Coordinated development is a progressive concept advocating for equilibrium, inclusivity, and sustainability across all regions, sectors, and dimensions of development. The approach emphasises harmonious advancement between urban and rural areas as well as primary, secondary, and tertiary industries within rural regions, particularly with regard to "agriculture, rural areas, and farmers," and involves instituting a benefit-sharing system that empowers, supports, and enhances farmers and their livelihoods.

Characterised by extensive information networks and data-driven algorithms, digital technologies promise a profound transformation in traditional industrial linkages and collaborative processes. This evolution unfolds in two significant ways in agriculture, the most traditional of industries. Firstly, it empowers agricultural producers to swiftly cater to diverse consumer demands by producing speciality goods that are more-closely aligned with market needs, thereby facilitating more effective connections between smallholder farmers and broader markets. Secondly, it catalyses an overhaul of entire industry chains, leading to reductions in various costs, which, in turn, fosters deeper specialisation, enhances allocation efficiency, and yields tangible benefits.

Currently, the digital economy has transitioned from innovation and integrated development of digital technology to a stage of deep integration with the real economy. In smart agriculture, data, computing power, algorithms, and other technologies optimise traditional agricultural production by enhancing factor allocation.

Chinese multinational e-commerce, retail, internet, and technology company Alibaba, for example, facilitates comprehensive resource optimisation for small and medium-sized enterprises with its cloud platforms. This integration aims to achieve comprehensive connectivity among products, machinery, data and people. Embracing comprehensive digitalisation leads to agricultural practices being revolutionised, guaranteeing superior produce quality through meticulous control over land conditions, work environments, and input material standards. Utilising cutting-edge technologies such as drones, unmanned orchard robots, integrated irrigation systems, and data sensors, smartphones are transformed into indispensable farming aids that farmers can leverage in order to facilitate real-time weather monitoring, data analysis, and sales projections. These types of digital tools assist with the development of distinct agricultural brands.

Agricultural digitalisation also facilitates effective connections between smallholder farmers and broader markets while catering to diverse demands. The decentralised nature of internet networks aligns closely with the landscape of small-scale agriculture, dismantling the market information monopoly often experienced by smallholder producers. This collaborative framework outsources employment opportunities within production areas and also attracts talents from local villages and beyond, fostering participation in rural economic development. The approach synergises efforts to bolster the industrial system by integrating various entities across supply chains, utilising adaptive technologies and flexible manufacturing to elevate the competitiveness of unique agricultural products. Leveraging the economy of scope concept, it maximises business expansion and capitalises on the long tail effect, which refers to the phenomenon where a significant portion of sales or demand comes from a large number of niche products or items rather than just a few popular ones.

Alibaba's innovative county-level express delivery co-distribution model exemplifies this transformative approach. The model streamlines parcel processing by interconnecting information channels among diverse express delivery firms. The fusion of technology and business expertise culminates in an efficient, convenient, and resilient express delivery system covering counties, townships, and villages, which creates employment and entrepreneurial avenues for farmers in addition to enhancing operational efficiency. A pilot in Huimin County, Binzhou City, Shandong Province, for example, slashed delivery companies' rental costs by 20% to 30% and enabled all of the townships in its borders to witness a notable 15% year-on-year surge in delivery volumes in 2021.

Furthermore, digital finance bolsters rural vitalisation efforts by mitigating traditional credit risks and enhancing financial inclusivity. It bridges gaps left by traditional financial services through innovative products tailored to specific scenarios and data-driven insights, lowering financial service thresholds and operational costs, and features advantages such as reduced costs, rapid transactions and broad accessibility. Digital finance also plays a pivotal role in coordinating the establishment of regional credit reporting systems, thereby enhancing the overall effectiveness of agricultural financing and better serving the needs of agricultural businesses.

Alibaba's MYbank, a digital-only bank, debuted an in-house AI solution that uses satellite remote sensing and image recognition to grant and monitor loans known as Tomtit in 2020, for example. The process is as simple as downloading the MYbank app, granting it information inquiry authorisation, and selecting one's plot of farmland, thus enabling farmers to receive loans within a few minutes. Tomtit  estimates yields and output value associated with a given parcel of land and accurately evaluates risk using publicly available satellite images as well as images provided by farmers, climate data, industry patterns, land registration data from government agencies, and information related to factors affecting crop price and expected crop growth. This unambiguous analysis method makes it possible to provide reasonable levels of credit and appropriate repayment plans based on the risk scores that are generated. Tomtit monitors a loan recipient's farmland using satellite imagery after a loan is disbursed in order to observe the growth and development of the crops that are grown, assess the condition that they are in, and predict any potential risk of loan default. By the end of 2023, the system was able to recognise 15 types of crops and had granted loans to 1.69 million growers across China's provincial-level administrative areas.

Source:

AliResearch

China’s Administration and Management Institute (AMI) of Ministry of Agriculture and Rural Affairs (MARA)