Chen Xiwen: the formation of grain prices should be close to the market and give consideration to farmers' income.

"the formation of grain prices should be close to the market, while taking into account the legitimate income of farmers. This is a very important principle for forming China's grain prices in the future. " At a press conference held by the Information Office of the State Council today, Chen Xiwen, deputy head of the Central Rural work leading Group and director of the office, said.

Chen Xiwen said: at present, the phenomenon that domestic grain prices are higher than foreign grain prices is due to many reasons: first, China's agricultural competitiveness is insufficient; second, China's protection policy makes grain prices continue to rise; third, international grain prices are falling. There are also freight and exchange rate issues.

Chen Xiwen said: in order to arouse the enthusiasm of farmers and ensure their reasonable income, the state has been continuously raising temporary purchase and storage prices and minimum purchase prices in recent years, while international market prices have been falling, and grain prices have been upside down.

However, from the perspective of price fluctuations, the increase in domestic grain prices is significantly lower than the decline in grain prices in the international market. The upside-down of grain prices is not entirely caused by high domestic prices. Chen Xiwen specifically mentioned changes in exchange rates and freight prices. "the RMB exchange rate has been generally strong over the years, which means that imported agricultural products bought with US dollars will be cheaper."

For example, $500 a ton of soybeans is 4000 yuan at the exchange rate of 1 ∶ 8 in the past. Now the exchange rate is 1 ∶ 6, and a ton of soybeans bought at US $500 is 1000 yuan cheaper than before when it enters China.

The decline in global energy prices has led to a sharp drop in shipping prices, which is also an important reason for the upside-down of food prices.

Bulk agricultural products are basically traded internationally by sea, and the cost of a ton of grain shipped in bulk from the Gulf of Mexico of the United States to Huangpu Port in Guangzhou, China in 2008 is about US $135 to US $138. At present, the freight per ton is 35 US dollars, which is more than 600 yuan cheaper in RMB.

How to deal with the problem of grain prices upside down? Chen Xiwen said that the price level of wheat and rice has remained unchanged where the lowest prices have been implemented, the minimum purchase prices for wheat and rice implemented in 2015 have not increased, and the purchase prices for 2016 are under study. The relevant departments announced the price of corn on September 18 this year. Compared with last year, the temporary collection and storage price of corn in the main producing areas decreased by 0.12 yuan per catty on average. In the past, the temporary storage price of corn was 1.13 yuan per catty in Liaoning, 1.12 yuan per catty in Jilin and 1.11 yuan per catty in Heilongjiang. This time, the average reduction was 0.12 yuan, that is, to 1 yuan per catty. However, it should be noted that both the temporary storage price and the current market price are still higher than the international grain price.

In Chen Xiwen's view, prices and subsidies need to be separated in the future, and prices are mainly formed by the market, so that the main body of the market will be active. In the past, when subsidies were mixed with prices, the prices were higher than the market prices, so grain sellers and processing enterprises became inactive. After separating the price from the subsidy, the market can be activated, the farmers sell grain at the market price, and the operators receive the grain at the market price, thus invigorating the grain market. What if the market price is too low? the government should adopt appropriate policies to directly subsidize farmers, but separate from the price. This is the basic principle, and the future trend is the same. The "price compensation" is separated and is close to the market price.