Thursday, June 7, 2012

Land Circulation Expected to Promote Seed Industry

Land circulation is espected to benefit domestic seed industry, as seed manufacturers are able to achieve independent seed production in farmlands leased from farmers, according to CCM International’s May Issue of Seed China News.
In the past, most domestic seed manufacturers entrusted farmers to produce crop seeds, by providing the latter with planting materials and corresponding remuneration. After harvest, seed manufacturers purchased seeds or fruits from farmers and conducted seed processing and marketing. However, seed qualities covering purity, cleanliness, germination rate and moisture content could not be effectively ensured, which has limited the development of domestic seed industry to a large extent.
By leasing land from farmers who own the use right of rural land, seed manufacturers could afford to independently and reasonably use contiguous land in seed production, more efficiently ensuring seed quality. In addition, some farmers' seed propagation and sale without permission would be greatly prevented, which is conductive to build a better market order in seed industry.
For farmers transferring land-use rights to seed manufacturers, they could liberate themselves from the land contract and receive lease charges. Moreover, these farmers' subcontract of land-use rights could also take part in seed propagation or production in their lands and further increase their incomes. Therefore, land circulation between farmers and seed companies could benefit both sides.
Actually, some seed companies have actively cooperated with farmers on land circulation. For example, Beijing Doneed Seeds Co., Ltd., one leading corn seed company at home, has signed an agreement with farmers in Zhangye City, China's largest corn seed production base, to rent the farmland covering the area of 333.33 ha. (5,000 mu) in corn seed production for the year of 2012. Origin Agritech Limited (Origin), a technology-focused corn seed company listed in NASDAQ, has also rented large area of lands from local farmers to conduct corn seed production.
Revealed by industrial insiders, land circulation for corn seed production has also been rapidly developed in Xinjiang, located in the northwest corner of China, with unique natural environment for corn planting and corn seed production. More and more seed companies from interior China, such as Shandong Denghai Seeds Co., Ltd. (Shandong Denghai), Origin, Liaoning Dongya Seed Co., Ltd., etc., have rushed to Xinjiang to rent farmland for corn seed production.
Hubei Provincial Seed Group Co., Ltd. (HPSG), a state-owned seed company based in Hubei Province, signed a land circulation agreement with a town government in Ezhou City in July 2011, aiming to build a large rice seed production base.
To support seed industry and boost agricultural development, local governments of some areas have made related policies on land circulation. For example, the municipal government in Chongqing City, Southwest China, encourages large seed companies to build seed production bases of rice, potato, vegetables, etc., in way of leasing land from local farmers or rural cooperatives.
In Linze County, Zhangye City, local government has taken land circulation as an important task in promoting the construction of corn seed production bases. The government recommends farmers or rural cooperatives to transfer land-use rights to seed companies for seed production, to provide a lump-sum incentive of USD119.05/ha. (RMB50/mu) for the transferors who subcontract land for over 10 years.

In Oct. 2008, Chinese government issued the rules that it allows farmers to lease their contracted farmland or transfer their land-use rights, an important part of land reform efforts intended to double rural income by 2020.
Chinese farmers are traditionally family-centered in their thought and action, passionately attached to their land. Therefore, there are still part of the farmers who do not want to transfer their land-use rights or give up land contracts, especially experiencing the land circulation forced by regional governments. However, all transfers of land-use rights must be voluntary, with adequate payment.
It seems to be a trend that domestic seed manufacturers enhance seed production through land circulation. Industrial insiders believe that land circulation would be an effective method to boost seed industry and improve the overall efficiency of agricultural production in China, relying on enterprises' standardized and large-scale producing operation. With adequate payment, more and more farmers are willing to take part in land circulation and increase their incomes.

Source: Seed China News 1205

Content of Seed China News 1205:
Longping High-tech maintains good development momentum
Grand Agriseeds presents significant growth in 2011
Land circulation expected to promote seed industry
Vegetable prices generally rise substantially
DBN to boost biological breeding
ZARD would take over Wuhan Good-Seed from CSFAC
Rice genome breeding chip born in China
Fipronil FS to control athetis lepigone on corn
Bayer CropScience supplies seed treatment machinery in China
"Xianyu 335" development slowing down

Seed China News, a monthly publication issued by CCM International on 30th of every month, offers timely update and close follow-up of China’s seed industry dynamics, analyzes market data and finds out factors influencing market development

About CCM International
CCM International is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals. CCM International offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer.
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