Land circulation expected to promote seed industry


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It seems to be a trend that domestic seed manufacturers enhance their seed production by leasing land from farmers.

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Land circulation expected to promote seed industry

  1. 1. Land Circulation Expected to Promote Seed IndustrySummary: It seems to be a trend that domestic seed manufacturers enhance their seedproduction by leasing land from farmers.Tags: seed, land, rice seed, seed production, land circulation, corn seed, production, seedmanufacturerLand circulation is espected to benefit domestic seed industry, as seed manufacturers are able toachieve independent seed production in farmlands leased from farmers, according to CCMInternational’s May Issue of Seed China News.In the past, most domestic seed manufacturers entrusted farmers to produce crop seeds, byproviding the latter with planting materials and corresponding remuneration. After harvest, seedmanufacturers purchased seeds or fruits from farmers and conducted seed processing andmarketing. However, seed qualities covering purity, cleanliness, germination rate and moisturecontent could not be effectively ensured, which has limited the development of domestic seedindustry to a large extent.By leasing land from farmers who own the use right of rural land, seed manufacturers could affordto independently and reasonably use contiguous land in seed production, more efficientlyensuring seed quality. In addition, some farmers seed propagation and sale without permissionwould 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 themselvesfrom 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 furtherincrease their incomes. Therefore, land circulation between farmers and seed companies couldbenefit both sides.Actually, some seed companies have actively cooperated with farmers on land circulation. Forexample, Beijing Doneed Seeds Co., Ltd., one leading corn seed company at home, has signedan agreement with farmers in Zhangye City, Chinas largest corn seed production base, to rentthe farmland covering the area of 333.33 ha. (5,000 mu) in corn seed production for the year of2012. Origin Agritech Limited (Origin), a technology-focused corn seed company listed inNASDAQ, has also rented large area of lands from local farmers to conduct corn seedproduction.
  2. 2. Revealed by industrial insiders, land circulation for corn seed production has also been rapidlydeveloped in Xinjiang, located in the northwest corner of China, with unique natural environmentfor 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 SeedCo., 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 HubeiProvince, 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 areashave made related policies on land circulation. For example, the municipal government inChongqing City, Southwest China, encourages large seed companies to build seed productionbases of rice, potato, vegetables, etc., in way of leasing land from local farmers or ruralcooperatives.In Linze County, Zhangye City, local government has taken land circulation as an important taskin promoting the construction of corn seed production bases. The government recommendsfarmers 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 whosubcontract land for over 10 years.In Oct. 2008, Chinese government issued the rules that it allows farmers to lease their contractedfarmland or transfer their land-use rights, an important part of land reform efforts intended todouble rural income by 2020.Chinese farmers are traditionally family-centered in their thought and action, passionatelyattached to their land. Therefore, there are still part of the farmers who do not want to transfertheir land-use rights or give up land contracts, especially experiencing the land circulation forcedby regional governments. However, all transfers of land-use rights must be voluntary, withadequate payment.It seems to be a trend that domestic seed manufacturers enhance seed production through landcirculation. Industrial insiders believe that land circulation would be an effective method to boostseed industry and improve the overall efficiency of agricultural production in China, relying on
  3. 3. enterprises standardized and large-scale producing operation. With adequate payment, moreand more farmers are willing to take part in land circulation and increase their incomes.Source: Seed China News 1205 of Seed China News 1205:Longping High-tech maintains good development momentumGrand Agriseeds presents significant growth in 2011Land circulation expected to promote seed industryVegetable prices generally rise substantiallyDBN to boost biological breedingZARD would take over Wuhan Good-Seed from CSFACRice genome breeding chip born in ChinaFipronil FS to control athetis lepigone on cornBayer CropScience supplies seed treatment machinery in China"Xianyu 335" development slowing downSeed 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 dataand finds out factors influencing market developmentAbout CCM InternationalCCM 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 offersMarket Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis allthrough its new proprietary product ValoTracer.For more information, please visit International Ltd.Guangzhou CCM Information Science & Technology Co., Ltd.17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou510070, ChinaTel: 86-20-37616606Email:
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