Event:
In February 22nd, the CPC Central Committee and the State Council made the recommendations on the key work of Promoting Rural Revitalization in 2022, that is, the No. 1 central document issued in 2022.
Brief comment:
In February 22nd, the CPC Central Committee and the State Council made the recommendations on the key work of Promoting Rural Revitalization in 2022, that is, the No. 1 central document issued in 2022. This is the No. 1 Central Document No. nineteenth since twenty-first Century guiding the work of agriculture, rural areas and farmers. The document is divided into eight parts, including:
We will make every effort to do a good job in grain production and important Shenzhen Agricultural Products Group Co.Ltd(000061) supply, strengthen the basic support of modern agriculture, firmly hold the bottom line of not returning to poverty on a large scale, focus on industries to promote rural development, solidly and steadily promote rural construction, highlight practical results, improve rural governance, strengthen policy guarantee and institutional mechanism innovation, and adhere to and strengthen the party’s overall leadership over the work of “agriculture, rural areas and farmers”.
We interpret the key contents:
1. Ensure that the sown area of grain is stable and the output remains above 1.3 trillion kg.
Stabilize the sown area and output of grain throughout the year. The Chinese people’s rice bowl should always be firmly in their own hands. The rice bowl is mainly filled with Chinese grain. We should fully implement the same responsibility of the party and government for food security, and strictly assess the responsibility system for food security, so as to ensure that the sown area of grain is stable and the output is maintained at more than 1.3 trillion kg.
Interpretation: in 2021, China’s total grain output reached 1365.7 billion kg, an increase of 26.7 billion kg over the previous year, and remained stable at more than 1.3 trillion kg for seven consecutive years. Food security concerns people’s livelihood. At present, China’s food security is facing a more severe situation. At the macroeconomic level, affected by the global quantitative easing monetary policy, the sharp rise in global food prices interferes with the stability of China’s food prices; Extreme weather, diseases and insect pests also have an impact on the stability of China’s grain output. Therefore, strictly adhering to the red line of 1.8 billion mu of cultivated land and stabilizing grain sowing area and output will be the key conditions for stabilizing the basic agricultural market. Specifically, ① stable yield: the main production areas continuously improve the comprehensive grain production capacity, the main sales areas effectively stabilize and improve the grain self-sufficiency rate, and the production and marketing balance areas ensure the basic grain self-sufficiency; ② Protect cultivated land: decompose the amount of cultivated land and permanent basic farmland protection objectives and tasks level by level in full and with location, take cultivated land protection as a rigid index, implement strict assessment, one vote veto and lifelong accountability, and ensure that 1.8 billion mu of cultivated land is worthy of its name.
2. Vigorously implement the soybean and oil production capacity improvement project.
Vigorously implement the soybean and oil production capacity improvement project. We will increase subsidies for farmland rotation and incentives for large oil producing counties, focus on supporting appropriate regions, key varieties and business service subjects, promote belt composite planting of corn and soybean in the Huang Huai Hai, northwest and southwest regions, carry out grain and bean rotation in the northeast region, and promote the pilot of water to drought and rice to beans in some underground water overexploitation areas and well irrigated rice areas in cold areas in Heilongjiang Province, Develop winter fallow fields and expand rape planting in the Yangtze River Basin. Carry out demonstration of soybean planting in saline alkali land. Support the expansion of Camellia oleifera planting area and the transformation and upgrading of low yield forests.
Interpretation: in recent years, with the improvement of Chinese people’s living standards and the rapid development of breeding industry, the demand for soybean oil and soybean meal has increased significantly. However, due to the low per unit yield of soybean in China, the supply gap of soybean in China continues. In 2020, the sown area of soybean in China was 148 million mu, the output was 19.6 million tons, and the external dependence of soybean exceeded 80%; In 2020, the planting area of oil crops (excluding soybeans) in China will be 197 million mu, with an output of 35.86 million tons, with a large gap between production and demand. In addition, the shortage of feed protein products such as soybean meal and rapeseed meal is also one of the weaknesses of China’s Shenzhen Agricultural Products Group Co.Ltd(000061) supply. Because the supply of feed protein directly affects the breeding cost, and then affects the supply of meat protein in the “vegetable basket” of Chinese residents, the vigorous implementation of the soybean and oil production improvement project will better solve the problem of feed protein shortage in China, This will help to stabilize the supply of meat protein. At this stage, relevant state departments have decided to start policy soybean auction to increase the supply of soybean and edible oil market. By adjusting the crop planting structure in various regions and increasing the sowing area, the long-standing imbalance between production and demand of soybeans and Oilseeds in China will be effectively solved. Specifically, Heilongjiang will strive to increase soybean planting by 10 million mu in 2022, with a total sown area expected to reach 68.5 million mu, Inner Mongolia will expand soybean planting by 4.3 million mu, and Huanghuaihai, southwest and northwest regions will also expand sown area to improve soybean self-sufficiency rate; The national planting industry development plan of the 14th five year plan mentions that by 2025, the sown area of soybean will strive to reach 160 million mu and the output will be 23 million tons; The sown area of oil crops has reached more than 220 million mu, including 120 million mu of rape, 75 million mu of peanut, Zhejiang Sunflower Great Health Limited Liability Company(300111) and 25 million mu of characteristic oil. In addition, actively promoting the commercial application of genetically modified soybeans is also one of the effective means to improve the unit yield of crops. At present, three soybean transformants in China have been approved with gene safety certificates. The promotion of genetically modified varieties can play an important role in ensuring national food security.
3. Ensure the supply of “vegetable basket” products and stabilize the long-term support policies for pig production.
We will intensify efforts to implement the mayor responsibility system of “vegetable basket”. Stabilize the long-term support policies for pig production, stabilize the basic production capacity and prevent the ups and downs of production. Accelerate the expansion of beef, mutton and dairy production, and promote the pilot demonstration of the transformation and upgrading of grassland animal husbandry. Stabilize the area of aquaculture and improve the quality of fishery development. Stabilize the perennial vegetable land ownership in large and medium-sized cities, vigorously promote the construction of vegetable facilities in the north and vegetable transportation bases from the south to the north, and improve the emergency supply capacity of vegetables. Improve the cotton target price policy. Explore the development of sugar cane full cost insurance and planting income insurance. Carry out pilot projects to renovate old natural rubber plantations.
Effectively prevent and respond to major agricultural disasters. Strengthen the construction of grass-roots animal and plant disease prevention and control system, implement territorial responsibilities, allocate complete and strong professionals, and assign responsibilities, posts and personnel to ensure that the responsibility for the prevention and control of major animal and plant diseases such as African classical swine fever and Spodoptera graminearum is taken care of by people. Be a good person and prevent and control the source of zoonosis.
Interpretation: pork is the main meat consumed by Chinese residents, and the stability of pig price has a significant impact on the stability of the “vegetable basket”. At present, China’s pig market has the problems of low scale breeding and large fluctuation of pig supply, resulting in sharp fluctuation of pig price. Therefore, it is very important to stabilize pig production. The document adjusted the goal of “protecting the basic production capacity of pigs” to “stabilizing the basic production capacity of pigs”, and proposed for the first time to prevent the ups and downs of production. According to relevant policy requirements, during the “14th five year plan” period, with reference to the national production data of 55 million tons of pork in normal years, the regulation target of breeding sows’ stock is set, that is, the normal stock of breeding sows is stable at about 41 million, the minimum stock is no less than 37 million, and the stock of breeding sows is kept fluctuating within a reasonable range. For example, Henan and Sichuan ensure that the number of fertile sows is stable at about 4 million; The number of fertile sows in Guangdong is maintained at about 1.9 million; Shanghai takes 90% of the normal stock of fertile sows as the standard to determine the minimum stock. The document encourages the development of new breeding facilities such as industrialized intensive breeding and three-dimensional ecological breeding to standardize the development of China’s pig breeding industry. Correspondingly, all localities also need to regulate the large-scale breeding capacity and stabilize the stock of large-scale pig farms. At present, large-scale farms (households) with an annual output of more than 500 pigs will be included in the national pig farm system for the record, All localities should maintain the overall stability of the number of large-scale pig farms (households) to ensure the overall stability of pig production capacity. The document once again brings African classical swine fever into the scope of key prevention and control, which can continuously promote China to carry out basic research on the prevention and control of African classical swine fever and other diseases, and improve the degree of breeding norms.
The subsequent introduction of a number of detailed policies will gradually fill the policy gap in China’s pig production and have a positive impact on stabilizing pig production and promoting the sustainable and healthy development of pig industry.
4. Strictly control the processing of fuel ethanol with corn as raw material.
Make overall plans for important Shenzhen Agricultural Products Group Co.Ltd(000061) regulation. Improve the Shenzhen Agricultural Products Group Co.Ltd(000061) whole industry chain monitoring and early warning system, promote the establishment of a unified Shenzhen Agricultural Products Group Co.Ltd(000061) supply and demand information release system, and strengthen regulation and emergency support by classification and variety. We will deepen the reform of the regulatory system and mechanism in the field of grain purchase and sale, carry out special rectification, and strictly punish systematic corruption in accordance with the law. Strengthen the construction of intelligent grain depots, promote the combination of civil air defense and technical defense, and strengthen the dynamic supervision of grain inventories. Strictly control the processing of fuel ethanol with corn as raw material. We will do a good job in the allocation and transportation of production reserves of agricultural materials such as chemical fertilizers, and promote the guarantee of supply and stable price. We will give priority to conservation, implement the action plan for food conservation, further promote the whole chain of production, transportation, storage and consumption, save grain and reduce losses, strengthen food security education, and oppose food waste.
Interpretation: after the African swine plague, China’s pig production capacity has recovered rapidly, and the consumption of feed corn has increased rapidly. At the same time, the consumption of processed corn has increased, resulting in the expansion of China’s corn production and demand gap, the relationship between supply and demand has shifted from oversupply to supply-demand balance, and the corn price has also been at a high level in recent years. In this case, strictly controlling the processing of fuel ethanol with corn as raw material and giving priority to meeting the consumption demand of forage corn can effectively alleviate the adverse impact of high feed price on livestock and poultry breeding, so as to ensure the stability of residents’ consumption of “vegetable basket”.
5. Vigorously promote key agricultural core technologies such as seed sources.
We will fully implement the action plan for the revitalization of the seed industry. We will accelerate the general survey and collection of agricultural germplasm resources and strengthen accurate identification and evaluation. Promote the construction of national major innovation platforms in the field of seed industry. Start major projects of agricultural biological breeding. We will accelerate the implementation of key agricultural core technology research projects, implement systems such as “showing leadership” and “ministry provincial linkage”, and carry out pilot long-term R & D projects. Strengthen the construction of modern agricultural industrial technology system. Carry out the pilot of subsidy after R & D and promotion of major varieties. We will implement the seed law, implement the system of substantive derived varieties, strengthen the protection of intellectual property rights in the seed industry, and severely crack down on illegal and criminal acts such as trademark infringement in accordance with the law.
Interpretation: seed industry is the “chip” of agriculture and a national strategic and basic core industry. High quality seed sources can not only solve the shortage of many crop raw materials in China, but also affect the overall situation of food security. In recent years, the state has issued a number of policies focusing on the “revitalization of seed industry”. The new seed law is about to be implemented. Four regulations, including the administrative measures for the safety evaluation of agricultural genetically modified organisms, the measures for the examination and approval of major crop varieties, the administrative measures for the production and operation license of crop seeds, and the provisions on the naming of agricultural plant varieties, have been revised to expand the content to the category of transgenic. The seed industry policy focuses on the protection and utilization of germplasm resources, promoting innovation and tackling key problems in the seed industry, supporting the development of high-quality seed enterprises, and improving the construction level of seed industry base. The continuous introduction of the above policies will help China accelerate the breakthrough of the “neck” technical difficulties of the seed industry, realize the self-reliance and self-improvement of the seed industry in science and technology and the independent control of seed sources. It will also accelerate the industrial application of China’s biological breeding technology and provide a road map for the turnaround of the seed industry.
6. Investment suggestions
Combined with the main points of this year’s No. 1 central document, we comb out 4 main lines of investment.
(1) pig breeding: focus on Wens Foodstuff Group Co.Ltd(300498) , Muyuan Foods Co.Ltd(002714) , and pay attention to Fujian Aonong Biological Technology Group Incorporation Limited(603363) , New Hope Liuhe Co.Ltd(000876) , Tecon Biology Co.Ltd(002100) .
(2) poultry industry chain: white feather broiler industry chain leader Fujian Sunner Development Co.Ltd(002299) and yellow feather broiler targets Jiangsu Lihua Animal Husbandry Co.Ltd(300761) and Hunan Xiangjia Animal Husbandry Company Limited(002982) are recommended.
(3) seed industry: recommend high-quality leading enterprises, such as Yuan Longping High-Tech Agriculture Co.Ltd(000998) , Beijing Dabeinong Technology Group Co.Ltd(002385) , Shandong Denghai Seeds Co.Ltd(002041) , Winall Hi-Tech Seed Co.Ltd(300087) .
(4) high quality agricultural leaders: recommended Guangdong Haid Group Co.Limited(002311) , Tianjin Ringpu Bio-Technology Co.Ltd(300119) , Jinyu Bio-Technology Co.Ltd(600201) , Pulike Biological Engineering Inc(603566) , Wuhan Keqian Biology Co.Ltd(688526) .
Risk tips: covid-19 epidemic has the risk of impact on demand, Shenzhen Agricultural Products Group Co.Ltd(000061) price fluctuation risk, extreme weather risk, epidemic risk of breeding industry, etc.
