(Report Producer/Author: Changjiang Securities, Yu Haining)
1 The relationship between high-precision positioning and precision agriculture
Automation and precision are the direction of the next stage of development of mainland agriculture
Agricultural issues are directly related to the people's livelihood and have been the foundation of the country since ancient times, and how to improve agricultural output value is a problem that must be faced squarely in every era. China's agricultural development can be divided into four stages: agriculture 1.0 is traditional agriculture, production tools are simple, production efficiency is low, and there is no natural disaster resistance; agriculture 2.0 is small-scale large-scale agriculture, which uses agricultural machinery to achieve large-scale production to improve production efficiency; agriculture 3.0 is automated agriculture, and professional farmers use software, hardware equipment, etc. to achieve large-scale and precise operations, greatly improving resource utilization; agriculture 4.0 is intelligent agriculture, which continues to deepen agricultural digitalization on the basis of 3.0. The degree of intelligence, through various types of sensor equipment to obtain data, the agricultural resources for deeper integration, truly realize unmanned production. To sum up, smart agriculture is an advanced stage of agricultural informatization development from digitalization to networking to intelligence, of which precision agriculture and digital agriculture are part of smart agriculture.
The mainland's agricultural mechanization is advancing well, and it is currently in the stage of agricultural 2.0 to 3.0. According to the data disclosure of the Ministry of Agriculture and Rural Affairs, in 2019, the comprehensive mechanization rate of the main grain crops (wheat, rice, corn) in the cultivation and harvesting process of the mainland has reached more than 80%, and the mechanization operation of the whole process has been basically fully realized. Weak links (such as cotton, peanuts, rapeseed, etc.) The mechanization rate is also breaking through rapidly, and the overall agricultural mechanization rate has steadily increased. Automation and precision will become the theme of the next stage of development, and mainland agriculture is in the stage of moving from 2.0 to 3.0.
Agricultural planting can be divided into three major links: "ploughing", "planting" and "harvesting", and precision and automated operations are expected to penetrate fully. Specifically, the specific scenarios involved in automation include: land pre-cultivation, sowing, fertilization, pest control, weeding, irrigation, harvesting and picking, sorting, etc. The specific operations mainly involved in the above scenarios include: precision harvesting of medium and large agricultural machinery, weeding spraying of small unmanned vehicles, spraying of agricultural unmanned aerial vehicles "planting medicinal fertilizer", autonomous high-definition aerial surveying of remote sensing drones, and real-time monitoring of agricultural Internet of Things. The designed technologies include high-precision positioning, high-precision drawing, perceptual recognition, intelligent control, intelligent management, etc.
High-precision positioning and navigation technology is the key to the development of precision agriculture
Precision agriculture is the first stop of smart agriculture, which mainly relies on 5S technology and has matured. 5S technology includes remote sensing, geographic information system, global positioning system, digital photogrammetry system, expert system, etc., and its application in agriculture has been relatively mature. Under the role of precise positioning and navigation of 5S technology, simple scenarios suitable for medium and large agricultural machinery operations such as cultivation and harvesting are expected to take the lead in landing. Big data, Internet of Things and other technologies are also gradually applied in the field of agriculture, mainly used for intelligent fertilization, irrigation equipment construction, in the cooperation of 5S technology, is expected to promote sowing, fertilization, irrigation, pest control and other scenarios to quickly land.
Cloud computing, artificial intelligence, and 5G agricultural applications are currently in the exploratory stage, which is the key to the late stage of agriculture 3.0 to 4.0. On the basis of the basic realization of agricultural automation and precision operation in 3.0, massive Internet of Things data is transmitted through the 5G network, and after the decision is analyzed and decided by artificial intelligence and cloud computing technology, the allocation of agricultural resources can be deeply optimized on a large scale, further reducing the degree of manual participation, making production operations more intelligent, management more refined, and decision-making more accurate.
High-precision positioning and navigation technology will always play a central role in agricultural intelligence. Agricultural intelligence needs to be built on the basis of automation, and the first step of agricultural automation is to give agricultural production tools the ability to drive automatically. Agricultural production tools include but are not limited to medium and large agricultural machinery, agricultural unmanned vehicles, agricultural drones, etc., and their automatic driving functions are similar to those required by cars, all of which need to have environmental awareness and positioning navigation, but considering the characteristics of farmland environment obstruction, vegetation and less interference, agricultural machinery and unmanned aerial vehicle automation mainly rely on positioning navigation rather than perception recognition.
Medium and large agricultural machinery applications land faster. Medium and large agricultural machinery operation scenario is relatively simple, only rely on high-precision positioning and navigation technology can achieve automated operations, is currently one of the fastest landing speed of agricultural equipment. Medium and large agricultural machinery is currently mainly installed and renovated, and its intelligent kit mainly includes four parts: high-precision satellite combined navigation receiver, electric steering wheel, display screen, and camera. The intelligent kit uses satellite positioning, mechanical control, inertial navigation and other technologies to make the agricultural machinery automatically adjust the direction of travel in accordance with the planned route, and the operation accuracy can reach the centimeter level, which can be applied to various agricultural operations such as planting, trenching, harrowing, sowing, ridge raising, fertilization, spraying, harvesting and so on.
On the basis of high-precision positioning and navigation technology, agricultural unmanned vehicles can assemble a variety of functional components according to their needs and complete a variety of operations. Agricultural unmanned vehicle is small in size, can be flexibly traveled between the ridges, according to different agricultural needs, with different functional components, can achieve accurate plant protection, efficient sowing, intelligent grass cutting, agricultural materials transportation, epidemic prevention and killing and other functions.
Agricultural UAVs can integrate functions such as sowing, spraying, surveying and mapping, and complete a number of agricultural tasks accurately and efficiently. Agricultural unmanned aerial vehicles also take high-precision positioning and navigation technology as the core, supplemented by cameras, radar and other sensors to achieve accurate positioning and navigation, aerial obstacle avoidance, terrain detection and other operations, with large-capacity intelligent fertilizer boxes to complete agricultural activities such as fertilization and pest control. In addition, agricultural UAVs can be equipped with multi-lens sensors to quickly perform high-definition mapping tasks in farmland orchards and quickly stitch up high-definition maps, comprehensively improving the operational efficiency of agricultural UAVs.
In addition to reducing the dependence on manpower, precision agriculture can bring many advantages. Taking agricultural unmanned aerial vehicles as an example, its accurate flight operation according to the route can ensure that the operation process is more efficient, reduce the area of repetitive operations, and waste resources. In addition, unmanned equipment can work around the clock, the operation efficiency is stable and far beyond manual operation, and the advantage is significant in a wide range of high-repetition labor scenarios. In addition, in areas with complex terrain such as mountains and hills, small agricultural unmanned vehicles and agricultural drones are more flexible, which can reduce the damage of traditional large-scale agricultural machinery to crops and fields. According to the data disclosed by Yiou Think Tank, in 2019, the number of unmanned aerial vehicles in China has reached 55,000, the plant protection operation area has reached 850 million mu, and the amount of pesticide use has been reduced by 20% through precision operation, 90% water has been saved, and the utilization rate of pesticides has been improved by 30%.
The development model of smart agriculture in the United States and Japan can be used for reference
The mainland has a vast area and a diverse and complex terrain, with fragmented and scattered cultivated land such as Jiangsu, Zhejiang, and Yungui, as well as vast areas of cultivated land such as the northeast and Xinjiang. In the process of development, various developed agricultural countries in the world have explored their own agricultural development paths according to local conditions in combination with their own resource endowments, which can be divided into three models: large-scale production mode, fine operation mode, and scientific and technological empowerment mode. The United States has a sparsely populated land and developed industry, which has created a good foundation for large-scale agricultural production; Japan's dense population and scattered arable land have introduced fine operations into agriculture to enhance factor productivity. The above-mentioned national smart agriculture development models have reference significance for different regions of the mainland.
On the basis of sparse population and developed industry, the United States has formed a business model represented by large-scale farms. Large-scale family farms manage thousands of acres of contiguous land through advanced agricultural machinery and equipment, from arable land, sowing, management, harvesting, to transportation, storage, processing, each production link has a high degree of mechanization characteristics. As a representative of agricultural intensification and industrial operation, the United States is the country with the highest level of agricultural mechanization and has extremely high labor productivity.
Limited by geographical and demographic factors, Japan is unable to establish large-scale farms, so its agricultural business units are mainly small-scale farmers. Small agricultural machinery in Japan's small-scale, intensive farming production mode is widely used, in its main crop rice field operations, arable land, transplanting, plant protection, harvesting and other links are basically fully mechanized, Japan's rice seedlings, planting, semi-feeding combined harvest machinery ranks the world's leading level. However, the intensive farming production model and the small and complete production equipment of each household have also contributed to the high production costs of Japanese agriculture. At the same time, in the face of the problem of relatively insufficient resource endowments, Japan has vigorously developed biotechnology and pesticide and fertilizer industries under the mode of intensive farming production, focusing on improving the production environment, improving crop varieties, and improving soil quality, thereby increasing unit factor productivity.
Israel has certain advantages in the mechanization, electronicization and intelligence of agricultural equipment, and has the world's leading drip irrigation technology, water resources management technology, protected land cultivation technology, etc., which has helped Israel create an agricultural miracle in a harsh environment. In addition, in terms of agricultural Internet of Things, Israel has realized the wide application of technologies such as crop dynamic monitoring, logistics and warehousing traceability supervision, and many agricultural facilities can be remotely managed through mobile phones, which has achieved the improvement of production efficiency and the reduction of labor costs.
The development of industrialization has helped the mainland achieve sustained economic growth and rapid accumulation of material wealth, among which the popularization and application of mechanical technology and chemical technology in the agricultural field have greatly improved the comprehensive production efficiency of the mainland agriculture in a certain period of time. However, the excessive use of pesticides and chemical fertilizers has led to soil compaction, decreased organic matter, and reduced biodiversity; excessive land reclamation has caused land desertification, salinization, soil erosion, and other problems; and the large-scale use of traditional agricultural machinery has also increased the risk of atmospheric and soil pollution. The above problems adversely affect the yield and quality of crops, reduce the enthusiasm of farmers in farming, undermine the sustainable development of agriculture, and bring challenges to food security on the mainland.
Biotechnology and the fertilizer industry have a significant impact on overall agricultural production, and the agricultural operation model is equally important. Considering the complex and diverse characteristics of the types of cultivated land on the mainland, the intelligent operation of agricultural operations should be adapted to local conditions. In the northeast, Xinjiang, and other regions, the cultivated land is relatively concentrated and flat, the average land labor force is less, and the application of large-scale agricultural machinery is more, and it is expected that agricultural automation operations will be realized relatively quickly. In Jiangsu, Zhejiang, Yunnan, guizhou, and other areas, cultivated land is relatively fragmented and uneven, and it is difficult to carry out large-scale mechanized operations, which is more suitable for the fine operation of small agricultural machinery represented by Japan. After the basic realization of agricultural automation and precision, the development of mainland agriculture will be in the direction of science and technology-enabled smart agriculture represented by Israeli agriculture. (Source: Future Think Tank)
2 Agricultural intelligence is imperative, and the contradiction between supply and demand needs to be eased urgently
Demand side: Demand quantity and quality double rise, improve agricultural efficiency is imperative
The population continues to grow positively, and the total demand for agricultural products continues to rise. The total population of the mainland has continued to maintain positive growth since 1962, as of 2020, the total population of the mainland reached 1.41 billion, the growth rate has slowed down sharply in recent years, with the transformation of the mainland's fertility policy, the total population growth is expected to accelerate, and the demand for agricultural products is rigid.
Per capita disposable income has increased, and the demand for agricultural products by mainland residents has gradually escalated. According to the statistics of the National Bureau of Statistics, the disposable income of mainland residents in 2020 was 32189 yuan, which was nearly doubled compared with 18311 yuan in 2013, and the increase in per capita income was accompanied by changes in the proportion of residents' food consumption. In the per capita food consumption of Chinese residents, the proportion of meat, eggs and milk has increased year by year, reflecting the upgrading of Chinese residents for food consumer goods, the people's demand has changed from eating enough to eating well, and higher requirements have been put forward for the quantity and quality of agricultural products. Livestock farming usually needs to be based on planted crops, and upgrading food consumption will put forward higher demands on the mainland crop industry.
Supply side: Supply growth is weak, and the production model needs to be improved urgently
The genetic dividend of grain seeds is gradually fading, the annual grain output has entered a bottleneck of growth, and it is imperative to rely on science and technology to improve production efficiency. By reviewing the mainland's grain production, we find that there are two main reasons for promoting the increase in the mainland's total grain output in the past few decades: the increase in production enthusiasm brought about by the household contract responsibility system, and the genetic dividend of grain seeds brought about by the research and development of hybrid rice. Among them, the efficiency of the household contract responsibility system has reached its limit around 1991, and the genetic dividend of hybrid rice has gradually faded with its penetration rate. Since 2015, the mainland's grain output has remained relatively stable, and growth has fallen into a bottleneck period, so how to make grain output continue to grow has become a difficult problem that must be faced at present.
Agricultural issues are global, and increasing yields through science and technology is the only way out. According to the Statistics of the World Bank, since 1961, the average arable land area in the world and Chinese has shown an overall downward trend, and agricultural problems have involved the whole world; among them, the average arable land level of Chinese has continued to be lower than the global per capita level, and the agricultural contradictions have become more acute. In addition, according to data from the General Administration of Customs, the trade deficit of the mainland's agricultural products has widened year by year, and the import volume of agricultural products has repeatedly reached a new high. In the long-term dimension, agricultural problems involve the whole world, relying on imports to alleviate agricultural contradictions is not a long-term strategy, and it is closely related to national security and social stability, so increasing the yield per mu through science and technology and enhancing agricultural autonomy cannot be ignored.
The urbanization rate has increased, the agricultural population has been declining, and the supply of labor in the primary industry has been declining. According to the National Bureau of Statistics, the urban population and urbanization rate on the mainland have been rising since 2015, and the urbanization rate is expected to reach 68.8% by 2025. In stark contrast to the rising urbanization rate, the number of people employed in the mainland's primary industry and its proportion, according to the Ministry of Rural Agriculture, the number of people employed and the proportion of the mainland's primary industry has continued to decline since 2015, and it is expected that the proportion of employees in the primary industry will be as low as 20.1% by 2025. The overall supply of labor in the primary industry has declined significantly.
Aging leads to reduced labor efficiency and motivation. From the perspective of population structure, the proportion of the elderly aged 65 and above in rural areas in 2020 is 17.72%, which is significantly higher than that of cities and towns. In the future, the migration of rural youth to cities and towns will continue to change the number and age structure of the remaining population in rural areas, and further exacerbate the aging of farmers. The continuous reduction of the rural population and the aging of the labor force have determined that China's grain supply should be the main direction of improving production efficiency in the future, so it is an inevitable trend to carry out modern agricultural production, create large-scale production, accelerate the change of agricultural farming mode from labor-intensive to modern and mechanized, and develop smart agriculture.
China's land is highly dispersed, and the proportion of small-scale land is extremely high. The implementation of the household contract responsibility system has promoted the development of agriculture on the mainland for a certain period of time, but it has also led to a large amount of land on the mainland being held in the hands of small farmers. Highly dispersed land has hindered the process of agricultural mechanization and scale. According to the Statistics of the Food and Agriculture Organization of the United Nations, 93% of the average land operation scale structure of mainland farmers is less than 1 hectare, which is much higher than the world average.
The scale of agricultural production in the mainland is small, the production cost is high, and the structure needs to be optimized. The mainland land presents a highly dispersed structure, and it is difficult to carry out large-scale mechanization and systematic operations. The huge base of farmers, uneven farming technology and agricultural knowledge reserves, and the overall low level have led to greater difficulties for relevant enterprises in promoting new agricultural technologies, and low willingness to continue research and development and promotion, forming a vicious circle at both ends of research and marketing. According to a 2015 disclosure by the Rural Economic Research Department of the Development Research Center of the State Council, China's agricultural costs have surpassed those of the United States, and the amount and proportion of material and service expenses for most major crops are relatively low.
Under the traditional extensive mode of agricultural production, the technology and equipment for the application of pesticides and chemical fertilizers are relatively backward, and excessive amounts of agricultural chemicals are put into the farmland, resulting in the destruction of the ecological balance of the farmland and the decline in the yield and quality of agricultural products, which in turn further stimulates peasant households to increase the use of agricultural chemicals year by year, forming a vicious circle, which not only reduces the enthusiasm of peasant households for farming, undermines the sustainability of agricultural development, and even directly endangers human health. Agrochemicals have their own contradictions of increasing yields and polluting the environment, so they need precise, moderate and scientific application.
3 Everything is ready, the east wind has come, and agricultural intelligence is expected to accelerate its development
Policy side: Increase support efforts to promote the landing of Beidou empowerment
The support of smart agriculture has been continuously strengthened. Since the Ministry of Agriculture issued the "Twelfth Five-Year Plan for the Development of National Agricultural and Rural Informatization" in 2011, the state has continuously strengthened its support for the development of smart agriculture, and the No. 1 document of the Central Committee for many consecutive years has clarified the development direction and construction steps of agricultural informatization and agricultural modernization, and in 2014 the CPC Central Committee and the State Council issued "Several Opinions on Comprehensively Deepening Rural Reform and Accelerating Agricultural Modernization", proposing to "build a full-scale agricultural informatization and mechanization technology system focusing on agricultural Internet of Things and precision equipment". The development of the Internet of Things and precision equipment will be regarded as the key task in building agricultural modernization. In 2015, the CPC Central Committee and the State Council issued the Several Opinions on Increasing the Intensity of Reform and Innovation and Accelerating agricultural modernization, proposing to accelerate agricultural scientific and technological innovation and make major breakthroughs in the fields of biological breeding, intelligent agriculture, agricultural machinery and equipment, and ecological environmental protection.
After 2015, the frequency of the introduction of smart agriculture-related policies has further accelerated, and the importance of digital upgrading of traditional agriculture has been increasing. The "Outline of the Thirteenth Five-Year Plan for National Economic and Social Development" focuses on raising the level of agricultural technology, equipment, and informatization, strengthening the integration of agriculture and information technology, developing smart agriculture, and raising the level of agricultural productivity. The "Digital Agriculture rural development plan (2019-2025)" focuses on accelerating the digital transformation of production and operation by 2025, and important progress has been made in the construction of digital agriculture and rural areas. In March 2021, the "Fourteenth Five-Year Plan for National Economic and Social Development of the People's Republic of China and the Outline of Long-term Goals for 2035" was officially released, which put forward the development goals of smart agriculture from the policy level: "It is necessary to strengthen the research and development and application of large and medium-sized, intelligent and composite agricultural machinery, increase the comprehensive mechanization rate of crop cultivation and harvest to 75%, improve the agricultural science and technology innovation system, innovate agricultural technology promotion and service methods, and build smart agriculture."
Subsidies for the purchase of agricultural machinery continue to increase. Since the introduction of the policy in 2004, the intensity of support has gradually increased, the scope of benefits has been continuously expanded, and the effect of the policy has continued to appear. By the end of 2020, the central government has invested a total of 239.2 billion yuan, supporting more than 38 million farmers and agricultural production and operation organizations to purchase more than 48 million sets of various agricultural machinery. In 2021, the central government will allocate 19 billion yuan of subsidies for the purchase of agricultural machinery, an increase of 2 billion yuan over 2020.
Agricultural policy support is more precise, focusing on subsidizing agricultural machinery science and technology independent innovation equipment. According to the "Guiding Opinions on the Implementation of Subsidies for the Purchase of Agricultural Machinery from 2021 to 2023" issued by the Ministry of Agriculture and the Ministry of Finance, efforts should be made to highlight the self-innovation of agricultural machinery science and technology in terms of subsidy qualifications, promote the use of intelligent terminals and the application of intelligent operation modes, deepen the promotion and application of the Beidou system in agricultural production, and ensure the safety of agricultural production data; in terms of subsidy standards, efforts should be made to achieve "rise and fall", and the amount of subsidies for some key subsidies for machinery has been increased, and the proportion of measurement has been increased from 30% to 35%.
Market side: everything is ready, the east wind has just arrived
The relevant technologies have matured, primary applications have landed rapidly, and giants in various industries have entered the smart agriculture. By the end of 2020, China's rural broadband access subscribers reached 142 million, an increase of 7.12 million from the end of 2019. The fiber rate and 4G coverage rate of administrative villages nationwide exceed 98%. The continuous improvement of rural network coverage provides basic network support for the application of high-precision positioning of Beidou, and simple farming represented by medium and large agricultural machinery has the conditions for large-scale landing. With its huge market space and massive data resources, Zhihui Agriculture has attracted giants from various industries to enter the market.
The Beidou terminal of agricultural machinery has entered the outbreak period of large-scale application, and the inflection point of the industry has arrived. According to data disclosed by China Satellite Navigation at its 12th Annual Meeting, the sales volume of assisted driving agricultural machinery in mainland China in 2020 was 40,824 units, an increase of 140% over 2019. At the end of 2020, the stock of assisted driving agricultural machinery was about 73,000 units, more than half of which were new terminals in 2020, and the sales base and growth rate of agricultural machinery Beidou terminals were significantly improved, and the industry officially entered the outbreak period of large-scale applications.
In 2021, the price reduction of agricultural machinery Beidou terminal is obvious, and the industry penetration rate is expected to accelerate penetration. Taking the representative manufacturers in the industry as an example, according to the price announced on the website of Agricultural Machinery, the average transaction price of 2020 China TestIng Navigator NX300, Fengjiang Intelligent FJNBD-2.5RD, Huida Technology HD308BD-2.5GD, Sinan AG360/360Pro and so on is more than 50,000 yuan, and the average paid price is more than 30,000 yuan. In 2021, the price of agricultural machinery Beidou terminal was greatly reduced, some dealers and products quoted less than 20,000 yuan, after deducting subsidies of 5,000-6,000 yuan, some users paid the price or less than 10,000 yuan. After the industry enters a period of large-scale application outbreak in 2020, the price reduction of products in 2021 will help the penetration rate of the smart agricultural machinery market to increase rapidly.
The land circulation rate and the degree of mechanization have been continuously improved, and the basic environment required for agricultural intelligence has been optimized. As mentioned above, the distribution of cultivated land has seriously hindered the process of agricultural mechanization on the mainland, and land circulation has solved the above-mentioned problems to a certain extent. According to the data of the Ministry of Agriculture and Rural Affairs, the land circulation area and circulation ratio on the mainland are increasing year by year, and it is expected to exceed 50% after 2024, and the comprehensive mechanization rate of crops is also increasing year by year, and it is expected to be close to 80% in 2025. The continuous improvement of land circulation rate and the degree of mechanization have provided convenience for agricultural intelligence.
4 The construction of the space section and the ground section has been completed, and the domestic manufacturers have great potential
From overseas monopolies to the rise of domestic manufacturers, the efficiency of policy subsidies is huge. Automatic navigation equipment for traditional agricultural machinery enterprises is a completely unfamiliar field, the early continental automatic navigation equipment is mainly by John Deere, CNH Global, CLAAS KGaA mbH and other international enterprises in the form of automatic agricultural machinery introduction to the market. After 2010, it will mainly import Trimble, John Deere, and Topcon autonomous driving equipment. In the same year, the Heilongjiang Agricultural Reclamation Bureau included autonomous driving equipment in the scope of subsidies for the purchase of agricultural machinery, promoting the rapid growth of sales of autonomous driving equipment, and many domestic manufacturers transformed their own navigation systems from agents. In 2013, the Xinjiang Autonomous Region included automatic navigation in the scope of agricultural machinery subsidies, once again promoting the rise of domestic brands. In 2016, many provinces listed Beidou terminals in the subsidy directory; in 2017, they officially entered the scope of provincial subsidies, and Domestic manufacturers of Agricultural Automatic Navigation Equipment in China embarked on the road to rise.
The Beidou-3 networking of the space section has been completed, the ground section has completed the construction of the enhanced network, and the cluster effect of the industrial chain has promoted the rapid development of the industry. Beisan was fully completed in 2020, its signal in the Asia-Pacific region is better than GPS, and the differential service signal network based on enterprises such as China Mobile and Qianxun Location has also been completed in recent years. In addition, in the field of agriculture, the whole industrial chain of Beidou navigation from the underlying algorithm to related products has also gradually taken shape in the mainland. Agricultural big data services, agricultural management system related enterprises are mainly gathered in Beijing, the Internet of Things and agricultural machinery and equipment enterprises are mainly gathered in Guangdong and Shanghai, the industrial cluster effect to promote the rapid development of the industry.
The inflection point of the industry has arrived, and precision agriculture is expected to develop rapidly
The smart agriculture market space is huge, and precision agriculture is expected to take the lead in landing. According to Huawei's forecast, the market size of smart agriculture is expected to reach 26.761 billion US dollars in 2020, and the CAGR will reach 14.3% in 2015-2020. In the long run, with the continuous landing of application scenarios, the prosperity of the smart agriculture industry is expected to continue. In the medium term, considering the maturity of technology and the current situation of agriculture in the mainland, we believe that precision agriculture with unmanned equipment as an important carrier and high-precision positioning technology as the core technology is expected to take the lead in landing and realize the automation of simple agricultural affairs. From a short-term perspective, combined with the market situation, we believe that the sales volume of auxiliary agricultural machinery in precision agriculture has shown a significant inflection point, and the subsequent price reduction measures of auxiliary driving equipment manufacturers are superimposed, and auxiliary agricultural machinery is expected to start rapidly.
Smart agriculture is an advanced stage of agricultural informatization development from digitalization to networking to intelligence, of which precision agriculture and digital agriculture are part of smart agriculture. Overall, intelligent agriculture can be divided into three parts: prenatal, mid-production, and post-production. Among them, precision agriculture mainly involves prenatal and production, which mainly relies on 5S technology based on high-precision positioning, and digital agriculture mainly involves production and post-production, which mainly relies on technologies such as the Internet of Things and big data.
Precision agriculture mainly relies on the 5S technology based on high-precision positioning to control agricultural equipment, according to spatial variation, positioning, timing, quantitative implementation of a set of modern agricultural operations, which pays more attention to the improvement of efficiency, and is currently mainly concentrated in scenarios such as medium and large agricultural machinery cultivation and harvesting. Digital agriculture is based on precision agriculture, the crop growth process monitoring and data acquisition, compared to precision agriculture, it makes more use of the Internet of Things and big data technology, the industrial chain is mainly gathered in the big data analysis platform and Internet of Things management system.
Precision agriculture is the foundation of smart agriculture and the first step in the journey of agricultural intelligence. At present, the main industries involved in precision agriculture are automated agricultural tools, such as medium and large auxiliary driving agricultural machinery, small agricultural unmanned vehicles, agricultural drones, etc. Among them, small agricultural unmanned vehicles and agricultural unmanned aerial vehicles are mainly provided in the form of complete products, while medium and large auxiliary driving agricultural machinery is mainly based on after-installation transformation, involving satellite and habit combination navigation, electric steering wheel, display, antenna, angle sensor, control box and other products. (Source: Future Think Tank)
The strong rise of domestic manufacturers, the competitive landscape is becoming clearer
Agricultural drones and agricultural machinery automatic navigation equipment are the two main products of precision agriculture. Agricultural UAVs have higher requirements for integration and control technology, greater cost and difficulty in use, and slower landing speed. According to the data disclosure of Agricultural Machinery, the top five with the highest brand attention of plant protection drones in the first half of 2021 are DJI Agriculture, Jifei Technology, Tianying Brothers, Wuxi Hanhe and World Agricultural Machinery. Among them, the attention of DJI Agriculture and Jifei Technology is significantly ahead of other enterprises, and the concentration effect of the head of the plant protection UAV industry is obvious.
The automatic navigation system of agricultural machinery mainly relies on positioning and navigation technology, which is simple to operate and is expected to take the lead in landing. The automatic navigation system can replace the farmer to complete the driving operation of agricultural equipment, mainly used for sowing, cultivating land, harvesting and other operations. The above operation only requires agricultural machinery to drive according to the designated route, and the operation is relatively simple. Domestic related enterprises mainly include Hua test navigation, United Think Zhuang (under hezhuang Huinong), Lianshi navigation, Fengjiang intelligence, etc., overseas related enterprises mainly include Trimble, Topcon, John Deere and so on. With the completion of the construction of the north three networks and high-precision enhanced service networks, domestic manufacturers have continuously improved in the underlying algorithm technology and application products, and domestic enterprises have obvious advantages in product cost performance compared with overseas enterprises.
According to the data disclosed in the China Agricultural Machinery Industry Yearbook, the stock of medium and large tractors in mainland Agriculture in 2019 was 4.44 million units; according to the data released by the CSNC 2021 annual meeting, the sales volume of agricultural machinery automatic navigation systems in Mainland China in 2018-2020 was 8345, 16984 and 40824 units, respectively, and by the end of 2020, the inventory of automatic navigation systems for agricultural machinery in Mainland China was 73,000 units.
On the basis of the above known information and data, we make the following assumptions: (1) Since 2019, the stock of agricultural large and medium-sized tractors will grow by 3% ;(2) The penetration rate of agricultural machinery automatic navigation systems in the agricultural large and medium-sized tractor stock market in 2025 will be 15% ;(3) The average price of agricultural aircraft automatic navigation driving systems in 2021 will be 16,000 yuan, and the price will be reduced by 10% per year thereafter. On this basis, we estimate that the annual sales volume of agricultural machinery automatic navigation systems in 2025 will be about 265,000 sets, and the market size will be about 2.82 billion yuan.
5 Investment analysis
Population growth and per capita income have increased, and the demand for grain has shown a trend of both quantity and quality; while the area of arable land is basically stable, the available agricultural labor force is declining, and the high cost of agricultural production is difficult to limit the increase in grain supply. The contradiction between the supply and demand sides is becoming increasingly acute, and it is necessary to improve agricultural efficiency through science and technology. In addition, the mainland government has continuously increased its agricultural support for many years and given key support to intelligent terminals; the rural communication network and mechanization foundation have been relatively perfect, and the land circulation rate has continued to rise, which has cleared the obstacles for large-scale mechanization and precision operations; the price of agricultural machinery auxiliary driving equipment will drop sharply in 2021, and the industry penetration rate is expected to increase rapidly.
Precision agriculture is the first stop on the journey of smart agriculture. In the long run, with the continuous landing of application scenarios, the prosperity of the smart agriculture industry is expected to continue. In the medium term, considering the maturity of technology and the current situation of mainland agriculture, we believe that precision agriculture with unmanned equipment as an important carrier and high-precision positioning technology as the core technology is expected to take the lead in landing and realize the automated operation of simple agricultural affairs. From a short-term perspective, combined with the market situation, we believe that the sales volume of auxiliary agricultural machinery in precision agriculture has shown a significant inflection point, and the subsequent price reduction measures of auxiliary driving equipment manufacturers are superimposed, and auxiliary agricultural machinery is expected to start rapidly.
(This article is for informational purposes only and does not represent any of our investment advice.) For usage information, see the original report. ）
Featured report source: [Future Think Tank]. Future Think Tank - Official website