analysis on Modes of National Modern Agriculture Demonstration

Areas

According to the relating to the deployment of the Development Planning of Chinese Modern Agriculture (2011-2015) , Opinions on Creating National Modern Agricultural Demonstration Areas from Ministry of Agriculture of the People’s Republic of China and Management and Measures on Accreditation of National Modern Agriculture Demonstration Areas , in January 2015, based on the competitive selection of the agricultural departments and the provincial of the people's governments in province, 157 towns (districts, cities, and reclamation areas) were identified as the third batch of NMADAs by the executive meeting of Ministry of Agriculture of the People’s Republic of China. Merged with the first two batches of NMADAs, there are 283 NMADAs in total.

2.1 The grain industry chain-led mode

2.1.1 The conception

The grain industry chain -led mode refers to around improving grain production capacity, by the government’s lead, actively formulate and implement the policies of strengthening agriculture and benefiting farmers, promoting and applying new agricultural technology, actively promoting agricultural mechanization; making farmers' professional cooperative organizations as the main carrier, to promote the land scale management, putting agricultural leading enterprises as the core, stretching the industry chain dominated by food; fostering large grain and large agricultural machinery as the key point, to improve farmers’ management ability and overall

quality. On the basis of realizing and keeping high grain output, major grain producing areas make the development of grain drive the development of animal husbandry and agricultural product processing industry and commerce, promote agricultural efficiency and farmers income and rural win-win progress.

Take grain to Leading by Large famer as feeding herds government the key

Take grain to thriving industry Grain Production Take grain to activate commerce

Leading enterprise Professional Take grain to as the core cooperative as the carrier strengthen cities

Optimize the planting structure to ensure sustained and stable grain yield

Strengthen extension of science and technology to improve grains’ technology content

Optimize agricultural equipment to tamp the basis production of grains

FIGURE 1 The grain production -led mode in Fujin County or City? of Heilongjiang Province

2.1.2 Characteristics

Improve the planting structure and ensure the grain output increasing constantly. The stratege that the grain production is treated as the main industry in demonstration area makes the direction adjusted in planting structure, increasing the planting area of rice, expanding the planting area of corn, steadying the planting area of soybean, optimizing the planting area of economic planting. In 2003, the whole planting area in Fujin City is 380 thousand ha, 240 thousand ha for grain, 16.4 thousand ha for 8

economic plant, and the gross output of grain is more than 3 million tons. The radioactive and leading functions of agriculture products processing enterprise have been strengthened obviously. So far, there are 17 agriculture industrialization leading enterprises in Fujin City. These leading enterprises achieved ¥720 million revenue, which made industrialization’s scale, level and benefit increasing a lot, and improved the level of agriculture products’ storage, process and logistics. Strengthen the extension of science and technology and increase the science and technology impact in the grain output . As one of the first batch of experimental counties to improve the grain output, especially rice, Fujin City constructed 30 demonstrate areas aiming to achieve thousands of hectares high-output centralized and 26 science and technology demonstrate area in many levels which became modern agriculture demonstrated bases having features of high standard, more science and technology content and powerful radioactive and leading function. By conducting projects (i.e. standard grain field construction, high-output plant cultivating, etc.) approved by the Ministry of Agriculture of China in 2013, the city had undertaken more than 50 testing, demonstrating and extension projects approved by provinces, cities and other governments, and thousands of applications in science and technology.

2.1.3 Achievements

Science and technology level is improved constantly. Fujin City had an excellent network for agricultural technology extension at the following three levels: city, town, and village. This measure speeded up the application of new achievement and technology. As a result, the contribution rate of agriculture science and technology is up to 54% and the coverage rate of standardization is up to 86%, the popularizing rate keeping at 100%. The sums of small regions and large sheds are up to 112 and 32 thousand ， respectively. All kinds of accelerating smart rice bud workshops is up to 12, which can produce buds 2 thousand tons and cultivate 1 million rice . Mechanization degree is enhanced constantly. Fujin City has 11 modern agri-machine cooperatives whose registered capital is more than tens of millions. They purchased more than 110 tractors, 300 farm tools, 103 combine harvesters for corn, rice and so on. These actions improved the level of agricultural machinery equipment greatly in the whole city and made the mechanization degree up to 91%. The vigor of rural economy development increased . The area of transfer land was up to 74 thousand ha and the scale management area was up to 26.7 thousand ha, respectively, accounting for 19.3% and 70%. Many kinds of professional cultivated cooperatives and family farms played the guide and leading role during harvest, which improved the organization level of agriculture production. The agriculture insurance area is up to 89 thousand ha and the insurance mount is up to more than ¥4 million, which improved the anti-risk abilities of cultivation greatly.

2.1.4 The scope of application

Represented by Heilongjiang Fujin, this mode is suitable for the MADA, which is also led by food production. Since the model has certain requirements on the scale of planting, farmland infrastructure and the level of agricultural mechanization, so it is particularly suitable for the major grain producing areas in the implementation of China, such as the middle and lower reaches of Yangtze River, southwest, northwest area etc. Specifically, the model conditions including the following three aspects: Ⅰ The demonstration zones have formed grain planting, large-scale area accounted for more than the demonstration area to the total arable land area of 85%, the main varieties of grain scale planting level is above 90%. Demonstration area in different varieties of grain rational layout, focus, to the advantage of producing areas such as: rice, wheat production region advantage in production area corn production area, advantage etc.; Ⅱ The demonstration zone of agriculture has basic facilities as follows, standard of agricultural land rate reached more than 60%, the effective irrigation rate above 80%, which guaranteed the yield is more than 75%, the comprehensive mechanization rate reached 80% or more; grain breeding new varieties, fertilization research ability; agricultural meteorological service, natural disaster prevention and control and service guarantees; Ⅲ The grain industry demonstration zone has established the basic system, and the grain processing GDP accounted for more than 60% of gross of local food processing; agricultural products quality safety supervision system is perfect, 40% production from the arable land get the certifications of the pollution-free agricultural products, the green food, the organic agricultural products or the agricultural product geographical indications; the configuration agricultural marketing , the information consultation, the intermediary services and other ancillary industry systems are completed too.

2.2 The financial service-led mode.

2.2.1 The conception

The financial service-led mode refers to making financial support as the carrier, establishing and perfecting the financial organization system, payment system, credit system, insurance system, guarantee system, basic financial service system, that is so called "six systems", gradually breaking rural financial services problems , such as the difficulties of farmers loans, rural bank lending and rural payment and settlement. Increase financial input to support and build the characteristic agriculture industry, and actively foster the effective financial demand entity to lead the local farmers out of poverty, to promote the rapid growth of modern agricultural economy and increase

of farmers' income steadily.

forest rights, land contract and bank institution management rights, profit insurance institution loan+credit+property right rights of production securities institution insurance+guarantee+payment facilities and farm houses Institution Service Productio

three innovations

three linkages three combinations

structuring institutions poverty alleviation extension and duplication urban-rural integration risk control modern agriculture

FIGURE 2 The financial service -led mode in Tiandong of Guangxi Zhuang Autonomous Region

2.2.2 Characters

Innovating finance institution and its service and product. Firstly, about finance institution innovation, Tiandong City established the first platform --rural property rights exchange center. in 2012 and organized 2 credit companies in 2013. So far, the county has possessed 9 banking houses, 18 non-banking financial institutes, and 45 bank’s networks. The bank and insurance networks have covered 10 towns, which makes Tiandong County the most complete coverage of financial institute, forming the transverse linkage of bank, insurance and stock institutes, servicing urban and rural. Then, about product innovation, Tiandong County first published Oppions on Carrying out the Pilot Program of Rural Property Mortgage Loan , to direct the 11

banking institutes to provide the mortgage loan rural property owners . The whole county developed mortgage loan by forestry right, land contract right, production equipment, etc. These actions broke the limit of the difference in loaning of banks and farmers. At the same time, the government encouraged financial institutes to develop new financial product. Up to date, the products involving agriculture credit and insurance amounted to 37 and covered each aspect of production in rural and agriculture. Lastly, about servicing innovation, the county built the rural financial service system of insurance, warranty and payment in every level and section based on public finance input of small amount and formed a long-term mechanism of financial service. Therefore, the basic frame, called Tiandong Mode , which is duplicable, ease extension and sustainable. Build the linkage of financial reform-innovation, system construction, extension-duplication and prevention-control of risk. Firstly, about the linkage between reform-innovation and institution structure, Tiandong County governments set up the joint meeting system. Then they drafted and published many institution files, by which formed the working mechanism of promoting by government, participating by financial institute, farmers as main part and cooperation with social members. Secondly, build the linkage of financial reform-innovation and extension-duplication, Tiandong county governments’ works, including mutual help community for farmers’ fund, mutual help team for poverty farmers, characteristic insurance product, etc., was welcomed by numerous farmers greatly. Thirdly, about the linkage between reform-innovation and prevention-control of risk, by the innovations of award mechanism of loan involving agriculture, system of agriculture warranty, risk compensating mechanism, Tiandong governments strengthen the control of investment and financing companies, warranty institution, small loan companies, to reduce risk of financial institutions for agriculture, farmer and rural area. Promote the combination between rural financial reform-innovation and reducing poverty, and urban and rural integration . Firstly, about the combination between rural financial reform-innovation and reducing poverty, Tiandong governments structured the mode of reducing poverty by finance, that is ‘characteristic industry + cooperatives + credit level + credit and loan + insurance + warranty’, on the basic of the county’s development condition. The financial institution had loaned ¥230 million to leading enterprises who helped reducing poverty and poor villages in 2013. Secondly, about the combination between rural financial reform-innovation and modern agricultural development, Tiandong County established the first rural property rights exchange center in Guangxi Zhuang Autonomous Region in December, 2013. By introducing property rights exchange in Guangxi Beibu Gulf into Tiandong County, the center expanded the area of property rights exchange, solving the financial problem of realizing land scale management and the development of rural and agriculture. Thirdly, about the combination between rural financial reform-innovation and urban and rural integration, the government exerted the role of government finance to encourage financial support from banking and financial institution to the project of new types of urbanization, financing by rural property right as collateral for the new rural construction, new types of farmers’

community, etc.

2.2.3 Achievements

Speed up the land transfer . The government published temporal methods to reward for rural contracted land transfer in Tiandong County and some measures to reward scale and stereo cultivation, which promoted rural land transfer orderly on the basic of rural property exchange center of Tiandong County. In 2013, there is more than 1 hundred ha increased transferred land, which promoted rural land centered into scale management entity. The land of moderate scale management had amount to 33.5% of the whole county land in 2013 and increased by 3.9% compared with that in 2012. Make the rural financial reform ahead of other place in the whole nation. Tiandong County put forward the goal to equalize the urban and rural financial service ahead in the nation in 2012, to build the financial service platform for agriculture, farmers and rural area in the village level and form the rural financial service mode, that is ‘financial service office+ credit level + credit and loan + insurance + payment tools’. The mode is aiming to stretch the financial service to the villages and realize financial benefit distributing among all the county areas. Up to the end of October of 2013, the sum of deposit money in the whole county had been up to ¥7.235 billion and the loan involving agriculture had been up to ¥5.348 billion which increased by 22.63% than last year’s. Form new type of agriculture management system preliminarily. The 16 leading enterprises in the county got ¥2.83 billion sale revenue in 2013, increased 15.5% than last year’s. Among these leading enterprises, there are 4 enterprises whose sale revenue is beyond ¥100 million. In addition to drive the development of the mode of ‘leading enterprises + cooperatives + bases + famers’, these leading enterprises led 450 million farmers to employment and increased ¥210 million farmers’ income which increased 16.6% than last year’s. In 2013, added 30 farmers cooperatives, there are 195 famers’ professional cooperatives in the whole county now, among which there is 1 demonstrated cooperative on the national level and 11 demonstrated cooperatives on the provincial level. These cooperatives involved 326 million farmers and increased the cooperative members’ income about ¥600 than non-cooperative members’.

2.2.4 The scope of application

Financial services-led mode represented by Tiandong County, with the financial means cracks the bottlenecks including small-scale agricultural operations, investment scattered, financing difficulties, and other big risk. This basic model is suitable for the vast majority of MADAs, which can be put into growth incentives through the establishment of agricultural credit, improve agricultural financing service system, innovative agricultural financial services and products, improving agricultural financial services, so that the basic conditions for the demonstration areas becoming

suitable for the model as follows: ⅠAgricultural credit investment growth incentives are established. Enacting incentive policies included tax measures, cost subsidies, incremental rewards encourage financial institutions to increase agriculture-related loans, at the same time, to study how to set up agricultural risk compensation fund to compensate or subsidies for agriculture secured loan losses or guarantee fees. ⅡAccelerating the establishment of agricultural financing service system. This system is based on policy banks, commercial banks and rural small, medium financial institutions, is focused on agricultural investment and financing guarantee institutions , is supplemented by the farmers capital mutual cooperatives ,and is protected by the agricultural credit system. ⅢAgricultural financial services products are innovative. “three rights” (farmers' land contract management rights, land use rights and the right to collective income distribution) mortgages, pledge loans including farm machinery, orders, receipts, insurance policies, accounts receivable, etc. have been developed and the terms of loan are designed according to the agricultural production cycled to meet the financing needs of the production of MADA. ⅣAgricultural financial service modes are improved. Financial institutions are improving BPR on agricultural loans, lowering the loan threshold for the new main management bodies, simplifying the loan procedures, optimizing the structure of the loan period, providing efficient and convenient financing services.

2.3 The leading enterprise-led mode.

2.3.1 The conception

The leading enterprise-led mode refers to making leading enterprises as the principal part of modern agriculture development and management, in line with the principle of ‘voluntary, paid, standardized and orderly’, with the industrialization of organization form of ‘companies + bases + farmers’, by leasing land use rights from farmers, to bring thousands of peasants’ scattered land into enterprises’ management and development activities, popularizing agricultural scientific and technological achievements and industrialization exploitation in the base, to promote agricultural comprehensive exploitation and modern agricultural construction.

Upgrade the leading enterprise

Farmer Increase agricultural output value

Brand Leading enterprises Increase the number of agricultural cooperatives

Base Agri-food process industries develops quickly Cooperative

Create the ‘gold-lettered signboard’

FIGURE 3 The leading enterprise-led mode in Jianli of Hubei Province

2.3.2 Characters

Build the first workshop by the base. The Jianli County takes advantages of the resource and expands the support from government finance. Guide the new management entities to participate in the land transfer and build high quality rice base to promote the standard production. Make enterprises as the leader to strengthen the power to achieve the development. Stick to making leading enterprises develop well as the primary work and making the leading enterprises as the core to link the market upward and farmers and cooperatives downward, to extend the industry chain and improve the whole efficiency and benefit. Connect farmers and market well by cooperatives . The governments in Jianli County develop professional organizations actively and encourage and guide farmers to establish professional cooperatives. Taken the run mode of ‘companies + cooperatives + bases + famers’, farmers are connected with the market by “market leading the leading enterprise, leading enterprise leading base and base leading farmers”. They make brand as the core to establish a good honor and perfect the system of agri-food quality standard and product quality examination. Apply agriculture science and technology extensively. Firstly, increase the high output rice’s plant area in the whole county. The governments of Jianli County build 33 high output rice plant areas on the provincial level. These areas are up to 22.5 ha where rice output and farmers’ income increased greatly. Secondly, the mechanization rate of rice production is up to 68%, among which the mechanization 15

rates of cultivation, seeding and harvest are up to 100%. Thirdly, strengthen the agricultural production and the whole service, by the comprehensive utilization of information disseminated by media about the agricultural technology production, supply, sales, etc.

2.3.3 Achievements

Agricultural production increased steadily. In 2012, the county grain sown area is 179 ha, total output 1.36 million tons, with an increase of 1.6% compared with that in 2011. The process industry of agricultural product develops fast and the output of agriculture product process industry is up to ¥18.1 billion in 2012, with an increase of 38.17% compared with that in 2011. Upgrade scale of leading enterprises . There are 63 leading enterprises of agriculture industrialization in the county now, among which grain processing enterprises accounted for 50% and there is 1 national level enterprise, 14 provincial level enterprises and 20 city level enterprises. These enterprises form the system of six advantage industries basically, that is deep processing of grain, forestry product processing, textile and clothing, fish processing, oil crop processing, livestock raising and processing. Quicken the pace of farmers’ professional cooperatives’ organization. There are 420 farmers’ professional cooperatives in the county now, increased 252 from the year of 2011. Grain production cooperatives accounted for about 50%. Among these cooperatives, 1 achieved the national demonstrate cooperative level, 10 achieved the ministry demonstrate cooperatives level, 5 achieved the ministry demonstrate provincial level, 6 achieved the ministry demonstrate city level, 18 achieved the ministry demonstrate county level and other excellent cooperatives.

2.3.4 The scope of application

The leading enterprises-led model are representative by Jianli County, Hubei, which promote the modernization of MADA by develop the processing of agricultural products, with the ideas and information of industrialization, also create the new model of " the four modernizations synchronization". The typical cases of development of MADA driven by a large enterprise or a enterprises association Also include Xinxing County relying on Wen's group and Inner Mongolia Horqin relying on Horqin cattle industry, etc. Specifically, the MADAs promoted of this model generally have the following characteristics:

ⅠStrong regional production driven role. A large enterprise or a enterprises association purchases more than 50% production from the MADA it belongs to by orders or some other ways, or plants more than half of the arable land in the MADA;

ⅡStrong regional employment driven role. A large enterprise or an enterprises association provides more than 40% of the MADA’s total workforce jobs;

ⅢStrong regional develpment driven role. A large enterprise or an enterprises association in this model has a rapid growth, which in total contributes to the demonstration area of the overall economic growth rate of more than 30%.

ⅣStrong regional urban-rural integration driven role. The MADA in this mode, its government and enterprises as a common body invest to the towns, parks and new rural construction simultaneously.

2.4 Park-district-led mode

2.4.1 The conception

Park-district-led mode is based on the area’s cultivated land resource constraint and better advantage in the development foundation of agricultural economy, starting from the function orientation of agriculture, making park-district as the grasp, using developing grain production and high efficiency, high-quality goods and export-oriented agriculture as the two main lines, to create high-quality goods of agriculture as the main target, through government’s guidance, enterprise operation, promoting the standardized production and intensive management, innovating on agricultural management system, fully assembling funds, talents, information and other advanced production factors’ advantages, breakthrough of cultivated land resource constraint, forming agricultural radiation sources of informatization, optimization and branding , guiding modern agricultural development.

Park National modern agriculture as the High-quality grain industry demonstration area starting belt along the Yellow point River Golden Coast Provincial modern agricultur e demonstration area Agricultural function High-quality grain industry Yinchuan City’s modern position belt along the Yellow agricultur al demonstration area River Golden Coast

Agricultural science Modern Agricultural and technology agricultural industry transfer development systems

FIGURE 4 Park-district-led mode in Helan of Ningxia Hui Autonomous Region

2.4.2 Characteristics

Optimize the distribution of characteristic industry. According to the geographical and industry development features in Helan County, the local governments optimize the distribution of characteristic industry further. On the basic of formed industry belt in six advantageous aspects: high quality grain Huang River, vegetable industry belt along Hanyan Canal and Tanglai Canal, fish industry belt along Aiyi River, grass and livestock industry belt along the east foot of Helan Mountain, entertainment agricultural industry along Zhengyuan North Street, the governments made the industry distribution on crops, flowers, seedlings and trees explicit again in 2013, to push the characteristic industry forward to scale management and standardized produce. Perfect the system of agricultural industry. Firstly, push the gather of districts and parks. Up to the end of 2013, Helan County established 3 national modern agricultural demonstration areas, 7 provincial modern agriculturale demonstration areas, 6 Yinchuan City’s modern agricultural demonstration areas. These demonstration areas’ scale is up to 8 thousand ha and their output accounts for 40% of 18

the whole county’ output in 2013. Secondly, push diversification of development and develop urban agritourism. Helan County established 6 high standard agritourism demonstrations, 1 national agritourism demonstration and 1 provincial agritourism demonstration. Thirdly, support seed industry. The county developed seed industry for 5.35 thousand ha of high quality grains and vegetable through the county’s enterprises. Promote the agricultural scientific and technological achievements transformation . Helan County takes the lead in the introduction of technology of rice under film drip irrigation and paddy bowl seedling planting, and establishes 3 demonstration areas whose drip irrigation technology of rice under film, 4 demonstration areas whose total area is 133 ha using bowl seedling planting technology. The county is the first to breed white shrimp from South America in the area of 86 ha. The local governments held organic agricultural training course with South Korea to exchange the learning about organic rice production. The governments establish 15 professional demonstration areas to guard against pests in grains and vegetables, 20 demonstration areas using the technology which has been extended to 28 thousand areas to trial soil testing to determine appropriate fertilizer formulas. They also got 2 Chinese practical new patents using cellphone to remotely control relevant agricultural production.

2.4.3 Achievements

The level of modern agriculture development was improved remarkably. In 2013, Helan County achieved gross agriculture production ¥2.7 billion and the area of grain seeding in the whole county is 33.5 thousand ha. The county constructed 3.1 thousand ha of the transfer base of organ rice along Huang River. There are 8 thousand ha of facilities agriculture areas whose output has been up to 1.05 million tons. The scale and quantity of new types of management entities increased . In 2013, the county had developed 16 family farms and 20 farmers’ professional cooperatives. There are up to 130 farmers’ professional cooperatives, among which every level farmers’ demonstrated cooperatives’ number, member and participated rate of famers are respectively up to 49, 16.1 thousand and 42.2%. There are 8 newly developed provincial leading enterprises, 4 city level’s leading enterprises and 7 scale-improved excellent leading enterprises whose sale revenue have exceeded ¥100 million. The system of rural social service is perfected constantly. According to the requirement of ‘one modern agriculture demonstration area, one cooperated organization, one chief professor and one team of technology service’, 25 projects are jointed with relevant technology and relevant technological stuffs were fixed to 47 modern agriculture demonstration areas. Therefore, the technology extension mode of ‘agriculture technology stuff leads management entity’ was creatively launched. There are 116 technological stuffs participating in the technology contract and the rate is 81.7%. Through a year’s effort, the rate of industries using fine breed is 95.5%. 19

2.4.4 The scope of application

The park-distirct-led mode is represented by Helan county in Ningxia Province, which is suitable for the MADAs that want to build quality agriculture.

ⅠAccording to different parks, different areas of natural endowments and economic base, it optimize the industrial layout agriculture in the demonstration area, to build variety agricultural parks.

ⅡIn order to promote the quality of agricultural park, the MADA will pay more attention to ecological construction and protection of agricultural environment, optimize the allocation of production factors, establish green, recycling, precision, low-carbon development concept, product green and organic production.

Ⅲ The park is mainly based on dimensional, ecological, recycling agriculture, that means this model need higher agricultural technologies, and set up an expert services group to provide farmers with technical training and services.

2.5 Industrial and commercial capital pull mode.

2.5.1 The conception

In order to promote industry gathering and explore a new mechanism of agriculture production and management, Zhejiang Province guided nonfarm household to a great extent and combined occupations households whose main incomes are not from agriculture to leave their farm land, on the base of keeping their rights to contract land manage. Various measures are taken to guarantee ordinary income from managing land to realize the situation of ‘keeping rights, leaving land and obtaining profits’. By encouraging to establish land cooperation, propelling land contract rights to transfer, guiding the whole village or the entire group to transfer their land contract rights to large planting famers, farmers' professional co-operatives and agricultural enterprises, form a ‘small contract, big business’ mode of operation. Thus promote the agriculture demonstration area’s leading industry to become regionalization and centralization. The construction should adhere to the principle of ’who invests, who manages, who benefits’, making large professional famers, farmers' professional cooperatives, agricultural leading enterprises as the main construction entities, actively guiding the industrial and commercial enterprises to participate in the park-district’s construction and management.

Household land contract and Confirm Villager rent production management rights income

Join in Land joint-stock Collective bonus land stock cooperative production Admit cooperatives members income

buy shares bonus Stock and Assets cooperatives interest income Management Certificater shareholder entities

Wages Employment Agricultural income workers

the change in status changes of of the villagers income properties

FIGURE 5 Industrial and commercial capital pull mode

2.5.2 Characteristics

Optimize to push capital integration . The relevant governments in Zhejiang Province make improving the equipment level of modern agriculture facilities as the key measure and one of important symbols, to exert the platform function to develop demonstration areas and integrate kinds of capital and projects. They organize and conduct the construction of high standard farm land to resist natural calamities to perfect infrastructure in farm land and develop facility agriculture energetically. These measures also aim to speed up the process of agricultural mechanization and lay foundations to improve the level of demonstration areas’ development. Demonstrate to push platforms’ construction prominently. That is the functional area of grain produce and the area of modern agriculture, is the main way and platform of Zhejiang Province to develop modern agriculture. All demonstration areas put the national modern agriculture demonstration areas as the important goal and the construction of ‘two areas’ as the important content to push demonstration areas’ development. Thus, the good distribution that combines point and plane to 21

mutual promotion is formed, which functions an important demonstrate role to the construction of ‘two areas’ in the province and modern agricultural development. Grasp the reform to protruding mechanism innovation. The relevant governments actively innovate in the area, including new types of management entities, socialized services, land transfer, science and technology services, to balance the development of family farms and farmers’ professional cooperatives and enlarge the scale of land moderate transfer and social services, aiming to perfect the construction of trinity public service system, that is agricultural technology extension in basic level, quality safety of agri-food, prevention of illness in plants and animals. Demonstration areas exert their advantages actively to promote reform and innovation further. By cooperation and brand marketing, they build the production and management mode of ‘farmers’ professional cooperatives + bases + farmers’ and branding industry development mode.

2.5.3 Achievements

Promote the development of grain production steadily . To ensure food security, development of grain production is the first job for all demonstration areas, to push construction of grain produce function area and promote the application of new technology and mode. These measures perfected the condition of grain production, stabilized grain planting areas, improved the output and effectiveness, and provided demonstration and guarantee of grain production and stable development in Zhejiang Province. In 2012, the highest output of rice was 15.2 tons per ha and the average output of rice was 6 tons per ha, which made the Zhejiang Province rank as No. 1 for two consecutive years in China. Promote gather and improvement of the leading industry . All demonstration areas put high efficiency and ecological agriculture as the goal to promote regional distribution and gathered and ecological development of leading industries and an example for others in the province. Up to now, the 252 kinds of parks in 8 demonstration areas have been established, among which there are 12 modern agriculture comprehensive areas. The quantity and quality are ahead of other areas in the province. By the lead of demonstration areas, the degree of concentration in agricultural industry in the province improved further and the ten leading industry of agriculture occupied 80% of gross agriculture output, which kept sustained, healthy and stable growth. Promote quick growth of new management entities . Because of the quick development of new agriculture management entity, the leading ability and radioactive effect of agriculture industrialization organization improved further. Up to date, in Zhejiang Province, there are 7174 registered family farms, 33914 farmers’ professional cooperatives, 439 agricultural leading enterprises above the provincial level. Among the three kinds of management entities, 8 demonstration areas have 1572, 4575 and 75 and the rates are 21.9%, 13.5%, 17.1% respectively. The management modes, such as ‘leading enterprises + cooperatives + bases +farmers’ and other forms, are perfected further. Agricultural leading enterprises in city’s level 22

in Zhejiang Province got sale revenue ¥81.86 billion and were involved 788.9 thousand ha in 2012, increased by 6.9% and 4.1% than that of last year. Promote quick increase of farmers’ income . In 2012, 8 national modern agriculture demonstration areas achieved agricultural production ¥6.317 billion. The production of crop farming, forestry, animal husbandry and fishery was up to ¥108.6 billion and increased ¥67.9 billion, and the increasing rate was 2% and 2.4%, respectively. Famer’s income in the 8 demonstration areas was up to ¥1798.8 billion, ¥3.436 thousand more than net income per farmer in the province and 2.3 times of net income per farmer in the nation.

2.5.4 The scope of application

The financial service-led mode represented by Huzhou City, which is more suitable for the MADAs with higher social and economic development level, such as the southeast and southern China or the main resource industrial zone, for example Yuncheng in Shanxi and Yan’an in Shaanxi. Basically, the premise of business capital into the modern agriculture are as follows:

ⅠEquipment are excellent. The parks’ infrastructures are completed, and the effective irrigation farmland rate has reached 100%, the drought and flood insurance rate is more than 90%, and the mechanization of rate is more than 80%.

ⅡTechnology modes are advanced. The parks in the MADAs have reasonable farming system, advanced planting and raising mode, soil basic accessibility factors and excellent ecological environment. At the same time, the agricultural waste in the parks are all reused well, and the dominant species, the main push technology popularization rates are very high, thoroughbred enclothe rate amounts to 100%, and the rate of contribution of agricultural science and technology reaches more than 70%.

Ⅲ Products are quality and safe. Throughout the parks, the production are based on standards, testing, and quality and safety of agricultural pesticide residues means are continuous improving, and the systems of agricultural origin and quality of prospective traceability are fully implement, the certified rate by agricultural pollution-free agricultural products reaches 100%, and each park has at least one famous agricultural brand.

Ⅳ Management mechanism has been innovation. Agricultural enterprises, farmers' cooperatives, professional breeding large, family farms dominate the business of the parks, forming a flexible and efficient management mechanism and the rural land contract management rights transfer rate is more than 40% (the mountain more than 20%).

ⅤManagement services are in place. Responsibilities of construction and management in the park are implemented perfectly. Irrigation facilities within the park property are clear. Parks where the township has a sound agricultural public service system developed well.

2.6 Collective economy driving mode.

2.6.1 The conception

In most areas in Jiangsu Province represented by Jiangyan, where farmers are guided to transfer land contract and management rights to the village organization, then through public bidding way above the scale of development of farms, governments promote agricultural modest operating, develop farms above certain scale and promote moderate management. Thus, the mode of moderate management of farm comes into being. Governments establish the system of social service, by encouraging and supporting establishment of relevant service in the unit of village. Then transfer land to persons or enterprises to conduct production by the way of public bid and appoint governments or institute in the village level for management centralized, not involving the so called ‘secondary circulation’ of the right of land management.

2.6.2 Characteristics

Accelerate construction of platform to change the carrier advantage into resource gathered advantage. Relevant governments in Jiangsu Province put the modern agriculture demonstrate areas as platform, integrate resources, attract capital and business, to make agriculture areas as the engine to push the construction of agricultural modernization. Firstly, integrate the input of public finance to incline financing to national modern agriculture and provincial modern agriculture industry areas. Secondly, integrate it to carry out support policies. Governments implement relevant support policies in demonstration areas, forming a good policy atmosphere and promoting the development of demonstration areas. Thirdly, strengthen it to attract capital and business, by taking advantages of the good environment of investment and foundation facilities, developing construction of relevant invest entities, perfecting construction environment and accelerate the process of construction in demonstration areas. Strengthen the drive from demonstration to change demonstration point to popularity of plane . Firstly, strengthen construction of industry bases above certain scale in demonstration areas centered on advantage of leading and characteristic industries. Secondly, strengthen extension and popularity of modern science and technology results. Relying on departments of research and teaching, demonstration areas are helpful to strengthen construction of service systems and service platform to promote transfer and applicant of science and technology result in their areas. Thirdly, strengthen construction multi-park in one area, by taking confirmed provincial modern agriculture industry areas as the core area of national modern agricultural demonstration area and constructing some characteristic area according to industry features and area distribution.

Strengthen mechanism innovation to change relation of production to real productive forces . Firstly, cultivate new competitive entity of modern agriculture, by increasing support and cultivation of new market competitive entity, including large planting household, farmers’ professional cooperative, leading agricultural enterprise, etc. Secondly, explore new forms of land centralized management actively, by providing subsidy to someone who transferred certain amount of land one time. Thirdly, develop many kinds of agricultural moderate scale management according to each condition actively, to improve the level of agricultural organization.

2.6.3 Achievements

The comprehensive productive ability in agriculture is improved remarkably . In 2011, gross production of grain was 3.3 million tons in Jiangsu Province, which had been increasing for 8 years and ranked fourth place in the nation. The provincial production per ha got new record and the production per ha in demonstration areas were ahead of other places in the province. The equipment level of agricultural facilities is perfected. The area of high efficiency facilitation agriculture and that of high standard farmland are up to 574 thousand ha and 1.93 million ha, the rate of cultivated land 12.2% and 41%, respectively. The area of standard farmland to resist calamity and that of facilitation farmland are 449 thousand ha and 168.5 thousand ha, increased 35.5 thousand ha and 30.3 thousand ha, respectively. The rates of high standard farmland and the level of comprehensive mechanization in crops’ plough and sow are 49% and 81.4% ，8% and 7.4% higher than those of other places in the province, respectively. The agricultural developed mode is changing significantly. The area of agricultural moderate scale management in the province is up to 2.3 million ha, the rate of cultivated land area 49%. The number of farmers’ professional cooperatives registered is 44 thousand and the member of them is 5.62 million. The four indexes of the number of farmers’ cooperatives registered, proportion of farmers joined cooperatives, the number of cooperatives’ members, the amount of investment rank the first in the nation. The proportion of agricultural moderate scale management in demonstration areas is 61% and 12% higher than that in other places in the province. The proportion of farmers joined cooperatives is 63.2% and 15.7% higher than that in other places in the province. The increase rate of farmers’ income is raised remarkably. The net income per farmer was ¥10.8 thousand in 2011, increased by 18.5% than in last year. The ratio of urban and rural income was 2.44:1 which was the least gap between urban and rural income in China. The net income per farmer in demonstration areas was ¥13.628 thousand, increased ¥2.832 than the average of the province.

2.6.4 The scope of application

Jiangyan is in the middle of Jiangsu Province, whose economic development is at the middle level in the whole Province. It represents the collective economy driving model especially suitable for China’s farming cultivate areas. By the way, Jiangyan takes different forms of production organization adept to （？） where farmers have/have not been transferred to the secondary and tertiary industries, which are also very consistent with farming cultivate areas current development. This model also worth to implement in other MADAs which have strong collective economic organizations.

3. Analysis on Agricultural Domestic Policies in Typical Modern

Agricultural Demonstration Areas.

3.1 Analysis on land transfer policy.

Land transfer is the foundation to realize agricultural scale management and the efficient development. Through the establishment of reasonable land circulation system, MADAs improved the efficiency of land transfer, innovated land transfer mode, solved subsequent problems after land circulation. On the foundation of promoting the registration of land contractual management right, MADAs continuously explored ways of land leasing and released related documents to promote and reward the rural land contracting right of management circulation, and built land circulation service hall at the same time to do a good job in land circulation service.

3.1.1 Modes of land transfer are diversified.

Those modes are centralized circulation collectively in the whole village, lease managements by professional farmer cooperatives, leading enterprises, professional farmers and family farms, land stock cooperation, land banks and land transfer by credit. In 2012, the added land transfer area in the County was 56.6 thousand acres and totaled 207 thousand acres which was 36.3% of the total area of contracted land.

3.1.2 Types of land transfer are differentiated.

MADAs represented by Kunshan City divided demonstration areas into parks of 26

highly efficient agriculture (including aquaculture and fruit and vegetable planting) and bases of high-quality grain and oil, according to minds of construction including unified planning, heavy investment, target industry and important actions. Land in high efficient agriculture parks was transferred by the town government and the government is responsible for the park infrastructure and production facilities. The production activities were conducted by agricultural enterprises or cooperatives and management activities were conducted by the town of agricultural technology service center. Land in bases of high-quality grain and oil was transferred by the union farmland stock cooperation established by every town and the production activities were conducted by contracted labor. The two types of land transfer were not related to the second land transfer and built a new system of land management, which formed the collective farm mode in south area of Jiangsu Province.

In terms of projects of MADAs in Zhangpu town, the land transfer was conducted by the agricultural technology service center in Kunshan, south of Jiangsu. The center was merged by service stations involved in planting base, animal husbandry base, aquaculture base and agricultural machines. Government was responsible for payment of the rent, the infrastructure and production facilities in the park, and opened bidding to public for production enterprises. Agricultural technology service center in the town was responsible for the management and operation.

As the major grain producing areas, Jinxi Town in Kunshan City established ‘farmland shareholding cooperative association’ which transferred and managed 3000 acres of land belonging to land stock cooperatives in Changyun Village, Yuandian Village and Mengzibang Village. The association was in the charge of the president and had two or three captain leading farmers every 200 or 300 acres to conduct the actual job involving production. As the actual management facility of land transfer, the association made the production plan of the whole town and relevant incentive mechanism to avoid disadvantages that famers’ interest would be damaged by the change of landownership by second transfer of land. The center guided farmers to achieve the new cooperation to promote the further development of land moderate scale management and enhance the degree of farmers organization. In this way, MADA realized the second combination of right of land management and the second optimization of agricultural production factors.

3.1.3 Rent of land transfer becomes securitized.

Wuxing national modern agricultural demonstration area in Huzhou City innovated the mechanism of ‘grain stamp’ in the procedure of land transfer in rural areas aiming to increase farmers’ income, to effectively mobilize the enthusiasm of farmers and promote the development of collective economy and the increasing the income of peasants. ‘grain stamp’ (or ‘food stamp’) is the rice (or food) voucher paid to farmers who 27

transferred land as land rent leased by land management subject in the procedure of land transfer. Farmers can not only get rice (or food) by the stamp, but also can pay for relevant commodity. Take the Yinjiawei grain and oil plant machinery cooperative in Wuxing as an example. When the cooperative was established in 2009, the chairman of the cooperative named Sun Meijin put forward the mechanism of ‘grain stamp’ innovatively. This mechanism made farmers have the choice to choose the land rent and alleviate the pressure caused by daily grain storage and ensure the long-term stability of land transfer

3.1.4 Procedures of land transfer are standardized.

Since 1999, MADAs in Tiandong County has begun to explore the land scale management by means of leasing. In accordance with the principle which is voluntary, paid, specification and order, the village committee made contract with private enterprises and individual bosses to use land to run plantations, farms, and processing plant. In December 2012, government of Tiandong County established the first rural property trading center and introduced the Management Measures of Rural Property Transactions (Provisional) . The center carried out a series of one-stop service, which standardized behaviors of land transfer and solved farmers’ difficulties of getting loans. In 2013, there is more than 15 thousand increased transferred land, which promoted rural land centered into scale management entity. The land of moderate scale management amounted to 33.5% of the whole county land in 2013 and increased by 3.9% compared with that in 2012.

3.1.5 Contracts of land transfer are capitalized.

MADAs in Jianli County of Hubei province changed from a organization led by single government to the organization led by the government and the social organization, which is walking on two legs. They took action to activate famers’ assets by expanding the scope of mortgage and building an agricultural development and financing platform. By the end of 2012, service platform and management platform had been set up. At the same time, they strengthened the butt between financial institutions and the new agricultural management operations and started the experience of refinance mortgages by rural land transfer contract and achieved good results.

3.2 Analysis on scale management policy

Upholding the premise of family management in agriculture, MADAs promoted

family management, collective management, cooperation management, business and other management mode to encourage innovation. They developed the rural collective economy, carried out the ways of taking the contract and management right as a shareholder to develop the agriculture industrialization management pattern, encouraged the right transfer to professional investors, family farm, farmer cooperatives, agricultural enterprises in the open market, as well as developed various forms of scale operation. Thus the agricultural industry organization system was innovated and the new system of agricultural operation was constructed.

3.2.1 Support leading enterprises in agricultural industrialization.

MADAs of Tiandong County conscientiously implemented a series of policies to support the development of agricultural leading enterprises, guided by the development strategy combining introducing large agricultural leading enterprises with nurturing local enterprises. The government of Tiandong County promoted the development of agricultural industrialization by strengthening investment, policy preferences and financial security. By the end of 2012, the county had more than 9 agricultural leading enterprises including 1 leading enterprise in the autonomous region level and 8 municipal enterprises. In 2012, the total sales revenue of 9 leading enterprises is 2.44billion Yuan. Led by these enterprises, Tiandong County developed agricultural industrialization according to the local conditions, gave full play to the potential of local resources,vigorously developped the regional characteristic dominant industries, and actively promoted the development of agricultural industrialization and the increase of farmers’ income.

3.2.2 Develop farmers’ professional cooperatives.

MADAs in Taizhou City of Zhejiang Province vigorously developped the cooperative through cooperation and brand marketing. They gradually established production and management mode like ‘professional farmers’ cooperatives + base + farmers’ and industrial development modes to increase the scale and enhance brands. Since 2012, MADAs in Helan County of Ningxia has been taking 1.1 million Yuan of county finance annually to encourage the development of local farmers’ professional cooperatives. In 2013, there were 20 newly established farmers’ professional cooperatives, up to 130 cooperatives which had 16.1 thousand members that amount to 42.2% of the county’s population. MADAs in Fujin city of Heilongjiang Province took measures to guide the establishment of farmers’ professional cooperatives and form the economic development pattern that every town had a special industry and every village had a brand. By the end of 2013, the City had registered 497 farmers’ professional cooperatives which had 4.672 members.

3.2.3 Cultivate professional famers and family farms vigorously.

According to the situation of local agricultural development, MADAs actively cultivated professional famers and family farms, by the introduction of modern agricultural enterprises and their business philosophy. In 2012, Tiandong County in Guangxi attracted 326 private industrial and commercial enterprises totally to invest and develop planting industry. As a result, more than 200 households were cultivated scale farmers. There were 80 farms with the scale of more than 100 slaughter annually and 38 areas that had 500 household breeding chickens under forest specially. MADAs in Cixi City of Zhejiang province actively cultivated the new types of agriculture management bodies. There were 1,117 registered family farm and 50 thousand acres of management areas, which made the City as the birthplace of family farm in Zhejiang Province and one of the national five demonstrated family farm.

3.2.3 Explore new model to joint agricultural production and marketing.

MADAs has held various marketing activities to guide enterprises and cooperatives make cooperation with each big city to sell agricultural product. In accordance with principles of local conditions and industry concentration, MADAs in Sanmen of Zhejiang Province proposed space layout from the east coast to the west mountain areas in the province. MADAs supported, transformed and cultivated agricultural products that had obvious development advantages and potential market by various ways. They guided agricultural enterprises to make strategies to develop trademarks and organize marketing activities to improve products’ visibility and reputation. Government of Tiandong County in Guangxi introduced banana planting enterprises who signed sales agreement with Beijing enterprises to conduct standard planting and thus bananas entered Beijing market directly.

3.3 Analysis on infrastructure construction policy.

MADAs took the improvement of the level of modern agricultural facilities and equipment as one of the key measures and the important symbols in the construction of the demonstration zone. MADAs played a positive role as a platform in the construction of the demonstration zone, which integrated various funds and projects to organize the high standard farmland construction and to improve agricultural

infrastructure. MADAs vigorously developed the facility agriculture to accelerate agricultural equipment, mechanization and facility, and laid an important material foundation to improve the construction level of MADAs.

3.3.1 Strengthen the field construction and construct high standard farmlands

MADAs are constructing a number of high standard farmlands with concentrated areas, convenient facilities, integrated technology and efficient ecology. In this way, they promoted the improvement of the basic production conditions in agricultural demonstration areas and developed ecological agriculture to improve the level of agricultural informatization. Then high-quality agricultural production base and agricultural technology integration demonstration base were formed. MADAs in Jiangsu Province had high standard farmland up to 56% which was 8%higher than the provincial average level. The comprehensive agricultural mechanization level was 85.2% which was 9.2% higher than the provincial average level. In 2012, 10 MADAs in the province outputted 8.11 million tons of grain which accounted for 24.1% of the province’s total output. The high-efficiency facility agriculture area in MADAs reached 18.8% of cultivated area ratio, which was 4.9% higher than the provincial average level.

3.3.2 Promote agricultural technology and equipment to realize agricultural mechanization

MADAs develop the agricultural infrastructure and equipment guarantee by adhering to modern equipment and method. By the end of 2012, 8 MADAs in Heilongjiang Province established 87 agricultural machinery cooperatives and purchased 97 thousand sets of large farm machines. MADAs in Zhejiang Province strengthened the support on agricultural technology and equipment, vigorously promoted the construction of agricultural public service system and implemented agricultural mechanization promoting project. Tiandong County in Guangxi promote mechanization technology to plant and harvest rice and sugarcane to the whole county. In 2012, the agricultural machinery power in the whole county totaled up to 315.5 thousand kilowatts which is 4.9% higher than the provincial average level.

3.3.3 Develop agricultural facilities and accelerate agricultural transformation and upgrading

One of the important tasks of the State Construction in MADAs is to promote the

development of facility agriculture and speed up the development of multifunctional, intelligent, economic facility agricultural equipment to make new progress in the field operation, facility cultivation, breeding, deep processing, storage and transportation and other sectors. In 2013, Tiandong County in Guangxi Province built 11,285 new rice seedling greenhouses and 45 intelligent germination workshops, which all realized intelligent, industralized and mechanized production. 43,275 new vegetable greenhouses, 7,516 solar greenhouses, 187 modern demonstration dairy farms and 102 standardized pig farms were built. The improved level of agricultural facilities and equipment not only accelerated the process of agricultural modernization construction but enhanced the ability to resist natural disasters. The area of high-efficiency facility agriculture in MADAs of Jiangsu Province reached 18.8% of the cultivated area which was 4.9% higher than the provincial average level. The proportion of high-grade facilities like Su type solar greenhouse and standard steel shelter is rising continuously and modern information technology has been widely applied.

3.3.4 Integrate infrastructure investment and investment channels.

MADAs deepened the reform, transformed functions and innovated mechanisms further by the existing special funds channels in accordance with the overall planning and main construction tasks. Agricultural project funds in government departments were integrated by four principles that include clear channel, same usage, special fund for special use and improved efficiency. In this way, a project fund integration pattern was formed to ensure MADAs’ need for funds. Zhejiang Province gives priority to approved projects in MADAs and arranges funds to support the development of MADAs. In 2012, MADAs in Jianli County of Hubei Province got 300 million Yuan used to agricultural infrastructure construction projectsincluding agricultural comprehensive development, land leveling, grain productivity improvement and brought 600 million Yuan further investment. The government used these funds to play a leading role in agricultural machinery purchase subsidy and links where farmers need support, which made the agricultural machinery power level up to nearly 1.3million kilowatts which was 57.2 thousand kilowatts higher than that of last year. Agricultural mechanization level reached 70% which increased by 5 % higher than in 2011.

3.4 Analysis on agricultural science and technology innovation and application policy.

By adhering to changing traditional agriculture by modern science and

technology, MADAs enhanced and strengthened the function by introduction, integration, application, demonstration and popularization of new varieties, new technology and new equipment, and built a batch of intensive application areas and radiation sources to apply agricultural science and technology achievements, to accelerate the transformation and application of agricultural scientific and technological achievements and promote agriculture technological progress, industrial structure optimization and organization management innovation, which greatly increased land productivity, labor productivity and the rate of resource utilization and improved the quality and benefit of agricultural development.

3.4.1 Promote transformation and introduction of agricultural science and technology achievements.

MADA is an important base introducing new technology of agricultural technology and promoting the transformation and application of agricultural science and technology achievements. MADAs made park as a platform, and adjusted itself to the regional agricultural development through the technical maturation and achievements transformation. And through technical communication and diffusion among the core zone, demonstration zone and radiation zone, MADAs promoted the transformation, demonstration and application of new agricultural technology achievement greatly. 3 demonstration zones for film drip irrigation technology of rice, and 4 demonstration points for bowl seedling planting technology have been established, with a demonstration area of 2 thousand mu , respectively in Ningxia Hui Autonomous Region. The Helan County is the first to breed white shrimp from South America in the area of 1.3 thousand mu. The local governments held organic agricultural training course with South Korea to exchange the learning about organic rice production. The governments established 15 professional demonstration areas to guard against pests in grains and vegetables, and 20 demonstration areas using the technology which has been extended to 28 thousand area to trial soil testing to determine appropriate fertilizer formulas. They also got 2 Chinese practical new patents using cellphones to remotely control relevant agricultural production.

3.4.2 Play function to display modern agricultural science and technology.

Through innovating concept and cultivating the typical, MADAs was able to build exhibition area to show agricultural science and technology achievements and speed up the development of modern agriculture. Through visiting, investigation and other methods each exhibition area learned the good experiences and good practices from the advanced regions , and constantly improved the level of development of modern agriculture. Fujin City in Heilongjiang Province built modern agriculture

demonstration belt by integrating projects’ advantages, assembling advanced technology, optimizing agricultural equipment and supporting infrastructure. Some engineering highlights of modern agricultural was constructed along the belt. Especially, MADAs in Yongsheng village and Fu Lai village which exhibited new achievements of modern agriculture construction in Fujin City made the new pattern with demonstration areas in city, demonstration parks in town and demonstration field in villages.

3.4.3 Establish the mechanism to dock the modern agriculture technology

Technology dock is one of core functions of MADAs which constantly improve mechanism with agricultural technology development, demonstration and promotion, to get the effective docking among scientific research institutions, enterprises and farmers. In 2012, there were 205 newly established technology park in 8 MADAs in Heilongjiang Province. Zhaodong City made docking with research departments and enterprises to develop high yield rice and established 12 research and demonstration bases. By the cooperation with the province science institute, Liming Town in the city conducted planting experiences and got more than 75% of experienced varieties , which grow better than others and the yield was up to 750-900 kilogram. Through cooperating with Yuan Longping Hybrid Rice Research Institute Qing’an County developed Longqing rice and obtained application in many areas. The county introduced new varieties to demonstrate and choose better ones. As a result, all seeds of plant cultivated in the county were soaked in medicine and the standardization of agricultural production rate was up to 90%.

3.4.4 Promote constructions of agricultural public service system at grass-root level.

Supported by the agricultural science and technology, MADAs vigorously promoted constructions of the agricultural public service system by implementing agricultural technology extension engineering and promoting the rapid development of agricultural science and technology innovation. MADAs in Zhejiang Province established agricultural public service center to extend agricultural technology, prevent plant and animal diseases and keep the quality and safety of agricultural products. Huzhou City in Zhejiang Province established 10 agro-technical promotion alliances which had 102 agricultural technology experts, 202 agricultural technics and 902 production patterns. Jiangsu Province established agricultural social service subsidy mechanism in the way of government purchase to construct new agricultural social service system. Finance in the province made Jiangyan MADAs as the pilot county to experience the reform of farmers specialized cooperative organizations’

development and the social service in agricultural production. Haian MADAs gave professional personnel who service for plant protection in the county the person accident injury insurance to get the stable service team who actively promoted the grain production services. These actions were welcomed by farmers.

3.5 Analysis on Talents cultivation policy.

In order to accelerate the introduction and cultivation of talents, MADAs established a new system to recruit science and technology personnel, and attract and encourage domestic and foreign talented people to the demonstration areas. At the same time, MADAs strengthened technical training on farmers to train a group of farmers as technical backbones and farmer entrepreneurs.

3.5.1 Introduce high-end talents in agriculture

MADAs actively implement the strategy that included agriculture, science and technology and education to develop the high-end technology industries. Tongshan MADAs in Jiangsu Province has signed cooperation agreements with the Chinese Academy of Agricultural Sciences and Space Research Institute to build agricultural science and technology incubator bases. Wuxi MADA took innovation in biological agriculture as an important measure to develop agricultural economic new growth point and introduced 74 leading innovative talents to improve the level of agricultural high tech support. Tiandong County in Guangxi Province signed cooperation agreements with science and technology departments to carry out cooperation in promoting science and technology innovation, key agricultural technology integration application and personnel training. 280 acres of scientific research base, 5,000 acres of fruit and vegetable standardization planting demonstration base and 50,000 acres of sugar high-yield base were built to promote the popularization of crop in large planting area.

3.5.2 Expanse agricultural technology service at grass-root level.

MADAs continue to strengthening the public functions of agricultural technology extension agencies at grass-root level and made efforts to improve regional technology extension organizations. They optimized the mechanism of agricultural technology extension conditions at grass-root level and supported agricultural research institutes, Universities and agricultural vocational colleges to participate in the construction of diversified agricultural technology service system. MADAs in Fujin city of Heilongjiang Province continue to strengthen the training on existing agricultural personnel, and use different ways according to the different needs.

They cultivated a number of talents specializing in agricultural technology promotion by a project called the "million agricultural extension backbone personnel training plan" launched by Ministry of Agriculture. They improved the overall quality of the technology extending contingent comprehensively by updating their knowledge. They vigorously promoted the construction of agricultural extension service posts and encouraged college graduates to villages and towns to undertake agricultural technology extension and service work. They improved the structure of agricultural technology promotion team to improve the service level and explored the personnel qualification system of agricultural technology personnel by examination who can’t be engaged in the agricultural technology extension work until they obtain the corresponding post occupation qualification certificates.

3.5.3 Train entities on modern agricultural management.

MADAs explore the free training system to improve the model subject leader's quality and strengthened education and training to professional investors, family farms, leaders and members in farmer professional cooperatives to improve the degree of these organizations. MADAs in Jiangsu Province carried out identification and monitoring on family farms and demonstrated the cultivate work on family farms. They guided to the set up standards of professional farmers. Taicang MADA implemented vocational training of farmers and signed an agreement with Nanjing Agricultural University to train and admit 100 students. Then, the agreement got application in other places. MADAs in Helan County in Ningxia encouraged agricultural technicians to start business in this way to promote agricultural technology. 4. Short Term policies to Promote Agricultural Modernization.

The development of Agricultural modernization in China has made remarkable achievements. But the process is still restricted by a series of complex factors. Therefore, in the short term, we must be guided by the concept of scientific development through adjusting agricultural price support policy, agricultural subsidy policy, agriculture investment policy and agricultural science and technology innovation and application policy to make up some weak links in the development of agricultural modernization, and stimulate potential power and improve the comprehensive competitiveness of agricultural modernization.

4.1 Agricultural price support policy.

The main target of the development of agricultural modernization in China is to stablize agricultural production and to improve the income of the farmers, which must make a stable and reasonable price of agricultural products as an important premise. China formally implemented the protective price of grain and other major agricultural products purchase policy in the beginning of 1990s, and means of price support has 36

improved so far. But there are still some deep levels of problems. In the requirement for the development of modern agriculture, agricultural price support policy in China should be adjusted and perfected.

4.1.1 Change ways in supporting agricultural price.

One characteristic of agricultural price protecting policies in agricultural developed area like USA and Europe is changing from the price support to income support. This two support ways are widely applied all over the world. Generally speaking, when an economic entity is in the beginning of industrialization and the supply of agricultural products cannot meet the demand, the main aim of agricultural policies is to increase the output and stablize agricultural producing and the price supporting policies are the efficient choice. When the agricultural economy is developed and the demand of agricultural products cannot meet the supply, the main aim of agricultural policies is to increase farmers’ income. So we should change from the price supporting policy to income supporting policy at right time, to improve agricultural productivity and promote the balance and harmonious development of the agricultural economy and rural society.

4.1.2 Perfect the system of the minimum purchase price policy.

Making a reasonable minimum grain purchase price policy is the core of supporting agricultural price policy. Nowadays, income from planting grains is the one forth in farmers’ total income and the main source of farmers’ income. When the grain price has fallen too much and is under the minimum purchase price, the enterprise would purchase grains at the minimum purchase price appointed by government, which played a key role in guiding the grain price. Therefore, in order to compensate the rising cost and increase farmers’ income, the minimum purchase price should be on the proper increase. However, the domestic grain price has been higher than international grain price,which makes the rising space of domestic grain shrunk and new factors faced to make the minimum purchase price comes. According to the situation in China, in order to protect farmers’ interest and grain safety and to ensure the smooth development of agricultural modernization, we suggest that grains that are listed to trade in the minimum purchase price should made into a long term mechanism to stabilize the price. Make a reasonable minimum purchase price and publish it to farmers. In the meanwhile, the range of used minimum purchase price can be expanded according to different areas. Corn and soybean should be listed into grain that traded at the minimum purchase price in the three provinces in the Northeast.

4.1.3 Insist on the marketization reform orientation of agricultural support price.

After stepping into a new stage of agricultural modernization, China should strengthen the mercerization reform orientation of agricultural support price to show the change of agricultural support price from pressing price to supporting price. Firstly, the agricultural product storage system should be perfected to stablize agricultural production and avoid sharp price fluctuation and make a nice foundation and surroundings. Secondly, perfect the ways of price management to lay a foundation to reform. Thirdly, arrange reasonable found to subsidy the agricultural price.

4.1.4 Legalize agricultural price support policy

Policy of agricultural product implementation is carried out by the reform of legislation in the United States and the EU . The system of agricultural products can ensure effective implementation of policy in the long-term and give agricultural producers a clear signal to reduce farmers' policy risk. China should establish and perfect a set of relatively complete and flexible system of laws and regulations to support the price of agricultural products. Along with the change of the social economic status and the need of agricultural development, agricultural products support price policy should make the corresponding adjustment.

4.2 Agricultural subsidy policy.

After the year of 2003, China gradually began to establish agricultural subsidies policy system. These subsidies policies were implemented, which mark the comprehensive transformation of agricultural policy in China and play an important role in promoting the modernization of agriculture. Nowadays, agricultural modernization in China has entered a new period and agricultural subsidy policy system should be constantly improved, adjusted and optimized, among which there are some policies facing greater challenges. In order to support agricultural modernization and achieve greater success, agricultural subsidies policy system in China should make some relevant adjustment.

4.2.1 Clear the target of adjusting the agricultural subsidy system

Compared with the developed countries, the level of agricultural subsidies and support in China is still low. But China also do not have the ability to make fulland

massive subsidies to support agriculture. Therefore, the policy target of the design of agricultural subsidy system at present should not be too wide and too general and must concentrate on solving the current outstanding contradictions and key issues in agricultural development. The core goal of agricultural subsidy policy at this stage is to ensure grain security and the supply of major agricultural products and promote the increase of peasants' income. The comprehensive goal is to ensure the food safety, environmental protection, agricultural competitiveness, agricultural sustainable development and agricultural multifunction. Overall consideration should be taken based on the realization of the core target . The agricultural subsidy policy should foster the development of and agricultural modernization and new agricultural management entities. The targets adjustments are these. Firstly, implement professional farmers subsidies; secondly, implement commercialization large grain planting farmers and give credit to provide subsidy of low loans’ interest; thirdly, give direct subsidies to independent investment on water conservancy infrastructure construction; fourthly, implement agricultural environment subsidies.

4.2.2 Continue to increase the intensity of direct subsidy

China should continue to increase the introduction of policy to support agriculture and benefit, and strengthen the direct subsidies to farmer to ensure the farmers as the main investment body in grain production. At present, the main investment body in grain production is still common farmers in China. In order to guarantee Chinese grain security and social stability, China should actively encourage farmers to increase investment on grain production and hook direct subsidies for grain with the amount of grain planting area, yield and trade. Establish and perfect the dynamic adjustment system of the comprehensive agricultural subsidies. According to price changes in agricultural product material and following relevant principles, make reasonable subsidy to meet the cost of agricultural product material and support the key grain planting farmers.

4.2.3 Increase the support on agricultural general service

Chinese agricultural subsidy policy should gradually increase and optimize the investment of agricultural general services to speed up the process of agricultural modernization. Because the supply of basic public service system was formed by difference in urban and rural areas in history, the supply of basic public services in rural areas is insufficient, which restrict the development of agricultural modernization and prevent the increase of farmers’ income. International experience shows that the attention on supporting agricultural general services will bring long-term and steady development of agricultural production. The market distortion

and international trade friction will be reduced 1 . So increasing the support on agricultural general service can efficiently solve difficulties in rural areas infrastructure construction, scientific research and technology promotion, farmer s’ production skills and export of agricultural products to develop agricultural production smoothly and increase farmers' income steadily.

4.3 Agricultural investment policy.

After the Sixteenth Congress of the Communist Party of China, China's central government adhered to the priority to solve the issues concerning agriculture, the country and the farmers as the most important work, by deepening rural reform, perfecting the agricultural policy to strengthen agriculture and rich famers, and substantially increasing the investment in agriculture, which promoted the change from traditional agriculture to modern agriculture. With the enhancement in comprehensive national strength and financial strength, the degree of agriculture investment should be increased further, to support the development of agriculture more firmly than before.

4.3.1 Increase public financial investment

Take the agriculture, rural and farmers as a priority area for public expenditure and investment in the central government’s budget to ensure that investment could continue increasing and concentrate on the key producing areas and the main advantageous areas. Continue to increase agricultural investment and perfect agricultural financial investment management measures to improve the precision and the directivity of agriculture financial input. Make overall planning on enhancing food security ability, strengthening the agricultural infrastructure construction, focusing on water conservancy, accelerating the construction of long-term mechanism of agricultural sustainable development, improving the mechanism of agricultural products market price and regulation, increasing the support on agricultural management entities and accelerating rural reforms. Make the additional input to major agricultural products, new agricultural management main entities, the main producing areas to promote financial funds to play a greater efficiency. At the same time, perfect the interest compensation mechanism between main grain production area and the main grain sales areas. Increase award in counties who plant grains, oil and breed pig. Steadily promote the integration of agriculture related funds and improve the efficiency of fund to promote the agricultural modernization.

1 Liang Chun. Analysis on economics of agricultural subsidy policy effect . northern review. 2013 (6): 154-158. 40

4.2.2 Improve the diversified modern rural financing system

The development of agricultural modernization needs to reform and perfect the business category of the rural commercial finance, policy finance and credit cooperative financial in order to achieve multi-level financing channels and get continued financial support. Need to encourage conditional place, on the premise of strict supervision and effective prevention of financial risks, to attract social capital and foreign capital and encourage various economic entities to set up a variety of direct service for agriculture, rural and farmers and create financial channel for private funds to support agriculture. Speed up the development of small and medium-sized financial institutions represented by small and medium-sized banks to cultivate the competition mechanism. Innovate financial products to provide diversified financial services to farmers and rural enterprises. Establish and perfect the farmers and rural enterprises mortgage guarantee mechanism and improve the regulatory framework for credit institutions.

4.4 Agricultural science and technology innovation and application policy.

Agricultural science and technology innovation and application system has played a very important role in maintaining long-term food security in China and ensuring the effective supply of agricultural product and is one of the most important parts of the modernization of agriculture. However, with the continuous development of agricultural modernization, the issues of current agricultural science and technology innovation and application system in the operating mechanism, capital investment and other aspects are exposed increasingly, which makes agricultural science and technology innovation and application systems become a weak link in agricultural development. Therefore, MADAs are in urgent need of great innovation and exploration.

4.4.1 Perfect the innovation system of agricultural science and technology.

Science and technology is the prime productive force. If the development of agricultural modernization in China obtains continuous power and international competitiveness, increasing the efficiency of agricultural science and technology innovation and perfecting the system construction of the system is needed, which include the following three aspects. Firstly, create a batch of agricultural science and technology research and innovation platform, which need to be based on agricultural research institutes and

agricultural university. Based on the existing national or provincial key laboratories, concentrate on building a number of national and provincial agricultural science and technology innovation research center. Train and introduce a group of academic leaders. Establish an operating mechanism with opening, flow, competition and cooperation to become the cradle of agricultural high-tech talents with innovation on agricultural technology. Secondly, actively promote the combination between agricultural science and education and clear mechanisms to feedback the supply and demand of agricultural science and technology information. Adjust the division of labor and cooperation among all levels to agricultural science and technology innovation and application mechanism. Establish new organization system to popularizethe application of agricultural science and technology and combine the organization in agricultural universities, agricultural scientific research institutions. Encourage talents in the agricultural science and technology to actively participate in the economic interest community with farmers, farmers’ professional cooperatives, and agricultural leading enterprises. Strengthen the construction of agriculture science and technology trading market and establish online system to regularly publish agricultural science and technology achievements. Third, intensify the integration of the agricultural scientific research institutions. Straighten out the management system and set up mechanism scientifically to build a group of efficient agricultural science and technology research and develop a stable and capable team with reasonable structure. Strengthen the innovation ability of agricultural science and technology. According to the requirements of agricultural science and technology development, establish docking mechanism among agricultural scientific research institutions, agricultural enterprises, farmers’ professional cooperative organizations and farmers. Establish an agricultural science and technology innovation mechanism including subject out of reality and achievement out of production.

4.4.2 Reform the application and popularization system of agricultural science and technology.

At present, agricultural science and technology innovation and application system is dominated by the government in China and administrative means are carried out, which results in problems concerning disconnection among agricultural science and technology personnel, production and the needs of farmers. As a result, conversion rate of science and technology achievements in China is only 30% to 40% which is far below that in developed countries which is 65% to 85%. Perfecting the application and popularization system of agricultural science and technology should follow three aspects. Firstly, clear the promotion system of science and technology. Secondly, promote innovation of agricultural science and technology and reform of application team at grassroots level. Thirdly, increase the cultivation system of agricultural science and technology personnel. 42

4.4.3 Improve innovation and application mechanism of the agricultural science and technology.

In recent years, the percentage of the agricultural technology innovation and application investment in public finance has declined steadily in China. The construction of agricultural science and technology innovation and application cannot be meted by existing conditions, which caused the obsolete of promotion facilities and the backward of promotion means. So improving innovation and application mechanism of the agricultural science and technology includes the following aspects. Firstly, establish the investment mechanism of agricultural science and technology popularization and application and innovation with a steady growth. Secondly, increase credit input to agricultural science and technology innovation and application. Thirdly, accelerate to expand channels of investment and financing.

4.5 Farmer income support policy

Increasing farmers’ income is one of aims of modernization of agriculture. Agricultural modernization has made breakthrough progress, and there has witnessed yearly increase of grains, rich supply of vegetables, continuous improvement of the qualities of agricultural products, optimization in the agricultural structure and improvement of agricultural industry management level, which effectively promoted the increase in famers’ income. But withfamers’ income increasing, the income gap between urban and rural residents is also increasing. So we should take the promotion of the sustained growth of peasants’ income as a priority.

4.5.1 Speed up the construction of agricultural modernization industrial system to increase farmers' income.

Farmers’ main income is farmers' household business income. In the course of the construction of agricultural modernization, improving agricultural management benefit has three focuses: firstly, strengthen the construction of grain bases and characteristics agricultural bases to build a group of agricultural industrial parks and industrial bases; secondly, encourage and support to promote the development of industrial belts with agricultural advantages and characteristics; thirdly, speed up to cultivate and regulate large planting farmers and family farms and establish benefit coupling mechanism among agricultural management entities to insure farmer's rights.

4.5.2 Implement preferential agricultural policies to increase farmers’ transfer income.

Farmers’ transfer income is an important part of per income in rural household. In the course of the construction of agricultural modernization, increase financial subsidies to farmers in production and investment in the county and town levels. Promote the reduction of agricultural production costs and focus additional subsidies to agricultural production and advantageous areas. Earnestly carry out relevant policies involving subsidy and strengthen the poverty alleviation and development project. Perfect the rural social security system and rural public service system.

4.5.3 Speed up the reform of property rights to increase farmers' property income

In the process of agricultural modernization, we need to explore channels to increase farmers’ property income. Deepen the reform of rural property rights system with clear rural resources assets, market-oriented allocation mechanism, capitalized factor of property right and standardized management and supervision to establish a modern system with clear rural property ownership. In the premise that the farmers' land contract rights and basic income are guaranteed, encourage farmers to transfer the land contracting right. Let farmers share the income from land transfer and improve the rural land value.

4.5.4 Promote employment and entrepreneurship, increase farmer income from wages

Wage income is the second constitute in farmers’ income. In the process of agricultural modernization, releasing rural labor and accelerating the transfer of rural surplus labor can increase the farmers’ overall income. Insist on the orientation of market and guide the export of labor services scientifically. Carry out the cooperation of regional labor force vigorously and strengthen the establishment of an effective labor docking and cooperation mechanism with developed areas. Strengthen the exportation of labor services and establish working mechanism including training, employment and activities to safeguard the legitimate interests of migrant workers earnestly. Speed up the pace of small towns’ construction and guide the promotion of rural migrant workers. Guide and support rural migrant workers back home to start businesses.

5. Long Term Policies to Promote Agricultural Modernization

5.1 Land transfer policy.

Period from now is the key period for China to speed up the development of modern agriculture and promote the integration of urban and rural areas, and also a tough period to promote land transfer. In order to further promote the land transfer, MADAs should take optimizing the allocation of resources and increasing the income of the farmers as goals, and take ways to clear land ownership, stablize the land contractual rights and enliven the land operation rights. MADAs should continuously innovate the form of land transfer, perfect the land transfer mechanism, standardize the land circulation management and construct the new system of agricultural operation to speed up the modernization of agriculture.

5.1.1 Prolong the time limit of land transfer.

Prolonging the time limit of land transfer is a key work to making the land circulation policy in the next period. If the time limit of land transfer is not long, the entities would input on land less than others and affect the development of modern agriculture. Government need make and adopt comprehensive policies and measures. Firstly, strengthen the publicity of relevant policies and lows and guide farmers and agricultural management entities build long term contracts. Secondly, innovate land transfer forms. Thirdly, perfect the incentive mechanism. Fourthly, perfect the price mechanism.

5.1.2 Expand the scale of land transfer.

The expansion of land transfer scale need focus on expanding the total area and integrate land in a small scale. On the one hand, continue to maintain a sustained growth rate of land transfer. At present, the rate of land transfer acrossthe nation has been more than 60%. But there is larger room to improve. On the other hand, improve the efficiency of land integration. The purpose of promoting the transfer of land is to realize the moderate scale management of land and improve the agricultural competitiveness. Therefore, the main work of land integration should be emphasized on the land with area below 20 acres to improve land productivity and labor productivity.

5.1.3 Cultivate new agricultural management entities

New agricultural management entities are the main driving force of agricultural

modernization. The training on entities and land transfer should be synchronized to form a virtuous cycle mechanism with agricultural development. Increase the cultivation and support, and give a tilt in fiscal subsidies, financial insurance, land and electricity using and science and technology. Promote new entities’ production management level, service drive capability and market competitiveness.Explore the entry mechanism and take effective measures to guide the various types of management entities to change to enterprises and real management entities.

5.1.4 Regulate land transfer program

Regulating land transfer program is the guarantee for land transfer in the process of the modernization of agriculture. Firstly, strengthen the land contractual management and do a good job of registration on contracted land to safeguard farmer's right. Secondly, promote the standardization of land transfer and improve the transfer rate. Thirdly, coordinate disputes in land transfer timely. Relevant organization should fully grasp the dynamic information of land transfer to guarantee rights in both sides.

5.1.5 Improve the service system of land transfer

In order to guarantee the smooth transfer of rural land,the service system of land circulation should be perfected and improved. The construction of land transfer service system should take the work at village level as the important, the town level as the key and the county as the guarantee. All local governments should speed up the standardization in land transfer services and ensure that 80% of the town governments can be built as standardized service organization within 5 years to provide more inclusive land transfer services in the full range and of high quality.

5.2 The agricultural infrastructure construction policy

In the constraints by resources and environment, requirements of protection of national food security, increasing farmers’ income and promoting agricultural modernization determine the important role of agricultural infrastructure in agricultural production, society and economy. Presently, the shortage and wrong distribution in agricultural infrastructure supply restraint the development of agricultural modernization in China. MADAs need make relevant policies to adjust the supply system of agricultural infrastructure, to meet the requirements of agricultural modernization and promote the development of modern agriculture.

5.2.1 Increase government financial input significantly

The low government financial input is the main reason making dilemma in 46

Chinese modern agriculture infrastructure. In order to break the predicament in agricultural infrastructure construction, finance at all levels should increase investment further in the premise that the majority of infrastructure are public goods or quasi-public goods. Firstly, gradually increase the proportion of investment of the central financial and provincial financial on agriculture and raise the investment on agricultural infrastructure. At the same time, make regulation clear that new national debt should be put into agriculture, rural and farmers. Secondly, study and formulate the Agricultural Input Law o n the basis of Agriculture Law to clear responsibilities at all levels of government financial and construct a stable mechanism of financial support. Thirdly, issue agricultural infrastructure construction bonds to gather fund to improve the condition of agricultural condition.

5.2.2 Introduce social investment entities actively

For the construction of different types of infrastructure, different investment main entities should be introduced in order to give full play to their strengths and advantages. Chinese should actively build a diversified investment mechanism, to encourage and attract social investors to solve the problem of infrastructure funds through the market mechanism. Firstly, government should give social investors certain preferential policies and incentives. Secondly, effectively solve the financing problems. Thirdly, government should also create a relaxed environment for the social investment by providing good software and hardware conditions, especially to set up and perfect the relevant laws and regulations, and transform the government function to provide the real service for social investors.

5.2.3 Clear keys in the construction of agricultural infrastructure

In the construction process of Chinese agricultural infrastructure, problems in construction of agricultural infrastructure are serious. So clearing keys in the construction of agricultural infrastructure is necessary. The keys are as follows: 1.farmland water conservancy facilities, especially build and develop small irrigation and water conservancy; 2.cultivated land protection and land improvement; 3. the construction of eco-agriculture; 4. rural transport facilities construction; 5. construction of rural power grids and the drinking water project.

5.2.4 Perfect operation and maintenance system of agricultural infrastructure

For long term, problems in operation and maintenance of agricultural

infrastructure have not gotten enough attention. It is very necessary to improve the operation management system of agricultural infrastructure. Every region should choose fit and feasible operation and maintenance system and management mode, according to the different nature of property right. As the ideal situation, the property infrastructure should be made clear and implement to the peasants to improve farmers’ enthusiasm for management of agricultural infrastructure.

5.3 The policy to support moderate scale of agricultural operation.

In recent years, the development of modern agriculture Chinese has showed characteristics, which are more intensive, specialized, organized and socialized. New types of management main body, which are professional farmers, family farms, farmer professional cooperatives and leading enterprises have become the leading force in modern agriculture. However, at this stage, lack and imperfect of policy have become the main obstacles to the development of appropriate scale operation in agriculture. So government should change the idea and innovate institution, to create a good institutional environment for the agriculture moderate-scale management.

5.3.1 Innovation on land policy

Agricultural moderate-scale management need insist on improving the household contract management system to realize a reasonable, orderly, paid land transfer. In this process, we should define the ownership of rural collective land and farmers’ land. Clear farmers’ dominant position in land transfer and make perfect land transfer system to ensure land transfer orderly. Establish a coordination mechanism to solve land transfer disputes as soon as possible to safeguard farmers’ legitimate rights and interests and to solve the contradiction in cooperation.

5.3.2 Innovation on security policy

Security policies mainly involved issues that how farmers obtain sustainable development, livelihood and other ability because the transfer from the traditional agricultural production. From current reality in China, innovation on the household registration policy, social security policy and employment policy in very needed. First of all, reform the existing household registration policy to eliminate the difference between in urban and rural areas and gradually establish a unified, fair and free flowing labor market; then, promote the reform of the rural social security system, and actively build and perfect social security system for pension, medical, education, etc..

5.3.3 Innovation on financial policy

The smooth promotion of moderate scale management of agriculture cannot do without financial support and the agricultural insurance policy is more needed than others. First of all, perfect financial supporting agriculture policy should be established to increase agricultural financial support and increase the investment in agricultural infrastructure. Then, play the function of finance in supporting agriculture, actively make and improve a formal financial support policy to help agricultural development. Finally, a complete and unified policy agricultural insurance and commercial insurance should be established gradually to reduce the risk of agricultural management of scale.

5.3.4 Innovation on agricultural technology policy

Agriculture moderate scale management needs to improve the support of agricultural science and technology policy system. First of all, a long-term mechanism of agricultural science and technology investment and government fiscal revenue hook linkage should be established as soon as possible to ensure the construction conditions for agricultural science and technology innovation. Secondly, make a reasonable distribution of science and technology and divide scientific research institutions function scientifically. Cultivate an agricultural science and technology team with rational structure to enhance the comprehensive competitiveness of agriculture. Thirdly, actively improve the agricultural technology extension system at the basic level and promote the agricultural technology extension system. Fourthly, strengthen agricultural technology research and development to protect national industry security and promote agricultural efficiency and farmers’ income.

5.3.5 Policies on cultivating new occupied peasants

Policy on establishing a system to cultivate and support new occupied peasants has great practical and significance meanings. Foreign experience on training occupied farmers should be learnt actively. On the one hand, increase the investment on basic education in rural areas and policy arrangement for these areas to improve the overall quality of farmers and broaden their scope of employment. On the other hand, we should vigorously develop the rural occupation technology education and adult education. In addition, government also should publish standards and norms on the relevant occupation farmer training and certification as soon as possible. Establish special funds to support training and give policy tilt in credit, tax, agricultural infrastructure construction, etc..

5.3.6 Policies supporting agricultural social service system.

Agricultural social service system aiming to provide full service for agricultural production activities has remarkable meanings on promoting the moderate scale management of agricultural. First of all, we must distinguish the difference between public welfare social service system and the market social service system. Secondly, supply multiple services for marketing cooperatives, specialized farmer cooperatives and leading enterprises. Encourage various service agencies to expand their service areas and strive to extend the service chain. Thirdly, vigorously improve the agricultural material circulation service system. Support agricultural enterprises to establish a wide distribution of sales points and agricultural distribution center. Establish mechanism to feedback agricultural supply and demand information and monitor the price of agricultural material. Fourthly, improve agricultural products sales network and foster new agricultural management entities. Under the guidance of the government, introduce market mechanism and actively construct information network platform, agricultural products market and agricultural products cold chain logistics base.

5.4 Agricultural resources and ecological environment protection policy

China faces grim agricultural resources and ecological environment problems, such as the shortage of the resources of cultivated land and water, agricultural pollution, rural domestic pollution, the warming climate and natural disasters. Agricultural ecological environment has close relation with agricultural modernization and sustainable development. So MADAs should explore scientific countermeasures to improve the ecological environment of agriculture urgently.

5.4.1 Perfect environmental legislation and enforce strictly.

In the legislation of protecting agricultural ecological environment, the existing laws in China are decentralized, not systematic, not specific and have weak targets. In practice, it is difficult to be effectively implemented. Therefore, a national agricultural ecological environmental protection laws and regulations must be formulated to standardize behaviors of the rational development and utilization of agricultural resources, control pollution, protect and improve the agriculture ecological environment. First of all, establish a perfect legal system of agricultural resources and environment. Then, strengthen the construction of professional laws under basic laws.

5.4.2 use economic ways to reduce agricultural pollution

While emphasizing the regulations and policies, we should strengthen the implementation of economic policies. Economic policies include the property, prices, taxes and fees. At present, problems including unclear definition of agricultural resources property and unstandardized property rights transfer mechanism exist in China. Property rights of agricultural resources should not only be clear, but also get long-term security. Secondly, how to set a reasonable price of agricultural resource products and agricultural chemicals is also a problem. The charge of environmental tax can change the agricultural production and consumption patterns and promote the development and utilization of resources. In order to promote the sustainable development of agriculture, the scope of environmental tax should be expanded further to encourage users to use resources safely and efficiently

5.4.3 Promote endogenous development of environmental protection under the government’s guidance

At present, the decision of Chinese agricultural and environmental policy is conducted through the "top-down" command, which brings greater administrative burden and neglects farmers' participation in sustainable development of agriculture. based on characteristics of pollution of agricultural environment, the policy of agricultural resources and environment should have more guidance and incentive compatibility, that is, through some incentive or supportive measures and means lead farmers to adopt environmental behavior. Through the establishment of ecological compensation of agricultural system, encourage farmers to maintain and conserve agriculture ecosystem. Through government purchase, encourage and support farmers to participate in government protection activities. Through the implementation of administrative awards, guide the farmers to protect agriculture environment.

5.5 The agricultural insurance policy

Since 2007, China has established agricultural insurance system by government subsidies whose essence is the agricultural disaster compensation system established by the national fiscal policy. Through nearly 7 years’ practice, the agricultural insurance system not only has the successful exploration, but also presents the defects in the design of the system. As one of the important guarantees to realize the modernization of agriculture, a high level of agricultural insurance has close relationship with agricultural modernization. Therefore, to make the agricultural insurance promote the realization of modern agriculture more effectively, MADAs need perfect the relevant system about agricultural insurance.

5.5.1 Perfect agricultural insurance system

Take the promulgation of Agricultural Insurance Regulations as an opportunity to perfect specific rules targeting at a series of changes and matching on institutional arrangements to promote the rapid, synchronic and healthy development of agricultural insurance and agricultural modernization. Firstly, implement agricultural insurance and reinsurance system. Secondly, the agricultural insurance should be mandatory through legal means.

5.5.2 Introduce social resources

For long term, as a result of the inefficient government intervention in agriculture and agricultural insurance, social capital is not willing to invest in agriculture. In order to introduce social resources, the following suggestions should be considered. Firstly, seize the current favorable opportunity to guide the various funds including private capital, financial institutions and foreign hot money landing onto agricultural areas. Secondly, increase government financial subsidies for agricultural insurance. Thirdly, promote the high quality of human resources flow to agriculture and agricultural insurance field.

5.5.3 Reform agricultural insurance premium subsidies system

Government subsidy is the hand of god to break the agricultural insurance embarrassment, eliminate interaction obstacles and restore the normal interaction functioning. In recent years, the Chinese government subsidies increased agricultural insurance year by year. But the subsidy efficiency is still low. It is urgent to make policy adjustments, optimize the subsidy path, pay attention to the regional difference, distinct different insurance categories and determine a reasonable subsidy rate. Firstly, optimize the insurance amount and policy determined by the amount of subsidies. Secondly, enrich the variety of subsidies and implement differentiated subsidies. Thirdly, give subsidies or tax preferences for companies engaged in the business of agriculture insurance and reinsurance.

5.5.4 Establish agricultural risk dispersion system

The insurance management conditions in America and other countries in recent years have showed that: Although loss ratio is more than 100% in most years, many insurance companies can survive and develop and the main reason is that a large number of investment income made up for the main business losses. Insurance

financial trend makes the insurance industry change form guarantee agencies into the non-bank financial institutions which not only have the security function but also have the important function of financing. This opens up a new world for purely traditional agricultural insurance company. High correlation and the concentration of time and space of agricultural risk make traditional agriculture insurance companies suffer huge losses in a short period of time if the catastrophe event happens. With the development of the capital market and perfection of market supervision, conditions that are to explore the capital market with two functions including financing and risk dispersion in the China gradually mature. The development of agricultural insurance company mixed operation business can amplify the agricultural insurance risks dispersion function and its profit function. At present, risk securitization products like catastrophe bonds, catastrophe options, catastrophe futures and strain capital have emerged in international capital market. Especially, the catastrophe bond has been widely applied in earthquake, hurricane and so on. China also should actively carry out the catastrophe risk securitization pilot, and accelerate the securitization of insurance fund investment through promoting multiple levels of agricultural catastrophe risk fund products. This is China's strategic move to defend agricultural catastrophe caused by preventing a devastating impact on agricultural insurance system.