Antitrust law’s regulations on scale management in China’s new agricultural industrialization system

Abstract

The key to the success of a new agricultural management system is to create new types of operators of agricultural management and to reform the traditional model of agricultural operation, taking a more efficient approach to the scale, industrialization, and organization. However, anticompetitive market risks have the potential to exist in large-scale agriculture due to the excessive concentration of agricultural resources. Chinese legislators should turn competition policies into laws, determine the scope of agricultural exemptions, and learn from US anticorporate farming laws. Utilizing these strategies, antitrust laws can help guide and protect the design and implementation of the industrial polices in the new agricultural management system, rationally regulate some anticompetitive behavior in the agricultural market, and enhance the overall competitiveness of the agriculture industry as well as cater to the interests of the farmers and the welfare of consumers.

Keywords

Agricultural market reform competition law enforcement agricultural exemption

Introduction

The establishment of a new agricultural management system in recent years represents an important reform in the agriculture development in China. This management system is responsible for determining the basic requirements as well as the means to meet the scale of management in the development of modern agriculture. The policies put forth by the government of China are playing a leading role in the development of different forms of moderate-scale agricultural management in order to accelerate the modernization of the agriculture industry in an effort to meet a comprehensive goal. It is vital that it should cultivate family farms, large professional households, farmer cooperatives, agricultural leading enterprises, and other new agricultural business entities. Different types of new agricultural services should be supported, including combined farming, land trusteeship, and other specialized large-scale operations. This new model of industrialization of the agricultural management system can replace the traditional small household contract management system, resulting in economies of scale for production. Even with little to no change in production efficiency, large-scale agricultural production is an effective strategy to generate high economic profits. However, serious consideration needs to be given to ensuring the economies of scale on the basis of the overall modernization of agriculture and how to enhance the competitiveness of Chinese agriculture in the world. From the perspective of antitrust laws, law enforcement agencies and courts should regulate capital investment, out of control scale management, and monopolies, all of which infringe upon consumer welfare and undermine the competitive market.

This article is comprised of four sections. The first part analyzes the necessity for scale management in the development of agricultural industrialization. The scale operation effect in the rural land of China has been remarkable since the development of economies of scale in agriculture. There have been many types of large-scale agricultural business entities in recent years. The second part analyzes the role of antitrust laws in agricultural scale management. In the agriculture market, anticompetitive practices would be put in place if there were no moderate control of agricultural scale management. The US anticorporate farming law is a good reference for Chinese agricultural legislation. The third part introduces selected Chinese policies aimed at promoting agricultural scale management. Industrial policies of their own are not enough to solve the possible anticompetitive practices in the Chinese agriculture market. The forth part presents the strategic thinking behind the legislation and the implementation of antitrust laws in agricultural scale management. Legislators and enforcement agencies should rationally limit capital concentration in the agriculture market, clarify the specific scope of agricultural exemptions, and set up a dynamic balance between competition laws and competition policies.

Necessity for scale management in the development of agricultural industrialization

The connotation of the new agricultural management system is to vigorously cultivate and develop the new operators of agricultural management. On the basis of household contract management, it is best to set up the agricultural management system framework that large professional households, family farms, farmer cooperatives, and agricultural industrialization leading enterprises are the backbones and other agricultural entities are complementary (Editorial, 2015b).

The term “new” is referring to the goal of traditional household contract management in developing various types of agriculture moderate-scale operations, as opposed to a small-scale decentralized management of the “households.”

The Chinese government is carrying out “New Farmland Reform” in order to set up a new agricultural management system which will promote large-scale circulation of agricultural land. The new farmland reform in China means that the traditional right to farmland contractual management is divided into two, the right to contract and the right to management. Both are new and independent property rights. In other words, the rural collective economic organization is the owner of farmland; and the farmers have the right to contract; and the operators have farmland management rights. According to the relevant statistics, by the end of 2015, the national area of cultivated land transfer was about 443 million acres, which accounts for 33.3% of the total contracted farmland area (Han, 2016). In recent years, more than 200 million contract farmers continue to transfer their farmlands. “By June 2015, the number of farmers who have more than 50 acres of farmlands reached 3.41 million” (Chen, 2016). “The number of farmers has decreased, given birth to a large professional households, family farms, farmer cooperatives, agricultural enterprises, and other new business entities”(Han, 2016). This has led to the current situation in China, in which traditional farm households are continuously transformed into the mainstay of scale management. In the process of establishing the new management system, the fundamental reason underlying the change from the traditional single collective economies is the effective, convenient, and large-scale circulation of farmland management right.

Establishing and development of diversified, multi-level, and multi-form management system of cooperatives, social service organizations, and leading enterprises would enhance the intensification, specialization, organization, and socialization of agricultural production and management. The basic agricultural management system has been injected with more lasting vitality (Han, 2016).

In setting up an agricultural scale management model, the fact that almost all market players recognize that the economies of scale can bring about high efficiency is an important element. The continuous presentation of agriculture policies by the Chinese government is an effective means in propelling the industrialization model. However, in order to improve the economic efficiency in the industrial management, it is necessary to confirm the property rights of the farmland. Only the proper right distribution will avoid the confusion and controversy in agricultural management. The basic goal of the “New Farmland Reform” is to strengthen the collective ownership of farmland and to ensure stable contracting of farmer households. Additionally, it confirms the lawful status of farmland management rights. It realizes the relatively clear policy arrangement of the property rights of farmland and provides both constraints and incentives to farmland operators. Through the effective policy arrangement, we can realize the rational allocation of agricultural resources and experience a continuous improvement in the output efficiency. A clear property right structure of agricultural scale management can effectively enhance the economic benefits of the whole market.

First, expanding the scale of agricultural management is beneficial in reducing the average cost with an increase in output. Along with the enlargement of the scale and the strengthening relations with other scale operators in relative regions, information costs and management costs will also be gradually reduced. Considering that the scale interest is the cost interest, the competitiveness of their agricultural products will increase. Second, “agricultural scale management is conducive to improving agricultural and labor productivity, is conducive to further improve the grain commodity rate, and is conducive to increase farmers’ income” (Yu, 1994). Data collected and analyzed regarding farmland scale management from various regions of Heilongjiang Province in China have resulted in some experts determining that “expanding of the household management area has a positive effect on the total productivity of agriculture, which indicates that there are economies of scale in farmland management” (Liu and Liu, 2007). Through the continuous concentration (consolidation) of land in an effort to improve the scale of planting and breeding, scale operators can increase the scale benefits themselves, along with raising the total output of agricultural products simultaneously.

Third, by increasing production and increasing income, when the agricultural industrialization model is fully implemented, with a variety of policies, such as technology, climate, and other factors together, this will bring about improvements in agricultural macro-efficiency, which will increase the national grain production and the ability to reduce the risks of famine. Since 2004, Chinese grain production has increased steadily with total grain output in 2015 reaching 621.435 M t. In addition, according to agricultural household sampling surveys and comprehensive statistics collected regarding agricultural production and management units in 31 provinces (China National Bureau of Statistics), the national grain planted area, unit area yield, and grain output have all maintained growth momentum in 2015 (Editorial, 2015a).

Role of antitrust laws in agricultural scale management

In contrast to the small-scale decentralized family agricultural management, the industrialization model has obvious advantages. At the same time, as a new model of agricultural production organization, there exists a few possible conflicts with sustainable agriculture; this model focuses on the commercialization of agricultural production, seeking to maximize profits of the agricultural market players. Regardless of the high risks in the agricultural industrialization process, where high production concentration would result in wasted natural resources and break up the environmental balance, the involvement of large leading enterprises is enough to result in serious anticompetitive conflicts, manifesting as many other problems. Anticompetition would break up the basic balance of the agriculture market, seriously affect the competitive behaviors of the other agricultural market players, and would ultimately result in serious violations of the interests of the common farmers. Pursuing anticompetition to maximize profits may also lead to short-term and opportunistic phenomena in agricultural management.

Unregulated scale management would result in anticompetitive problems

The scale of agricultural industrialization is based on the relevant sites of farmland. Due to the need for land concentration consolidation, small-scale households themselves cannot afford huge financial debt to support a large-scale centralized integration of operations. On the contrary, large companies with strong financial resources are fine. Therefore, agricultural scale management is capital intensive and emphasizing the management-centered. The goal of capital should be to control the agriculture market and to pursue profit maximization, which is the same as the capital priority present in other markets. In such a standardized production process, the scale of agricultural management will show the layout of resource consumption; protecting the environment and resources would be ignored by the operators in order to maximize profits. In this kind of business model, agricultural scale operators often put too much emphasis on productivity, economic efficiency, and competition.

An agricultural scale management model can result in numerous agricultural entities controlling almost every aspect of the production, processing, and marketing (Heffernan, 1999). For example, Cargill and ConAgra, two of the largest food processing corporations in the United States, produce their own animal feed and process their own livestock (Bittman, 2008). Also, in 1950, 95% of poultry farmers were independent producers (Levy, 2000). However, in 1994, 99% of all poultry production in the United States was produced either through contracts with independent farmers or directly by corporate facilities (Ollinger et al., 2000). The current state of development has led to the vertical integration of the US agricultural market; this means that a large corporation can control the majority of the agricultural output process. This model is generally considered to be efficient because it can reduce production or supply risks and avoid a large number of imports, thus ensuring national economic benefits. Taking these benefits into account, if the government does not regulate the operations in this model and/or excessively encourage the scale of operation, it is clear that the vertical integration of industrialization will become a universal behavior and reduce competition. Vertical integration would likely force some small-scale agricultural households, or other entities, out of the market. If they refuse to leave the market, they would be forced into unfair agreements, which would be an obstacle in the development of sustainable agriculture. At the same time, a monopoly agricultural corporation can also rely on the capital advantage to create horizontal concentration, which can also undermine the market competitive order.

The competitive order in the agriculture market is not destroyed by the traditional farm households, who are at the end of the industrial chain and cannot monopolize the agriculture market. Only when the agricultural setting is invaded by social capital investments, destructive anticompetition appears. Capital will take advantage of the agricultural scale operations as a way to pursue maximizing the profits of agricultural products. The alliance between agricultural corporations and financial capital often results in breaking the basic balance of agricultural industrialization. Under the control of financial capital, the scale management has become a veil, disguising anticompetition. Capital tries to control the agricultural market by making use of the government agriculture policies, even to guide the development of the agricultural economy.

Study on US anticorporate farming law

The United States has been a success story in agriculture industrialization. However, the legislation in some states primarily promotes family farms and not corporate farms. Currently, nine states have laws prohibiting corporate farms, including Kansas, North Dakota, South Dakota, Minnesota, Iowa, Missouri, Wisconsin, Oklahoma, and Nebraska (NALC, 2016). “Family farm corporations” are exempted from this ban in six of the nine states (NALC, 2016). In order to attain the family farm corporation status, there is a requirement that family members, related in at least the fourth degree of kinship, must own more than 50% of the voting stock (Harbur, 1999). No mutual shareholding is permitted between corporations. The shareholders of such family farm corporations can only be natural persons, and the number of natural person shareholders cannot exceed the statutory limits: Iowa (25), Kansas (15), Minnesota (5), South Dakota (10), and Wisconsin (15).” (Harbur, 1999). An Iowa family farm corporation must derive at least 60% of its revenues from farming (Harbur, 1999). In addition, some states have also specifically limited the size of the farms, that is, the corporation farms must meet the proper scale or they will be deemed illegal, and they don’t have the ownership of the land. For example, Minnesota has limited authorized farm corporations to 1500 acres (Harbur, 1999).

The US agricultural industrialization model clearly adopts a modest scale strategy. The purpose is to prevent large corporations from making use of large sums of capital in order to undermine the agriculture market. US Anticorporate Laws are also designed to protect the family farms because the competition laws and policies can reduce the possibility of market monopolization as well as the excessive use of agricultural resources. The US agricultural policies are put in place to ensure full competition and the safety of agriculture development by restricting the types and the scale of the agriculture entities. It should be noted that the corporation itself is not evil; the corporation is a type of business entity that can improve welfare for modern society. The laws and policies attempt to minimize the adverse aspects of corporations. Of course, not all states strictly limit the existence of corporation farms. Federal laws also cannot prevent agricultural corporations from investing abroad in order to engage in agriculture business. Agricultural cooperatives and associations are also exempt from antitrust laws and enjoy a certain number of privileges, such as the concentration of produce or poultry business, and price-fixed transactions. Additionally, while ensuring the competitiveness of agriculture in the relevant market, all forms of agricultural scale management can promote the development of agricultural industrialization. However, from the perspective of small-scale family farms, prohibiting large capital investment and preventing excessive market concentration are the basic solutions in protecting farmers’ benefits and remain a priority and an important foundation in agriculture development.

Contradiction between competition policies and agricultural industrial policies

Establishing a new agricultural management system is inseparable from the promotion and perfection of agricultural industrial policies and is closely related to the role of the competition laws and policies. In many cases, competition policies are viewed as the obstacle to the implementation of industrial policies. Many governments, including China, have adopted industrial policies in an effort to achieve the development of their related fields or industries. Competition policies would not be used to resolve economic disputes until anticompetitive practices arise. Even industrial policies have prioritized practices that improve economic efficiency and national security. In agriculture, although there is the agricultural exemption rule in antitrust law, competition laws and policies are not completely abandoned by the agricultural agencies. Competition policies are concerned with antitrust and consumer welfare, whereas industrial policies are concerned with economic efficiency, trade freedom, and the particular protection to the national market, of course not ruling out the probability of rent-seeking by interest groups.

With the development of agricultural industrialization, the Chinese government has presented various industrial policies, including the agricultural scale management system, which is a very efficient policy and relies on many leading enterprises to complete, accompanied with a lot of financial subsidies. However, there is also the risk of a monopoly, because large-scale agricultural enterprises, such as leading enterprises, would coerce the government into supporting measures leading to large profits and force small-scale farmers out of the market. The most serious, agriculture consumers would lose the option of having any influence on the products in the market. This excessive scale management is contrary to competition policies. Its short-term goal appears to enhance overall agricultural competitiveness; however, in relation to the long-term goal, there is the risk of sacrificing the potential for innovation and sustainable development in agriculture. Therefore, the policies of the agricultural industry need to be guided by and supported by the competition policies. The presentation and implementation of effective industrial policies require that they play a critical role in combination with the competition policies (Zhang, 2014). In the agriculture market, through the role of competition policies that enable full competitive vitality, the government can use the agricultural industrial policies to complete long-term agricultural industry optimization and upgrading.

Antitrust laws’ minor part on agricultural scale management system

With the trend toward agriculture modernization, cultivating the new operators and the innovation of the management model are the two key factors in setting up the new agricultural management system. In China, it seems that the agricultural policies are a top priority. The relevant laws have not made the corresponding adjustments in a timely manner. In the operator types and the operation model, there are some inconsistencies between the laws and the policies. Most notably being that the antitrust laws are rather conservative. The lag time of the legal system is very obvious, partly because of the decisive and powerful leading force of the policies.

Cultivating new types of agricultural scale operators in policies

The key point underlying the new agricultural management system is the selection and cultivation of the main types of operators. Large professional households, family farms, farmer cooperatives, and agricultural enterprises, according to the policy documents put forth by the government, all qualify to be in the agriculture market. In recent years, the policies of the Chinese government regarding agricultural scale management added up to no less than a dozen; of course, this did not include the supporting policies of many local governments. At the policy level, the government constantly emphasizes the modernity and advancement of the above-mentioned new-type scale management entities in different industrial policies, encourages the overall improvement of the traditional family farm model, and continuously updates the main types through joint-ventures and mergers. The policy effect is immediate. Within a few years, the development of the new-scale agricultural entities in China is proving to be prosperous. There are about 79,000 farmer cooperatives, and there were 106,000 family farms in the Heilongjiang Province by the end of 2015 (Zhang, 2016a). The total number of new agricultural management entities reached 158,500, of which 97,000 were farmer cooperatives, 16,000 family farms, and 39,000 were large grain producers in the Henan Province by the end of 2014 (Dong, 2015). By the end of 2015, the number of agricultural industrialization leading enterprises reached 9300 in the Shandong Province (Zhao et al., 2016). Overall, in 2015, the number of farmers who had farmland consisting of more than 50 acres reached 3.4 million, of which 8.77 million were family farms, 153 million were farmers cooperatives, and 126,000 were leading enterprises (Zhang, 2016b).

Policy innovation in the new mode of realizing agricultural scale management

Through land transfer, the farmers union, and business combination, the new agricultural scale management system already had the “players” element. In effect, the scale management model is the typical symbol of agricultural industrialization. Therefore, the government of China made positive efforts and exploration through industrial policies. On the one hand, through the land transfer, land shares, land trustees, joint farming, the unified management of cooperatives, and other forms, scale operation can produce economies of scale (Zhang, 2016b) and plays a leading role in optimizing the land, capital, environmental, and other factors. On the other hand, it is also a better way to optimize the labor force that will be useful in developing the scale standards and the technical standards of the leading enterprises and farmers’ cooperatives. In short, the modern agricultural industry system should be competitive, with the integration of production, processing, transportation, storage, and sales. In an effort to speed up the realization of such an industrial layout, the relevant administrative agencies have also introduced a series of price subsidies, financial, and insurance policies. The government of China can realize the convergence and linkage of fiscal policies, financial policies and the development of the agricultural industry, underlying the supporting force of the fiscal (government)capital, financial (private) capital, and social capital (Zhang, 2016b). In September 2016, the Ministry of Agriculture and the Agricultural Development Bank of China signed “a comprehensive agreement to support agricultural modernization and strategic cooperation.” The Bank would strive to give no less than ¥ 3 trillion to support the development of agriculture over the course of the Chinese “Thirteen Five-Year” period. One of the key points of cooperation between the two parties is to “cultivate new agricultural management operators and promote agricultural sustainable development” (Editorial, 2016).

Antitrust laws and policies have a minor effect on regulation of agricultural scale management

In the process of establishing a new agricultural management system, the driving and leading role of industrial policies are to direct and be positive. However, the legal system cannot be as flexible and timely as government policies. Considering that the Chinese legislation pattern and the implementation mechanism are completely different from the processes that lead to the making of policies, combined with the stability, it is reasonable that the laws sometimes cannot keep up with the pace of economic development and need to be adjusted. At present, all of the legal rules concerned with the development of agricultural scale management are unavoidably in need of revision and adjustment.

In the implementation of industrial policies, the new types of scale operators do not need to exclude the involvement of capital, however, but strict regulations are highly encouraged. Considering that the leading enterprises rely on capital strength to expand their size, it is entirely possible that they would become the “financial + agribusiness” oligarchic enterprises whose market share exceeds any antimonopoly standard, by virtue of governmental and financial support. This situation may not arouse resentment for the government; in fact, it may be a good thing, to an extent, that they can maintain control of the local market to prohibit the penetration of foreign corporations, as well as the corporations in the European Union, United States, and other major agriculture competitors. In the highly competitive international agriculture market, antitrust laws also take a protective attitude; the agricultural exemption rules can shield such enterprises from strict antitrust scrutiny. The primary goal of the general rules of antitrust laws is to promote agriculture development. No antitrust law is in place to prevent and regulate anticompetitive practices in agriculture market and no antitrust law has any substantive definition or qualification on the industrial scale and organizational pattern of the agricultural operators. Does the development of the new agricultural management system not need antitrust laws and policies to protect it?

Antitrust laws’ strategic choice in agricultural scale management

In agricultural economic development, whether an effective industrial policy or an active market participant, both must follow comprehensive and targeted laws and regulations. The laws not only guide and escort the policies of the agricultural industry but also define and protect the market and social rights of the participants in the agriculture market. Although the legal system is not as specific as the agricultural industry policies, these polices should have the standard operating procedure in agriculture development as well as laws. In particular, antitrust laws should not remain silent on market supervision. Antitrust laws should do a good job of providing a “visible hand”, playing the important role to intervene moderately in and safeguard the economies of the agriculture scale, and adjusting and regulating unreasonable, anticompetitive practices and behaviors.

Reasonable restrictions on capital penetration and occupation in agriculture market

Establishing the new agricultural management system is a comprehensive engineering system, in which the new types of operators and new changes in the management model are the important constituent elements. In short, the most prominent policy change is the “new” acceptance and breakthrough. The main types and the model of management need be removed from the great achievements of small-scale households’ economies in order to match up with the new agricultural industrialized development model, in the development of an intensive, large-scale, low-cost, and high-efficiency sustainable agriculture. In this “new” road, the scale growth and the integration of the agricultural operators have become a trend, and if anyone has the desire to complete this growth and union at a rapid pace, the power of capital should not be underestimated. Capital can aid the agricultural scale management in increasing the developing speed, and it can improve the efficiency. However, the fact that capital often has the profit-driven ambition covered by a veil cannot be denied. Capital aids in the rapid development of agriculture, while at the same time, its complex sources and composition have the capability of masking serious dangers. If there were no legal system, including reasonable competition policies, monopoly capital is likely to rely on its advantage in making the full range of occupation and domination of the regional related produce or livestock markets. In a situation such as this, agricultural interest groups that are rent-seeking from the government are likely to become a reality. The farmers’ benefits and the welfare of the consumers will be seriously threatened, and the market will lose competition and equity.

Therefore, the government cannot ignore the possibility of anti-competition in the rapid completion of agricultural industrialization. Legislators may refer to the anti-corporate laws of some US states in order to set new rules for the scale management of the Chinese domestic agricultural economy. For example, a series of separate rules to set the upper capital limit of agricultural corporations, to set the upper limit of the farmland area occupied by the operators, to set the largest member size of merger or joint entities in the same type and in different types of agricultural businesses, to set the longest time for the performance of the contracts on fixing prices, to set the largest ranges for the contract performance on dividing markets, and so on. These measures can effectively restrain the abnormal agricultural monopoly advantages in an effort to prevent small-scale farmers from being substantially infringed upon, with the aim of maintaining free competition and the stability of the welfare of consumers in the agriculture market.

Scientifically refining application and scope of antitrust agricultural exemption

In the agriculture field, the exemption rule of the antitrust laws is a powerful legal guarantee for the scale management of agricultural industrialization. Antimonopoly Law of the People’s Republic of China (Article 56). This Law is not applicable to the association or cooperation by agricultural producers or rural economic organizations in their business activities of production, processing, sale, transportation, storage of farm products, and so on. Antitrust laws should be applied to the field of agriculture. However, because there are some reasonable factors, such as certain political, economic, and social reasons, resulting in legal trade-offs (Zhao, 2014), agricultural exemptions are almost invariably adopted throughout the world.

Setting up a new agricultural management system is an important strategy for the development of “agriculture, rural areas, and farmers.” Faced with the potential of anticompetitive risks in the implementation of industrial policies, the agricultural exemption rules should scientifically and rationally clarify their specific scope and carefully define the boundaries and scales of “joint or cooperative behaviors” in order to prevent the emergence of vicious anticompetitive behaviors. The scope of the agricultural exemption is limited to “coalition or synergy” and therefore does not mean that all agricultural anticompetitive practices can be exempted. Monopolies, administrative monopolies, conspiracies, and other misconducts that may, or could attempt to, distort competition (such as price discrimination, unfair terms, compulsory bundling, forced tying, limited or compulsory trades, and so on must be regulated by antitrust laws), especially maliciously grabbing the monopoly profits of the joint or collaborative ventures, cannot be exempted and must be strictly prohibited. Agricultural exemptions should reasonably protect appropriate joint or cooperative ventures. Antitrust laws should resolutely sanction the relevant agricultural market entities which relied on “some special factors” in order to form an exclusive market share of the state to control the markets, that is, an administrative monopoly. In this manner, antitrust laws can promote and guarantee the implementation of industrial policies, provide stability to the needs of the people, improve the competitiveness of the agriculture industry, and ease the pressure on agricultural imports. As the primary industry the agriculture industry should be strong, stable, and safe.

The agricultural exemption rule should not just be the refinement of defining the anticompetition itself; it should also clarify the specific application agencies and procedures. Considering that authorized antitrust enforcement agencies are likely to have access to adequate agricultural resources and data, using scientific analysis to measure the structural differences and the essential differences between moderately large-scale operations and illegal cases, makes it logical for these agencies to make a decision on the basis of deterministic legal rules and procedures. At the same time, the agricultural exemption should also have explicit judicial procedures. The court system should allow the stakeholders to present any disagreements to the exemption, which will aid in balancing the checks and reliefs of the competition in agriculture.

Rationally establishing the dynamic balance between agricultural industry and competition policies

Both industrial and competition policies, as a conduit of governmental regulation of the market failure, have the same basic goal. However, because of the different measures taken, there is always a big contradiction between the two. On the issue of “agriculture, rural areas, and farmers,” the government of China has vigorously cultivated the new operators of scale management through the industrial policies. This “natural” intervention can be attributed to the mainstream strategy of agricultural economic development. Therefore, on the surface, the agricultural industrial policies have a priority over the competition policies. However, from the value of the law, the competition policies should be the final means of economic regulation and control. When the industrial policies are stubborn, the competition policies should be applied in order to prohibit the faults (Qi, 2003). The relationship between the two is affected by historical factors, that is, in different time periods, as well as in different regions, there are the different influences between the two, limited by the political and economic situations. A short-term priority or inferior priority is just a fragment of the process of economic development. The relationship between them would not be static and would have new adjustments along with the changing economic situation. The dynamic balance between the two is the normal state in economic development.

For the policies, the most effective means of implementation is to transform them into law. As for the competition policies, the road of legalization appears to be more socially significant. Clear, scientific, strict, and perfect antitrust laws should be what the economic management laws are founded upon. It is possible to completely change the current problem, in which the government of China has attached too much importance to the policies and neglects the laws. For establishing the new agricultural management system, an agricultural economic development strategy in line with the fundamental interests of farmers that the government formulates and implements on the basis of the values of antitrust laws that encourages competition and protects the welfare of consumers’ needs to be implemented.

Conclusion

In order to meet the goals of agricultural development, the government of China should gradually realize the proper scale, industrialization and modernization of agricultural management, increase the overall agriculture competitiveness, and raise the income level of farmers. Antitrust laws still need to exert more influence in the field of agriculture. The legislators should gradually bring out the legalization of competition policies, revise more specific and detailed rules, and guarantee the implementation effect of agricultural industrial policies. Only in this way, we can promote the transformation and upgrading of the agriculture market and create a situation that is beneficial for both competition and efficiency.

Footnotes

Acknowledgement

The author would like to express her gratitude to her supervisor, Professor Keith N Hylton, in Boston University School of Law, for careful guidance and support regarding the structure and specific details of the article.

Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This research was funded by a Chinese postdoctoral science foundation project “Impact of Antimonopoly Law in the Development of Agricultural Industrialization from the perspective of interest balance” (2014M551204).

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