Ministry of Agriculture and Rural Affairs—Reply to the Proposal on Further Advancing Supply-Side Structural Reform in the Fertilizer Sector

I. On further improving the laws, regulations, and standards governing the fertilizer industry, and accelerating the phasing out of outdated production capacity.

In recent years, the Ministry of Agriculture and Rural Affairs, the Ministry of Industry and Information Technology, and other relevant departments have earnestly implemented the directives of the CPC Central Committee and the State Council, vigorously advancing supply-side structural reform in the fertilizer sector. First, efforts to strengthen fertilizer‑related legislation have been intensified. In 2008, the State Council Executive Meeting reviewed the “Draft Regulations on Fertilizer Administration” and, following a recommendation to conduct further research, our ministry commissioned China Agricultural University to carry out an in-depth study on fertilizer legislation. This resulted in a report on China’s fertilizer management system and fertilizer‑related legislative framework, which put forward measures and recommendations for improving the country’s fertilizer regulatory regime, providing valuable guidance and support for subsequent legislative work. Second, the elimination of outdated production capacity has been accelerated. The Ministry of Agriculture and Rural Affairs has vigorously promoted initiatives such as achieving zero growth in fertilizer use and replacing chemical fertilizers with organic fertilizers for fruits, vegetables, and tea, focusing squarely on reducing fertilizer application while enhancing efficiency. By leveraging market forces, these measures have compelled the fertilizer industry to phase out obsolete capacity and optimize its product mix. Meanwhile, the Ministry of Industry and Information Technology, in accordance with the General Office of the State Council’s “Guiding Opinions on Adjusting the Structure, Promoting Transformation, and Enhancing Efficiency in the Petrochemical Industry,” has guided the fertilizer sector in implementing capacity‑replacement projects and refining its product portfolio. Preliminary statistics indicate that in 2016, 2.92 million tons of synthetic ammonia capacity and 4.33 million tons of urea capacity were retired, and a number of long‑dormant “zombie enterprises” exited the market. Third, technological upgrading has driven industrial advancement. The Ministry of Industry and Information Technology has implemented the “13th Five-Year Plan” for the petrochemical and chemical industries, launching pilot projects for million‑ton‑scale synthetic ammonia facilities and initiating smart‑manufacturing demonstration programs in the fertilizer sector, thereby using information technology and intelligent systems to elevate production standards. Fourth, green development has facilitated the industry’s transformation and upgrading. In line with the “Guiding Opinions on Promoting Green Development in the Petrochemical Industry,” industry associations have been guided to develop catalogs of green‑technology processes for the petrochemical and chemical sectors. Some enterprises have explored zero‑emission technologies for the nitrogen fertilizer industry and comprehensive utilization solutions for phosphogypsum in the phosphate fertilizer sector, gradually embarking on a new industrial path characterized by low resource consumption, reduced emissions, and circular‑economy practices.

Going forward, the Ministry of Agriculture and Rural Affairs will work closely with relevant departments to include the Regulations on the Administration of Fertilizers in the State Council’s legislative plan, building on thorough preparatory work. Meanwhile, the Ministry of Industry and Information Technology will continue to implement the Guiding Opinions on Adjusting the Structure, Promoting Transformation, and Enhancing Efficiency in the Petrochemical Industry, rigorously controlling the addition of new production capacity in overcapacity sectors such as urea and ammonium phosphate. It will also leverage advanced technologies—including clean production and intelligent control—to upgrade existing fertilizer‑production facilities, improve product quality, reduce resource consumption and emissions, and enhance overall competitiveness. In parallel, in alignment with the Belt and Road Initiative, the ministry will actively promote international capacity cooperation in the fertilizer sector and encourage Chinese fertilizer enterprises to expand overseas.

II. On Including the New-Type Fertilizer Industry within the Scope of National Strategic Emerging Industries

In recent years, the Ministry of Agriculture and Rural Affairs, in coordination with relevant departments, has undertaken extensive efforts to support the production and widespread adoption of new types of fertilizers. First, policy support has been strengthened. In March 2018, the State Council Executive Meeting decided that, effective May 1, 2018, the value-added tax rate for industries such as manufacturing would be reduced from 17% to 16%. The annual sales threshold for small-scale taxpayers among industrial enterprises was raised from RMB 500,000 to RMB 5 million, and, for a specified period, enterprises already registered as general taxpayers were permitted to re-register as small-scale taxpayers, enabling more businesses to benefit from lower tax rates. Eligible producers of new‑type fertilizers are all entitled to these tax incentives. Second, technological promotion has been accelerated. In 2015, our ministry issued the “Action Plan for Achieving Zero Growth in Fertilizer Use by 2020,” which calls for demonstrating and promoting high‑efficiency new fertilizers—including slow‑release, water‑soluble, liquid, foliar, and bio‑fertilizers—to continuously improve fertilizer use efficiency. Agricultural extension agencies at all levels have strengthened collaboration with relevant fertilizer companies through partnerships with agricultural enterprises, conducting trials, demonstrations, and technology dissemination of new fertilizers across different regions and on various crops, thereby advancing their application. Third, project‑based support has been expanded. Agricultural authorities at all levels, in conjunction with initiatives such as achieving zero growth in fertilizer use, implementing integrated water‑fertilizer management, and substituting organic fertilizers for chemical ones in fruit, vegetable, and tea production, have made slow‑release, water‑soluble, and liquid fertilizers key components of new‑product promotion, providing support and guidance to farmers in adopting these advanced, high‑efficiency fertilizers.

Going forward, the Ministry of Agriculture and Rural Affairs, in coordination with relevant departments, will implement a range of measures to support the production and application of new‑type fertilizers. First, it will refine the standards framework by strengthening communication and consultation with pertinent agencies, industry associations, and fertilizer manufacturers, promptly clarifying the definition and scope of new‑type fertilizers, and expediting the development of a corresponding set of standards to provide guidance for technological and product innovation, as well as for the use of these fertilizers and market regulation. Second, it will accelerate product R&D by organizing research institutes and enterprises to conduct joint efforts, intensify research on new‑type fertilizers, develop innovative fertilizer products, and promote the sound development of the industry. Third, it will step up promotion efforts by actively seeking favorable policies, bolstering cooperation between agricultural enterprises and producers, and encouraging and supporting companies to introduce and apply new‑type fertilizers on suitable crops and in appropriate regions. At the same time, it will enhance dialogue with the National Development and Reform Commission and other authorities to explore the feasibility of including the new‑type fertilizer sector within the national strategic emerging industries.

III. On Reforming the Registration System to Promote the Development of New-Type Fertilizers

Since 2015, the Ministry of Agriculture and Rural Affairs has conscientiously implemented the State Council’s directives and requirements for deepening the reform of the administrative approval system. A series of reforms have been introduced to fertilizer registration, further streamlining the documentation requirements, reducing the burden on enterprises, and vigorously promoting the development of the new‑type fertilizer industry. First, certain approval items have been abolished. In accordance with the spirit of the “Decision of the State Council on the First Batch of Administrative Licensing Items Designated by the Central Government for Implementation at the Local Level” and the “Decision of the State Council on the Third Batch of Administrative Licensing Items Designated by the Central Government for Implementation at the Local Level,” the central government has eliminated the following locally administered approval procedures: “Filing and Approval of Fertilizer Products Registered in Other Provinces” and “Application for Temporary Fertilizer Registration within China.” Second, administrative approval practices have been standardized. The Eighth Agricultural Ministry Fertilizer Registration Review Committee was established, replacing a fixed panel of experts with an expert pool; members are randomly selected prior to each review meeting to conduct comprehensive evaluations of fertilizer registration applications. Third, intermediary service reforms have been advanced. Pursuant to the “Decision of the State Council on the Second Batch of Measures to Streamline and Standardize 192 Intermediary Services Related to Administrative Approvals by State Council Departments,” two intermediary services—fertilizer safety‑evaluation tests and fertilizer product testing—have been reclassified as technical review items. Applicants are no longer required to conduct these safety‑evaluation tests or product tests; instead, the approving authorities commission relevant institutions to carry them out. Fourth, supporting regulations have been revised. The “Measures for the Administration of Fertilizer Registration” and the “Requirements for Fertilizer Registration Documentation” have been amended. A preliminary “Catalogue for the Administration of Fertilizer Registration and Filing” has also been drafted, proposing to categorize different fertilizer products into three management regimes—registration, filing, and exemption from registration—and to implement a two‑tier registration and filing system at both the ministerial and provincial levels. At the same time, based on actual conditions in fertilizer product management, dynamic adjustments will be made, with the updated “Catalogue for the Administration of Fertilizer Registration and Filing” promptly published.

Going forward, the Ministry of Agriculture and Rural Affairs will take a holistic approach to fertilizer management, aligning it with administrative approval reforms and drawing on the experiences of other agricultural inputs as well as those of other countries and regions. It will undertake comprehensive planning for fertilizer registration and management, explore the establishment of a catalog‑based system for registration and filing, and effectively guide the healthy development of the industry, particularly in the area of new‑type fertilizers. At the same time, it will further clarify responsibilities, standardize procedures, strengthen enforcement and oversight, and enhance post‑licensing supervision.

IV. On Encouraging and Supporting Fertilizer Enterprises in Providing Diversified Agricultural Services

Over the years, the Ministry of Agriculture and Rural Affairs has attached great importance to cooperation with enterprises, strengthening exchanges and building consensus to jointly advance scientific fertilization. First, we have deepened agricultural–enterprise collaboration. In 2014, our ministry partnered with Sinochem Fertilizer Co., Ltd. to launch a “Demonstration County Initiative for Promoting Compound Fertilizers through Agricultural–Enterprise Cooperation” in 19 major grain-producing counties, key vegetable-producing counties, and counties with competitive specialty crops across 11 provinces, while also facilitating collaborative linkages between provincial and county-level agricultural authorities and 1,200 enterprises. Second, we have reinforced inter‑departmental coordination. In 2015, the Department of Crop Production Management of our ministry signed a Strategic Cooperation Agreement on Promoting Scientific Fertilization with the Agricultural Inputs Bureau of the All‑China Federation of Supply and Marketing Cooperatives, establishing comprehensive strategic cooperation in the field of scientific fertilization. In 2016, in collaboration with China Telecom, we organized the “Zero Growth in Chemical Fertilizer and Pesticide Use: Technology Reaching Every Household” publicity and training campaign, conducting 100,000 training sessions nationwide. Third, we have strengthened demonstration‑driven promotion. In 2016, together with Sinochem Group, we convened an experience‑sharing conference in Bengbu, Anhui, on advancing the application of compound fertilizers through agricultural–enterprise cooperation to support zero growth in chemical fertilizer use. Working with enterprises such as Sinochem Fertilizer, Jinzhengda, Dow AgroSciences, and BASF, we established more than 150 demonstration sites, promoting over one million tons of high‑efficiency slow‑release fertilizers and expanding their application to more than 25 million mu of farmland.

Going forward, the Ministry of Agriculture and Rural Affairs will continue to strengthen cooperation with enterprises and other new types of agricultural business entities, guiding fertilizer companies to extend their reach to the downstream end of the agricultural value chain and fostering integrated production‑and‑service business models. The ministry will encourage firms to view the provision of agrochemical services as a key opportunity for driving transformation and upgrading, facilitating the shift of fertilizer producers from a manufacturing‑oriented to a service‑oriented approach, and establishing a comprehensive agrochemical service system that integrates production, logistics, research, and extension.