Chen Xiwen explains that China's grain prices are higher than those in the international market: complicated reasons

On November 4, the State Information Office held a press conference and invited Chen Xiwen, deputy head and office director of the Central Rural work leading Group, and Han Jun, deputy director of the Office of the Central Rural work leading Group, to interpret the essence of the Fifth Plenary session of the 18th CPC Central Committee. introduce the "Comprehensive implementation Plan for deepening Rural Reform" and other aspects. Chen Xiwen, deputy head of the Central Rural work leading Group and director of the office, explained why China's grain prices are higher than those in the international market.

The following is a transcript:

CCTV reporter:

I would like to consult two experts on two questions: first, five key areas and 26 major initiatives have been put forward in this year's Programme. The first one is to deepen the reform of the rural collective property right system. Does it mean that the reform of collective property rights system is the most important and basic in the next stage of rural reform? what is the focus and key of this reform in the next stage? Second, the prices of the three staple grains this year have received great attention from the media. first of all, the prices of market transactions are relatively low. what are the reasons for this situation? This year, the temporary storage price of corn has been lowered for the first time, and the minimum purchase price of wheat and rice has also been flat. Does it mean that our current policy acquisition has been somewhat difficult? it so happens that the "plan" issued this time also proposes to reform and improve the corn acquisition and storage policy, and to improve the minimum purchase price policy for rice and wheat. Can you give us details in this respect? Thank you.

Chen Xiwen:

Five key areas put the reform of the rural property rights system in the first place, which, as you just said, is of fundamental significance and role to the entire rural economic system. In fact, China's rural areas are a form of economic organization in which public ownership leads the common development of a variety of owned economies. Of course, its main body is the rural collective economy. About 45% and 46% of our total land area is owned by rural collectives, including 1.8 billion mu of cultivated land, as well as woodland, grasslands and unused land. nearly half of the land area is collectively owned by farmers. Therefore, the collective economy obviously occupies an important position in the rural economic system. Of course, there are some state-owned or other forms of ownership, such as state-owned forest farms, state-owned farms, supply and marketing cooperatives, as well as farmers' individual and private economy, farmers' cooperative economy, and so on, so the rural economy is complex. Special emphasis is placed on the reform of the property rights system of the rural collective economy, which does not mean that we are neglecting other economies. in fact, our documents on the reform of state-owned forest farms, the reform of state-owned forest areas, the reform of state-owned land reclamation, and the reform of supply and marketing cooperatives are all issued one after another, including the protection of individual and private economy in rural areas. It is only because the collective economy accounts for a large proportion of the whole rural economy, if it is said that the hukou is in the rural areas, it is related to the vital interests of more than 900 million farmers are closely related to the property rights system of the rural collective economy.

According to the formulation of this "plan", we can see that the reform of the rural collective property right system mainly involves three major aspects:

First, the main part of the rural collective economy is cultivated land. According to the results of the second detailed land survey, the existing cultivated land is 2.02 billion mu, of which about 200 million mu is unstable, for example, it occupies woodland, grassland or some below the water level of rivers and lakes, and it may be flooded if the water rises. In this sense, arable land involves hundreds of millions of farmers. At present, there are 230 million farmers in the whole rural area who have contracted collective land. Therefore, how to further clarify the property rights system of the cultivated land system is a big problem for us at present. Before this, the central government has already issued a notice, and all localities are also carrying out it, which is called the registration and issuance of rural land contracting through the registration of operating rights. This work is already the third year of the pilot project this year. Judging from the current situation, it is going well. Last year, it was proposed to carry out a province-wide pilot project in three provinces, and this year it has been carried out in Fanwei of 12 provinces. There are more than 2200 agricultural counties, cities and districts and more than 2200 county-level units across the country, and each unit has its own pilot project. By June this year, 260 million mu of farmers' contracted farmland had clearly defined its contractual management rights, and some began to issue certificates. Through confirming the right to register and issue certificates to stabilize farmers' land contractual management rights for a long time, clarify the nature of its usufruct, and protect farmers' property rights.

Second, the non-resource operating assets in rural areas. In our words, in the past, people talked more like township enterprises, but now more of them, such as the property economy and the logistics economy, have occupied rural land and have been established by investment in the rural collective economy. It should be said that this piece of assets is very large, with trillions of yuan of assets. In the past, this piece of assets was not properly managed in some places, was controlled by a small number of people, and the benefits were not shared by farmers. This "plan" proposes that through the reform of the joint-stock cooperation system, the collective operating assets should be approved by the common people in a certain form, so that it can be transferred to every family and every farmer. In its operation and management, farmers should actively participate, be informed, have the right of supervision, and have the right to pay dividends to the operating income of every member of the collective organization with shares.

Third, the rural non-operating collective assets, including some kindergartens, primary schools, health centers, these assets are collective assets, but not operating.

At this stage, the main purpose of the "implementation plan" is to improve its efficiency and how to better provide public services to farmers. The reform of the collective property rights system we are talking about mainly refers to these three aspects, among which the land issue is richer than cultivated land, including how to reform the country's land expropriation system, including how to reform the rural homestead system, and so on. it is involved in this "plan", and trial sites have been deployed in 33 county-level units, which were deployed last year, and the pilot project is under way.

Some of the contents in the reform of the land system are in conflict with the current legal system. With the approval of the standing Committee of the National people's Congress, the pilot in these 33 places can be carried out during the pilot period, which is until the end of 2017. During this period, the relevant legal provisions involved in the scope of the pilot will not be implemented temporarily, and the achievements of his pilot reform will be evaluated at the end of the pilot. After the assessment, it is determined whether to amend the law or restore the original law to implement, these work is in progress. This is the first problem, the system of collective property rights.

The second question is about food and prices. In fact, the "implementation Plan" has put forward a very principled and important opinion on the formation mechanism of the entire grain reform, that is, the formation of grain prices should be close to the market, while taking into account the legitimate benefits of farmers. This is a very important principle for us to form China's grain prices in the future. As we all know, since 2004, we have implemented the policy of minimum purchase price for the main producing areas of rice and wheat, which is still under implementation. The temporary collection and storage price of corn has been implemented since 2007, and the temporary collection and storage price of soybean has been implemented since 2008. The temporary collection and storage price of these two varieties is only implemented in the three northeastern provinces and the northeast region of Inner Mongolia. There are no temporary storage prices for these two varieties in other areas.

The present situation is just as mentioned just now, and the situation of grain is indeed very complicated. On the face of it, I sum this up as three growing numbers. First, this year is the 12th year, and domestic grain production has been increasing for 12 consecutive years. Second, the amount of grain we have imported has been increasing since 2010. Third, the current existence of grain depots is growing. How did this happen? To a greater extent, this situation is brought about by economic globalization. of course, we have our own problems to solve, and what is more important is economic globalization. since the global financial crisis, this impact has lasted until 2010. there has been weak global demand for bulk products, including energy products and mineral products in addition to commodities such as agricultural products. There has been a sharp drop in prices. If the grain prices in the international market are compared with those in 2011, the prices of the three staple grains in the international market have fallen by almost 40%, 50%, this is the global situation.

Judging from the actual situation in China, it should be said that in order to arouse the enthusiasm of farmers and ensure their reasonable income, the state has been appropriately raising the temporary purchase and storage price and the minimum purchase price in recent years, which is contrary to the trend of prices in the international market. We are constantly raising prices, and prices are constantly rising in the international market. After this point, there will be higher grain prices in China than in the international market. Of course, this is the simplest analysis. In fact, the fact that China's grain prices are higher than those in the international market is not entirely due to the increase in domestic prices, because you can see that the increase in domestic prices is significantly lower than the decline in grain prices in the international market.

Why there is such a complex situation, there are other factors. Other factors, including changes in the exchange rate, the RMB exchange rate has generally been strong in recent years, and has depreciated slightly since August this year. On the whole, compared with before the reform of the RMB exchange rate mechanism, the RMB has risen by about 28%. The strong exchange rate of the RMB means that imported agricultural products purchased in US dollars will be cheaper. For example, $500 a ton of big beans, if calculated according to the past, the exchange rate at 1:8, other costs are not included, the entry is 4000 yuan RMB. Now the exchange rate is 1:6. For a ton of soybeans bought at US $500, there is only 3000 yuan left, which is 1000 yuan cheaper. The second is the decline in global energy prices, which has led to a sharp drop in global shipping prices. we all know that agricultural commodities such as grain are basically traded by seaborne. If compared with 2008, I checked the data. In 2008, the freight of grain shipped in bulk from the Gulf of Mexico of the United States to Huangpu Port in Guangzhou, China, is about US $135-138. Now the freight per ton is 35 US dollars, which is 100 US dollars cheaper and more than 600 cheaper in RMB. There are many factors in such a complex situation in food prices. the first is the lack of competitiveness of our agriculture. Second, our protection policy has made food prices higher and higher. Third, international food prices are falling. The fourth is the problem of freight transport. Fifth, the issue of exchange rate. So it's made up of a lot of complicated factors.

In the face of such a problem, dealing with this problem cannot be simplified. As you just said, our basic policy on three staple grains in the past two years, such as keeping the price level of wheat and rice unchanged in places where the lowest prices have been implemented, and the minimum purchase price of wheat and rice implemented in 2015 has not increased. 2016 is in the process of research. The price of corn was announced on September 18 this year that the temporary collection and storage price of corn in the main producing areas was reduced by 0.12 yuan on average compared with last year. The temporary storage price of corn we set in the past was 1.13 yuan in Liaoning, 1.12 yuan in Jilin and 1.11 yuan in Heilongjiang. This time it was reduced by an average of 0.12 yuan, that is, to 1 yuan. As a result, we can also see that market prices are also falling in the whole market, including areas where temporary stored prices are not implemented in the customs. However, it should be noted that the temporary storage price of 1 yuan announced by the government this year, or the current market price, is still higher than that in the international market.

From this point of view, lowering the temporary storage price of corn is also taking into account the complex situation of the current grain price, we should not allow grain farmers to suffer too much losses, we should also pay attention to protecting their interests, and the next step is to move forward. The principle is to make the price and subsidy separate. Whether we have the lowest price now or the temporary storage price, to a certain extent, we combine the price with the subsidy, and separate the price from the subsidy in the future. The price is mainly formed by the market, and the main body of the market will be active. In the past, when subsidies and prices were put together, the price was higher than the market price, so grain sellers and processing enterprises became inactive. After the separation of reform and subsidies, the market can be activated, with farmers selling grain at market prices and economic operators receiving grain at market prices, thus invigorating the grain market. If the market price is too low, the government should adopt appropriate policies to directly subsidize farmers, but separate from the price. This is a basic principle, and so is the trend in the future. "price compensation" is separated and is close to the price of the market. The price formation mechanism is close to the market and pay attention to protecting the reasonable interests of farmers. Thank you.