Research on the Organizational Model of the Whole Agricultural

Industry Chain under the Background of Rural Revitalization

Muqi Yuan, Ying Zhu, Siqi Rao, Huizhong Yang and Bingbing Li

Business School of Hunan Normal University, Juzizhou street, Yuelu District, Changsha, Hunan, China

Keywords: Rural Revitalization, The Entire Agricultural Industry Chain, Organizational Model, Model Innovation.

Abstract: Industrial prosperity is an important foundation for rural revitalization. In recent years, the entire agricultural

industry chain has become an important part of my country's modern agriculture. This paper selects pilot areas

of the entire agricultural industry chain with different organizational models as the research objects, and

conducts in-depth interviews and questionnaire surveys with relevant government departments, enterprises

and farmers in various regions. Summarizing the existing problems of the current agricultural industry chain

organization model, and discovering five innovative organization models in the existing industry chain. Based

on this, this article puts forward countermeasures and suggestions for extending the agricultural industry

chain, such as increasing policy support, regularly training farmers, and strengthening the integration of

industrial chain resources.

1 INTRODUCTION

Agricultural development is an important pillar of

rural revitalization, and the entire agricultural

industry chain is the trend of future agricultural

development. Therefore, this article aims to explore

the financial linkage issues in the entire agricultural

industry chain, such as government financing

support, financing needs of enterprises and farmers,

and existing financing and lending methods, and

summarize the current typical models of financial

linkages in the entire agricultural industry chain and

their shortcomings. Relying on this optimization of

financial allocation as the goal, relevant policy

recommendations are put forward based on the

characteristics of the financial linkage of the entire

agricultural industry chain in my country at this stage.

2 RISE BACKGROUND AND

DEVELOPMENT STATUS

2.1 The Background of the Rise of the

Entire Agricultural Industry Chain

At present, the No. 1 document issued by the central

government in 2021 clearly states the entire

agricultural industry chain, which proposed now is a

further innovation in agricultural development and a

new agricultural model proposed in the context of

upgrading the agricultural industrial structure and

improving the quality and quantity of agricultural

products in my country. It conforms to the

development of the social agricultural economy,

meets the needs of upgrading the consumption

structure, and at the same time plays an important role

in exploring the value of multiple functions of

agriculture. Increasing the integration strength of the

industrial chain and adding value to agricultural

products can effectively promote agricultural

efficiency and farmers' income, and can effectively

make up for the shortcomings of China's traditional

agricultural development methods. This is an

inevitable choice for contemporary Chinese

agricultural development. Based on national

conditions, give play to the value of all aspects of

agriculture, improve the level of agriculture, and

build a new pattern for the development of the entire

agricultural industry chain. These are also strong

supports for revitalizing the modernization of rural

industries.

Han Xiyan et al. (Han, Gao, Liu, 2019) used

economic models to analyze the mechanism of the

agricultural industry chain model to promote the

circulation of agricultural products from a theoretical

level. They found that the profit under the circulation

Yuan, M., Zhu, Y., Rao, S., Yang, H. and Li, B.

Research on the Organizational Model of the Whole Agricultural Industry Chain under the Background of Rural Revitalization.

DOI: 10.5220/0011170900003440

In Proceedings of the International Conference on Big Data Economy and Digital Management (BDEDM 2022), pages 199-203

ISBN: 978-989-758-593-7

199

model of the whole industry chain is higher than the

profit under the traditional circulation model. The

agricultural product circulation model of the whole

industry chain can not only improve the efficiency of

agricultural product circulation, but also improve the

interests of the participants in the agricultural product

circulation and the welfare of consumers. With the

popularization of modern technology, the "Internet +"

model of the entire agricultural industry chain has

attracted attention. Guofa (The State Council, 2019)

No. 12 proposed to accelerate the construction of the

entire industry chain and the entire value chain.

Subsequently, the "Digital Agriculture and Rural

Development Plan (Ministry of Agriculture and Rural

Affairs 2019-2025)" proposed to accelerate the

construction of big data in the entire agricultural

industry chain. Since then, various departments have

actively responded to the "Guiding Opinions of the

Ministry of Agriculture and Rural Affairs on

Accelerating the Cultivation and Development of the

Whole Agricultural Industry Chain" (Ministry of

Agriculture and Rural Affairs 2019-2025), clarifying

the concept of the entire agricultural industry chain.

So far, the entire agricultural industry chain not only

has many advantages in theory, but also has the

inevitability of development in policy.

2.2 Classification of the Organization

Model of the Entire Agricultural

Industry Chain and the

Development of Each Type

2.2.1 Classification of Existing

Organizational Models

Based on Wu Fengchao's Research on the Whole

Industrial Chain Strategy of Chinese Agricultural

Enterprises (Wu 2014), the classification of industrial

chain organizations is divided according to different

industrial chain promoters (core enterprises). Mainly

divided into four types.

1.Leading enterprise-driven. Its promoters are

"leading enterprises" whose main industries are

agricultural product processing, logistics, and

commerce. Its basic structure is "company + farmer"

and "company + base + farmer".

2.Intermediary organization. Its promoters are

cooperative economic organizations. Agricultural

cooperative economic organizations (also known as

agricultural cooperatives) are an organization model

in which farmers voluntarily join and engage in

agricultural economic activities through joint

operations through the principles of mutual assistance

and democratic management.

3.Professional market-driven. Its promoters are

various regional agricultural product markets

engaged in the distribution of agricultural products,

especially professional wholesale markets. Its basic

structure is "professional market + base + farmers".

Farmers can directly face the market for production,

which is conducive to driving the development of the

local regional agricultural economy in the direction

of scale and specialization.

4.Other types. Other types of industrial chain

organizations mainly cover the agricultural industrial

chain organization model that is formed by

agricultural comprehensive enterprises, agricultural

services at all levels, scientific research and education

and other institutions as the core to provide farmers

with socialized services.

2.2.2 Various Types of Problems

This study selects the first three types of enterprises

in the entire industry chain with the largest market

share to conduct research on financing mechanisms

through on-site investigations, online and offline

interviews, and questionnaires. Several problems

were also found in the interviews with the first three

types of enterprises in the entire industry chain that

accounted for the largest proportion.

① There is a shortage of labor, and the surplus

labor has a low level of education. At the same time

as cities are developing rapidly, many young and

middle-aged people in rural areas generally enter

cities to work. The loss of rural labor force leaves the

labor force with weak learning ability and cannot

meet the required standards for production.

② The land utilization rate is low, and the

demand for professional households is vacant. Due to

the shortage of young labor, land management rights

cannot be effectively used. At the same time, the

needs of large professional households to expand the

planting area and professionally grow agricultural

products cannot be met. In response to this problem,

such as Guangxing Town, lease land management

rights to major professional households, rural surplus

labor is hired, and the needs of professional

households are also met, in order to achieve the best

of both worlds, but there are few good results.

③ Lack of risk prevention awareness and ability

of major professional households, and lack of

insurance models such as compensation for

agricultural losses caused by natural risks in the local

area. Agricultural production is very threatened by

natural disasters and the losses are heavy.

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④ The land use is not scaled up, and it is still a

small-scale peasant economy, which seriously

hinders China's agricultural modernization.

⑤ Agricultural enterprises have a single source

of funds, making financing difficult and not stable.

⑥ The level of agricultural machinery is low,

and labor costs are high. Agricultural mechanization

is low, requires a lot of labor, financing is not easy,

and funds are limited, and it is difficult to support

expensive labor costs.

2.3 Overview of the Innovative

Organization Model

According to the actual research situation, we have

discovered five new organizational models.

1.Rent farmer’s land for base planting. Uniformly

rent farmer’s fields to realize large-scale planting in

the base, and hire farmers as planters to pay fixed

wages.

2.Cooperate with farmers according to the

production schedule. The company formulates a

production schedule every year, negotiates with the

local cooperative about the amount of supply it can

provide, and then signs a purchase and sale contract

with the cooperative.

3.Sale of goods on mortgage. The farmers

mortgage the goods to the enterprise, and the

enterprise gives a certain purchase price and guide

price to drive sales. At the same time, the enterprise

mainly inspects the output of farmers,

comprehensively considering their basic qualities and

cultural literacy. Invite a small number of large

agricultural households to invest in shares with a

small amount of capital to ensure smooth and

accurate information between farmers and

enterprises. In this way, it is convenient to

comprehensively consider the situation and interests

of farmers to determine the purchase price.

4.Regular acquisitions at low prices. The farmers

mortgage the goods to the enterprise, and the

enterprise gives a certain purchase price and guide

price to drive sales. At the same time, the enterprise

mainly inspects the output of farmers,

comprehensively considering their basic qualities and

cultural literacy. Invite a small number of large

agricultural households to invest in shares with a

small amount of capital to ensure smooth and

accurate information between farmers and

enterprises. In this way, it is convenient to

comprehensively consider the situation and interests

of farmers to determine the purchase price.

5."Company + Farmers" Substitute Raising. The

company signs the "Entrusted Breeding Contract"

with the surrogate households. According to the

contract, the company is responsible for providing

inputs such as swine seedlings, feed, vaccines, and

medicines to the surrogate farmers. In accordance

with the contract, the pigs will be recycled. At the

same time, the company will pay the maintenance

fees to the surrogate households in accordance with

the contract.

2.4 Other Circumstances

2.4.1 Leading Enterprises and Agricultural

Cooperatives are the Main Ways for

Agricultural Entities to Join the Entire

Industrial Chain

The survey found that nearly half of agricultural

entities participate in the entire industry chain by

directly signing contracts with leading enterprises.

21.13% joined agricultural cooperatives, 14.08%

signed contracts with professional wholesale markets

or purchasers, and 16.9% joined the entire industry

chain through self-operated companies. For most

agricultural business entities, leading enterprises and

local cooperatives still have a higher reputation. It can

be seen that in the future, to further promote the entire

agricultural industry chain, we can start with leading

enterprises and local cooperatives.

2.4.2 Financing Advantages of Enterprises

Across the Industry Chain

Qualified leading enterprises can enjoy government

discount loans for agricultural industrialization

operations. According to the principle of

territoriality,

the project shall be declared to the county-level

branch of the local Agricultural Development Bank

and the county (city) agricultural development

agency. The interest subsidy adopts "one-time

approval and annual interest discount". Determine the

loan period and discount period according to the

project construction period and the company's ability

to repay.

2.4.3 Government Support for Enterprises

Across the Industry Chain

Apply for government agricultural support funds, and

submit materials such as budgets for infrastructure

(roads, field operations, water pipes, soil

improvement, etc.) that need subsidies. After the

evaluation and inspection, the successful audit can

get a 1:1 funding subsidy. Companies need to spend

the same amount of money for other improvements;

Research on the Organizational Model of the Whole Agricultural Industry Chain under the Background of Rural Revitalization

201

Apply to the government for material subsidies, and

the government will distribute them according to the

results of the examination and approval after unified

purchase; Apply to the government for organic

fertilizer subsidies and submit a budget list. After the

experts approve, the government will subsidize them

later; Operators of agricultural industrialization can

enjoy the government discount loan policy; The

government set up a platform to encourage

enterprises and universities to establish production-

education-research bases; The government selects,

breeds and provides seedlings for the planting base.

3 CONCLUSIONS AND

RECOMMENDATIONS

This paper conducts in-depth interviews and

questionnaire surveys with relevant government

departments, enterprises and farmers in pilot areas of

the entire agricultural industry chain with different

organizational models. Discovered five innovative

organizational models in the existing industrial chain,

ways for farmers to join the entire industrial chain,

and policy preferences for enterprises throughout the

industrial chain. Based on this, this article puts

forward countermeasures and suggestions for

extending the agricultural industry chain, such as

increasing policy support, regularly training farmers,

and strengthening the integration of industrial chain

resources.

3.1 Increase Policy Support

Government investment can not only bring capital to

a region, but also technology, products, markets, and

management methods. At the same time, industrial

chain investment is easy to form industrial chain

clusters, optimize configuration, reduce operating

costs, and improve efficiency. Local governments

sign investment cooperation contracts with external

companies, and they should actively assist companies

in applying for projects to relevant higher-level

departments and strive for special funding support.

Assist in handling project-related administrative

permits, simplify procedures, and implement

preferential subsidies for all links of the industrial

chain. At the same time, the government can

coordinate with relevant financial institutions to help

promote poverty alleviation industry financial

products, and escort the financing of all participants

in the entire industry chain.

3.2 Strengthen Communication and

Regularly Train Farmers

The government can regularly go to the grassroots

level to understand the needs and problems of farmers,

and guide farmers to the entire agricultural industry

chain. Starting with leading enterprises and local

cooperatives, we will further promote the entire

agricultural industry chain, and help farmers

understand the relative advantages of the industry

chain system and the necessary conditions to take

advantage of this advantage.

3.3 Strengthen the Integration of

Industrial Chain Resources

The scale effect of agricultural production has not

been brought into play, the major agricultural

households are not professional enough, the level of

mechanization is low, and the risk awareness is weak,

which led that China's agriculture is at the initial stage

of the development of the industry chain. Under this

circumstance, leading agricultural enterprises with a

certain degree of operational strength are conducive

to leading the integration of the agricultural industry

chain, and at the same time conducive to the larger

and stronger agricultural enterprises themselves.

At the same time, different industrial chains

should be suitable for different organizational models

in different situations. According to local

characteristics, actual conditions, and the

characteristics of their own products, they should

decide what organizational model to achieve the

integration of the entire industrial chain.

FUND PROJECTS

National Students’ Platform for Innovation and

Entrepreneurship Training Program

(202110542010).

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