Land Reforms Needed for Digital Agriculture

Land dispersion is hindering the development of digital agriculture in China. In fact, it may be the most fundamental reason, because land is the foundation of farming and is critical for the farmers’ livelihood. Land also determines whether the rapidly-developing technology can be applied and popularized in the farming process.

China has 1.8bn mu of arable land. But it is mainly distributed among small-scale farmers. According to data from the third agricultural census, there are 230m farmers, with an average cultivated land area of 7.8 mu — 210m of these farmers have less than 10 mu of cultivated land. Scattered land cannot be connected, making digitized agricultural facilities and data collection difficult. With the acceleration of urbanization, and more and more farmers moving to cities, the current household small farming system means many farmers are out of step with modern agricultural development. This not only reduces production efficiency, but also blocks effective connection to the agricultural industry chain, and inhibits the potential increase in agricultural income.

The government has now explicitly extended land contract periods for another 30 years, in order to stabilize the land contract relationship and give farmers the confidence to plant. At the same time, the government also promotes the separation of rural land ownership, contract rights, and management rights, to ensure the stability of contract rights for rural households and management flexibility. This initiative allows the land to be fully used, rather than be abandoned because there is no farmer. It also creates opportunities for applying digital agricultural facilities.

However, the scale of agricultural production is not determined just by people’s wishes. Land scale is closely related to a country’s population, land resources, industrialization level and urbanization. It is impossible for China to concentrate land as it is done in the US or Brazil — what would the landless farmers do for a living? If farmers lose land, and move to the cities, urban economic development and resources cannot bear the pressure of a rising population.

Land intensification provides the basis for further development of digital agriculture. But agriculture modernization cannot be achieved simply by relying on scaled land. Increasing land area is a necessary, but not sufficient, condition for agricultural modernization. The external environment is important, but the future depends on business model innovation and restructuring. China can work with both existing large farms and smaller farmers to develop technology and business models according to the different land scales.

Direct cooperation with large farmers. Increasing land transfer is also leading to an increasing number of new farmers. Farms will gradually transform into larger farms, agricultural cooperatives and agriculture-related enterprises. The land of these larger farmers is connected (to a relatively high degree) and personnel quality is also high, providing a good starting point for making digital agriculture more popular.

Serve small and medium-sized farmers via commercialized agricultural services platforms. As mentioned before, small and medium-sized farmers are still the mainstay in China. Commercialized agricultural services are emerging. Delegated land administration attracts small and medium-sized farmers to entrust their land to a platform first. Then they can apply advanced technology to these linked lands, thus improving production efficiency. Digital farming companies can leverage these platforms to provide holistic solutions, rather than relying solely on technology or hardware to make money. Using the delegated land administration platform, smart agricultural companies are extending from pure technological R&D, to integration of the whole industry, and are becoming reformers and participants in the entire agricultural industry. At the same time, technological start-ups and leading IT giants are cooperating with traditional agricultural enterprises to embrace digital agriculture. The future of digital agriculture is not in competition, but in integration.