The Chinese State Council recently released the no.1 government paper, verbosely titled “Several opinions of the State Council on accelerating the development of modern agriculture to further enhance the vitality of rural development,” which stressed that intelligent agriculture was one of the key government focus areas to develop the “modern agriculture” system in China. The document set 80 tasks that the government should accomplish in 2013 and assigned each task to specific ministries and departments. Among these tasks, a significant portion are focused on developing information technology infrastructure in the rural area to effectively facilitate the development of intelligent agricultural technologies based on “internet of things” (IOT) technologies.
That said, municipal governments are moving quickly according to the State Council guidelines. Just a few weeks after the release of the no. 1 document, the municipal government in Changzhun, the capital city of Jilin province in North East China, signed an agreement with China Unicom to develop an agricultural information system in rural and peri-urban areas around the city. In the system, information such as soil humidity, soil temperature, and carbon dioxide will be collected by the sensors that are installed in the fields and sent to an analytical platform via wireless telecom networks. The government expects to use the platform to guide the precision planting activities, as well as facilitate the decisions on irrigation.
We expect the substantial government initiatives to develop intelligent agriculture will benefit the companies touching this value chain, including telecom infrastructure suppliers, intelligent green house system developers, and relevant components and system suppliers. The infrastructure developers include telecom giants such as China Telecom and China Unicom, while smart green house system developers are relatively small companies, such as Wuxi Kaiyi (client registration required) and Beijing Tiandi Furui (client registration required). In the initial stages, intelligent agriculture projects will be mainly sponsored by the government, as currently observed in the intelligent green house system market in which local governments are today’s biggest buyers. Clients seeking investment targets or business partners in the intelligent agriculture industry in China should consider the government relationships as a key factor when selecting the partners. It is also important to take the long view in business development in China in the agricultural area. Agriculture is now emerging as an investment theme with a view to major opportunities in the coming decades as China’s demographic dividend, urbanization, and affluence converge and demand advanced agriculture technologies and systems to serve China’s population.