"Whoever controls oil controls all countries."
This is a very famous sentence said by our "old friend" and international strategy guru Kissinger, but there is also the second half of this passage that is not well known:
"Whoever controls the food controls the human race."
At present, the world's four major multinational grain merchants in ABCD control 80% of the global grain trading volume - they are the United States ADM (A), the United States Bunge (B), the United States Cargill (C) and the French Louis Daf (D). The British "Guardian" even commented: "As long as you live, you can't escape the big four".
Four foreign food giants
In China's agricultural sector, foreign giants are also in a dominant position.
Take, for example, the seed industry, which is at the forefront of agricultural production. In addition to staple grains such as wheat and rice, domestic seeds are still holding their ground; in the soybean field, foreign seeds have captured 86% of China's market share; in the corn field, domestic seeds and foreign seeds are basically "half to half".
Among the vegetable varieties, the imported seeds of carrots, spinach, onions and high-end tomatoes account for more than 90%; the external dependence of beet and ryegrass (forage) seeds reaches more than 95%.
The seed industry is at the forefront of the agricultural industry chain
The supply of foreign seeds is in short supply, so that there is a situation of "imported grain sales, domestic sales". Seeds, like chips, have become yet another field of technology that has been "stuck in the neck" by foreign countries.
Imagine that once foreign grain merchants cut off the supply of seeds to us, Chinese cannot eat vegetables, raise pigs, cattle and sheep, and can the rice bowl of 1.4 billion people be preserved?
And how should our domestic seeds solve the backward situation in the past few decades, rush out of the predicament, and reverse the situation?
The "Fall" of China's Seed Industry
China has a long history of developing agriculture and cultivating seeds, as early as 4,000 years ago, there are records of Emperor Xuanyuan planting grains.
However, 100 years ago, when China was in a war-torn era, foreigners snatched China's high-quality seeds and cultivated their own seeds, so that we began to lag behind in seed technology.
Take soybeans, for example.
In 1898, 1925, 1927, and 1931, the United States sent people to various parts of China to investigate and collect wild soybeans. In the end, more than 2,000 copies of wild soybean materials were collected in northeast China and other places to study.
The Americans took advantage of the war in China to collect seed resources
American studies have found that although China's soybean production is high, the oil yield is very low. So several companies in the United States joined forces to transform it on the basis of Chinese soybeans, and eventually became genetically modified soybeans that are now higher than oil.
When China joined the WTO in 2001, we were forced to open our own agricultural market in order to allow foreigners to open up the market for industrial products to us.
At this time, china's highly fragmented "small agriculture" and the United States' modern "big agriculture" are far apart, while western giants like to do things that "take advantage of your weakness and want your life". With advanced technology and huge funds, they entered China and successfully kidnapped China's grain market with a set of "combination fists".
What is this set of "combination punches"?
First, Western food giants have used strong funds to acquire midstream and downstream food companies.
Taking the oil and fat industry as an example, within a few years, the four major multinational grain merchants controlled more than 75% of China's oil market and edible oil supply. Among China's 97 large oil and fat enterprises, multinational grain merchants have participated in the holding of 64.
Since then, Western-controlled downstream companies have bought soybeans from farmers in large quantities at prices above the state's protective price. Of course, these soybeans must use foreign seeds to lure Chinese farmers to use them widely, and also create a situation where foreign seeds are "in short supply".
In this way, the genetically modified soybeans in the United States on the market have slowly replaced the traditional soybeans in China.
However, Western grain merchants buy soybeans at high prices, not in vain to subsidize Chinese farmers, they will use legal means to restrict farmers' self-retention of seeds, although most countries' laws protect farmers' right to keep seeds, but self-retained seeds can not be used for sale, and seeds must also pay patent royalties.
This has also contributed to the frequent emergence of "decks", "white bags", that is, fake seeds, giving the giants a handle for litigation.
However, after a few years, the international oligarchy lost the patience to defend his rights and fight lawsuits everywhere. They once again used their technological advantages to develop the "gene utilization restriction technology", that is, the "biological lock" technology.
What is a "biolock"? There are two technologies, one is sterile, farmers naturally can not keep seeds, and the other is control technology, so that the next generation of seeds are not as functionally inferior as the previous generation. In this way, the peasants were forced to buy foreign seeds.
To make matters worse, Monsanto, infamous for its extensive use of cancer-causing herbicides in the Vietnam War, has also developed seeds that can "bundle pesticides," such as glyphosate-resistant soybeans and corn varieties.
Monsanto is also notorious abroad
Because glyphosate is widely applied by farmers to inhibit weed growth, Monsanto's soybean and corn varieties leave more glyphosate, which is harmful to humans and cannot be sold.
As a result, farmers have had to buy more expensive Monsanto-only pesticides, and the already small profits have been eroded a lot. And after Monsanto's exclusive pesticides were applied, many domestic seeds could not survive, further kidnapping China's farmland.
To this day, our native seeds have fallen completely. According to the "Third National Census of Crop Germplasm Resources", in 375 counties in 6 provinces and regions such as Hubei, Hunan and Guangxi, 71.8% of the local varieties of grain crops have disappeared, including many high-quality, disease-resistant, barren and thin characteristic varieties, and the protection situation of china's indigenous germplasm resources is grim.
Domestic seeds "see the light to die"
To make matters worse, in the face of the invasion of foreign seed industry, the research and development of China's own seed industry has been hindered.
Because Western food giants have established extremely high technical barriers, China's seed technology has always been in a backward situation, and the new seeds developed cannot be sold.
For the Western giants, they have entered a virtuous circle of "R&D - sales - making profits - attracting more talent funds - accelerating the speed of research and development".
But for China's agricultural technology companies, we are caught in a vicious circle of "R&D - can't sell - loss - loss of talent funds - slowing down the speed of research and development".
In 2020, the R&D expenditure of the top 50 seed companies in the country is still less than 1/7 of Monsanto's. The main cost for Chinese seed companies is to maintain sales channels, that is, to "do marketing".
From the perspective of research and development funds, the domestic seed leader "Longping Hi-Tech", took 400 million yuan for research and development in 2019, accounting for 13.15% of the revenue, which is already the ceiling of domestic seed companies.
The revenue of Chinese seed companies is only a fraction of that of the Western giants
From a more macro point of view, during the "13th Five-Year Plan Period", the proportion of China's agricultural science and technology expenditure in agricultural GDP (that is, the intensity of agricultural scientific research investment) was only 0.71%, lower than the international average of 1%, while the investment intensity of agricultural powers was generally around 3%-5%.
Every year, China will register hundreds of domestic seed species. Just in November 2020, the Ministry of Agriculture approved 574 rice varieties, 802 corn varieties, 48 soybean varieties, and 26 cotton varieties.
From the perspective of quantity alone, the number of new domestic varieties is increasing every year, but there are very few competitive and breakthrough varieties. Some experts pointed out that more than 80% of the approved varieties are catching up with and repeating the Western technical route, and have no promotion value.
China's agricultural technology companies have fallen into the vicious circle of "the more research and development, the more loss-making", "the faster the research and development, the faster the company dies", so that the industry lacks powerful large companies, and young people are reluctant to join the field of agricultural science and technology.
Looking at today's university admission score lines, we can see that all universities with "agriculture" have the lowest admission scores in the same grade; all majors with "agriculture" have the lowest admission scores in the same school.
So far, In China's rice, wheat and other staple grain seed fields, it is still holding its ground in the face of the attack of foreign seeds, and it is necessary to fully thank Yuan Longping and the older generation of agricultural scientists.
If it were not for a large number of agricultural workers represented by Yuan Longping, who voluntarily gave up a good life and burned themselves for China's food security, China's staple grain seeds might one day fall.
The position of holding the main grain seed position is due to the selfless dedication of the vast number of agricultural workers
Seed research and development is a large project with a cycle of about ten years, and the road to science and technology innovation is not reached quickly. Foreign companies rely on technology and talents, accumulated decades of first-mover advantage, not the domestic seed industry enterprises can catch up overnight.
To this end, we must think of some alternative means to reverse the situation of general loss of money for domestic seeds in one fell swoop.
Acquisition of Syngenta's "Thrilling 50 Days"
While China's private seed companies are stubbornly resisting, our national team is also running around.
Just on July 2, ChemChina's "Syngenta Group" announced that it would land on the Science and Technology Innovation Board and intend to raise 65 billion yuan. This is the largest A-share IPO since 2010, and Syngenta has an estimated market value of more than 300 billion yuan, or it will become the largest IPO since the opening of the Science and Technology Innovation Board.
Many people don't know syngenta as a company, but in the agricultural sector, it's a well-deserved giant.
Originating in Switzerland, Syngenta is the world's largest pesticide and the third largest seed agrochemical high-tech company, with pesticides and seeds accounting for 20% and 8% of the global market share respectively; its global R&D team has more than 5,000 people, 119 R&D bases, and the annual R&D investment totals more than RMB 9 billion, accounting for about 10% of annual sales revenue, with more than 13,000 patents worldwide.
Swiss agrochemical giant Syngenta
In other words, "just one First Zhengda is equivalent to recreating two Chinese seed industries."
How did such an agricultural giant get into the pockets of Chinese companies in the first place? I have to say that this is also a kind of historical luck.
In 2014, the global grain market was sluggish and food prices generally plummeted by one-third. Negatively affected by the general environment of the grain market, Syngenta's revenue declined and continued to lose money. In order to save the loss, Syngenta, like many agrochemical giants, hopes to complete the restructuring by selling assets.
In 2015-2019, international food prices entered a trough
In April 2015, Monsanto first offered an acquisition for $34 billion. Once its acquisition is successful, a giant will be born in the field of agrochemicals, and it will be more difficult for Chinese agriculture to resist foreign invasion.
Therefore, ChemChina decided to enter the market, we made a higher offer, and Syngenta also intended to "marry".
However, the scene that was originally full of joy was met with both domestic and foreign resistance.
First of all, public opinion attacked the management of Syngenta in Switzerland, criticizing them for abandoning their "faith".
The morality of Westerners is once again reflected in the fact that when they want to be sold to American giants at low prices, they do not say a word, and when Chinese companies want to increase the price of acquisitions, they pick out and talk about politics and values.
To put it bluntly, capitalist countries will not fail to understand the truth of business and business, they just want to sit on the ground and start from the ground and slaughter more.
In addition to the Swiss asking for a price increase, ChemChina's acquisition of Syngenta has also suffered a lot of criticism in China.
Some retired officials questioned syngenta's genetically modified crops and pesticides as "polluting" Chinese farmland, so they jointly petitioned the SASAC to investigate the Syngenta merger.
At this critical moment, ChemChina resisted the pressure and insisted on promoting mergers and acquisitions, and the State-owned Assets Supervision and Administration Commission also gave the green light to this merger and acquisition case out of the consideration of "food security".
In June 2017, the M&A negotiations that had been talking for several years finally came to an end. ChemChina eventually won Syngenta for $43 billion, and the merger became the largest overseas merger by a Chinese company to date. Due to the twists and turns during the merger and acquisition period, the amount paid by ChemChina was 20% higher than initially expected.
Ren Jianxin, chairman of ChemChina, shook hands with Dai Mori, chairman of Syngenta
However, in hindsight, the merger proved to be extremely correct.
When ChemChina acquired Syngenta, it coincided with the big low point of the global grain market from 2015 to 2019. Although there is a premium at the time of acquisition, the price of Syngenta is not expensive in terms of longitudinal comparison history.
In the second half of 2020, global food prices soared by 50% again, and at this time, Syngenta has made a lot of profits, and if you want to buy it again, I am afraid that it will cost several times the price.
But more importantly, only 50 days after the completion of the merger in 2017, the Trump administration launched a "301 investigation" against China, and since then overseas high-tech companies have completely closed their doors to Chinese investment.
Assuming that this merger is postponed for two months, it is likely to be spoiled by the Americans in the end, and the dream of Chinese realizing "agricultural autonomy" will be 10 years later!
When ChemChina acquired Syngenta, global agrochemical and seed companies were also setting off a wave of mergers, and oligopolies with monopoly positions joined forces.
Monsanto, which was once in the limelight, was acquired by Bayer of Germany, DuPont Pioneer of the United States merged with Dow of the United States, and ChemChina acquired Syngenta, and the three events completed the reshuffle of the global agricultural pattern.
We have finally relied on our own agricultural aircraft carriers to firmly stand in the first echelon of the world's agricultural field.
The world's agrochemical giants have formed four major groups through mergers and acquisitions
end
The significance of the acquisition of Syngenta for China's agricultural security is not only that we spent $43 billion to buy more than 10,000 foreign patents, but also that it has shortened the gap between China's agricultural technology and the world's first-class level.
Since then, standing on the shoulders of giants, the new varieties developed by Chinese seed companies have more possibilities to make money, and are expected to get rid of the dilemma of "more and more research and development and poorer" in one fell swoop.
From this perspective, Syngenta is bound to become a training base for Chinese agricultural talents, just as Fairchild Semiconductor is to the American semiconductor industry and IBM is to the American computer industry.
Chinese agricultural workers who have come out of Syngenta will "gather as a fire and scatter the sky full of stars."
One day, agriculture will become a popular industry for Chinese college students like finance and the Internet, and this day will not be too far away.
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