The issue of agriculture, rural areas, and farmers is the most prominent and urgent issue in the current development process, and it is also the most difficult to solve. The central government has prioritized the issues of agriculture, rural areas, and farmers, and the first document of each year also takes solving these issues as the government's opening work. However, the issue of imbalanced and insufficient development in China is still most prominent in rural areas. How to repay the debts owed to agriculture, rural areas, and farmers as soon as possible has become the focus of the Party and the country's greatest concern.

On April 3rd, the Ministry of Agriculture and Rural Affairs officially launched its listing. Based on the overall research and implementation of the "three rural" work strategy, planning and policies, the Ministry has expanded the rural management functions previously under the jurisdiction of the National Development and Reform Commission, the Ministry of Finance, the Ministry of Land and Resources, and the Ministry of Water Resources on the basis of the Ministry of Agriculture. This has improved the efficiency of agricultural fund utilization, achieved the overall utilization of rural land resources, and highlighted the goal of prioritizing and accelerating the development of the "three rural" construction, It also makes the management of the agricultural industry chain more unified.

However, freezing three feet cannot be achieved in a single day, and the causes of the "three rural" issues should be clearly understood in order to carry out targeted cracking.

During the planned economy period, in order to participate in global competition and accelerate the construction of urban industrialization, the government used administrative means to forcibly promote the dual structure of urban and rural areas, namely the unified purchase and sale of grain, the scissors difference between industrial and agricultural products, and the household registration migration system that strictly restricts the flow of rural population to cities. In addition, in infrastructure, science, education, culture, and health, the government implemented a differentiated welfare system, investment mechanism, and governance mechanism between urban and rural areas, Causing a significant urban-rural gap.

After the reform and opening up, although the starting point of the reform was the household contract responsibility system, the country was also continuously implementing a series of policy measures to promote the coordinated development of urban and rural economy. However, because the registered residence management, labor employment and social welfare system implemented during the planned economy period are still inherited on the whole, in the tide of market economy, economic interests further drive the transfer and aggregation of various resource endowments of the whole society from rural areas to cities, it is difficult to form an organic link between the production, processing and circulation of agricultural products, and it is more difficult for farmers to share the value-added gains such as the processing and circulation of agricultural products. Rural land, currency, capital The high market value-added benefits such as circulation and trade have not yet formed, and the urban-rural gap is widening, and the contradiction in the urban-rural dual economic structure is becoming stronger.

Nowadays, the institutional mechanisms that led to the contradiction in the urban-rural dual economic structure have not been completely eliminated, and it is difficult to achieve the goal of eliminating the contradiction in the urban-rural dual economic structure solely through the expansion of agricultural management functions. The solution to the "three rural" problems needs to be explored in a new way.

On October 5, 2017, the General Office of the State Council issued the Guiding Opinions on Actively Promoting Supply Chain Innovation and Application. The first key task is to "promote the integrated development of rural primary, secondary, and tertiary industries", proposing to start from three aspects: innovating the agricultural industry organization system, improving the scientific level of agricultural production, and quality and safety traceability ability. Promoting supply chain innovation and application as a national strategy provides the possibility of establishing a smart agricultural supply chain system suitable for the current institutional mechanisms.

The inability to transfer land has made it difficult for agriculture to achieve scale, as well as the industrialization and automation derived from scale, resulting in the domestic agricultural economy still being in a nearly perfect competitive market of agricultural civilization. That is, the marginal profit operating according to the long-term production function is zero, and the price is equal to the marginal cost model. Farmers can only earn all the benefits of their labor except for the cost of labor means of production.

Even more severe is that China's agricultural economy is already in the midst of global market competition. Four oligopolistic grain merchants who control global grain transportation and sales control over 80% of global grain trading volume, including the American ADM (Archer Daniels Midland), the American Bunge (Bunge), the American Cargill (Cargill), and the French Louis Dreyfus (Louis Dreyfus). In the recent trade dispute between China and the United States, US soybeans and cotton were first proposed as the optimal items in China's counter list. In 2017, the United States exported 32.854 million tons of soybeans to China, accounting for 34.39% of China's total imports and 62% of all US soybean exports. Even though China can find alternative soybean supplies in Brazil and Argentina, its seeds still come from the United States, and the oligopoly market structure has not changed.

When the Chinese agricultural market is fully liberalized, it can be imagined what the competition between internal and external market organizational structures, which is severely asymmetric, means for Chinese agriculture. Therefore, in guiding the integrated development of the primary, secondary, and tertiary industries in rural areas, innovative agricultural industry organizational systems should be prioritized, and various rural organizations should be encouraged to cooperate to establish an agricultural supply chain system that integrates agricultural product production, processing, circulation, and services. Modern agriculture that integrates planting, breeding, processing, production, supply, and sales, and domestic and foreign trade should be developed; Encourage contracted farmers to integrate into the agricultural supply chain system through land transfer, stock cooperation, and agricultural production trusteeship.

The direction of these strategic changes is undoubtedly correct, but it requires a long cycle of change and more importantly, the cooperation of the external environment. The fastest and most effective agricultural supply chain innovation relies on China's more advantageous upgraded consumer market, as well as the intervention of rapidly developing technological resources such as the Internet, the Internet of Things, and artificial intelligence.

In the process of leaping from agricultural and industrial civilization to information civilization, the most typical feature of the Internet era is that it can accurately and efficiently connect the most individualized demand and supply, and can achieve low-cost link transfer from "face-to-face" to "point-to-point". In this way, even if agriculture cannot achieve scale, industrialization, and automation, it is still possible to rely on effective integration with information technology and financial resources to directly achieve a smart agricultural supply chain.

The Chinese economy has transitioned from the traditional "investment, consumption, and export" troika driven model to a consumption led "consumption upgrading, innovation, and new investment" new troika. From 2015 to 2017, the contribution rates of consumer spending to GDP were 66.4%, 64.5%, and 58.8%, respectively, far ahead of other factors.

At the same time, with the support of the Internet and information technology, the consumption characteristics of the market have also undergone significant changes. Customization, immediacy, convenience, and active participation have become the four most critical factors in market competition. The consumer market has also expanded to luxury and low-priced products, and the market size of high-end agricultural products and accompanying leisure agriculture has also shown a rapid growth trend. The land, currency, and High value-added links such as capital, processing, circulation, and trade can also be directly integrated into various rural organizational structures through the smart supply chain system.

The "three rural areas" also have rich and new labor dividends. It should be noted that the successful elements of reform and opening up, in addition to the "three carriages" and integration into the global industrial chain, should also be attributed to the labor dividend of migrant workers entering cities. Even the fastest growing express logistics and delivery home accessories currently rely heavily on the labor dividends of the delivery and delivery guys.

As the economy enters a new normal, it becomes increasingly difficult for the real economy to gain the favor of capital. Coupled with consumption upgrading, the markets closest to the consumer and resource ends have more potential to gather various resource endowments, including capital. With the technological support of the Internet, the Internet of Things, and artificial intelligence, the agricultural smart supply chain driven by high-end agricultural product consumption has strong development momentum. The best example of how hairy crabs replaced mooncakes on the dining table of ordinary people during the 2017 National Day and Mid Autumn Festival is the complete cross-border integration of farmers, e-commerce, and express delivery enterprises as one business entity.

At present, rural areas and farmers still do not have the ability to actively participate in the agricultural smart supply chain system. This requires starting from the consumer side, and starting from the operation entities of the circulation link to initiate and connect the production, processing, circulation, and service of agricultural products, forming a reverse pull network of the agricultural supply chain. With the support and incentives of national policies, further attracting capital, information, management, technology, and various resource endowments, Drive and guide the optimization of resource allocation throughout the entire agricultural industry chain, transform agricultural production into consumption oriented, and build a brand new integration relationship between primary, secondary, and tertiary industries.

The best way to solve the problems of agriculture, rural areas, and farmers is through a smart agricultural supply chain driven by consumption, guided by the situation and taking advantage of it.

Author: Liu Dacheng, Vice President of the Internet Industry Research Institute and Director of the Logistics Industry Research Center at Tsinghua University, Doctoral Supervisor of the Department of Industrial Engineering, Executive Vice Chairman of the Railway Journal, Executive Vice Chairman and Chairman of the Expert Committee of the Dangerous Goods Professional Committee of the China Transportation Association, and Chairman of the Digital Agriculture Committee of the China Association of Agricultural Products Circulation Brokers, Vice Chairman and Chairman of the Smart Supply Chain Special Committee of the Beijing Alliance for Integrated Services of Two Modernizations, and Chief Expert of the Logistics Weekly of Xinhua Economic Reference News Agency.