Can the "reform" of collection and storage policy solve the difficulty of grain collection?

"Corn is critical, wheat is critical, rice is critical."

Recently, with the occasional gathering of grain people, a trader can't help adapting a scene from a TV series to laugh at his current business difficulties.

According to the data, the national grain output reached 607 million tons in 2014, while the amount of commercial grain was 398 million tons. According to the analysis data of supply and demand balance of China Grain Network, it is estimated that the annual balance of the three staple grain varieties of wheat, rice and corn in 2015 is about 53.9 million tons. The huge gap in grain storage capacity has emerged.

According to the National Bureau of Statistics, China's summer grain output reached a new high of 141.066 million tons in 2015, an increase of 3.3 percent over the same period last year.

On October 8, the State Grain Administration issued a notice pointing out that at present, China's grain stocks have reached a new high, and the amount of grain stored by all kinds of grain and oil storage enterprises is unprecedented. The amount of national policy grain stored in open-air and simple storage facilities is also unprecedented. The contradiction of insufficient warehouse capacity in major grain producing areas is prominent.

Has China's food security really changed from a "shortage crisis" to a "supply crisis"? Is the situation of grain inventory in our country really "at stake"?

According to an analysis by a person from the grain bureau of a major province, although China's grain production has increased for more than 10 years in a row, and the current warehouse capacity is generally tight, in the long run, China's grain supply and demand still belongs to the pattern of tight balance, and the work should not be taken lightly.

In recent years, due to the continuous increase in grain growing costs, coupled with the increasing import impact of lower international grain prices, the production and marketing prices of some grain varieties are upside down, banks are tight, it is difficult for small and micro enterprises to finance, and some grain processing enterprises stop production and transformation. Reluctantly operating enterprises due to meagre profits or even losses, grain collection enthusiasm dropped to a low point, its existing collection and storage capacity has not been brought into full play. A variety of factors have led to a periodic shortage of storage capacity, and "it is difficult to sell grain" in some areas, showing the appearance of "serious oversupply" in the short term.

According to the "Research report on the changing trend of China's Grain consumption structure" published by China Grain Network Yida Research Institute in October 2015, China's per capita grain consumption in 2014 was about 461kg, an increase of 22% compared with 377.7 kg in 2004. For example, due to the rigid growth of population, the annual consumption of rice rations increased from 311 billion jin in 2007 to 324.5 billion jin in 2015, showing an increasing trend year by year.

According to the report of the 18th CPC National Congress, the GDP and the per capita income of urban and rural residents will double in 2020 compared with 2010. With the growth of GDP, the per capita income of Chinese residents will continue to grow. According to the data of the World Bank, as food consumption is closely related to income, China's food consumption may continue to increase with the increase of income level in the future. Yida Research Institute predicts that China's grain demand will reach 670 million tons in 2020 and 700 million tons in 2030.

Shi Shaolong, deputy director of the Hunan Grain Bureau, believes that although there is a situation of "full storage" of grain in our country at present, we cannot draw the conclusion that our country has "too much grain" and "can grow less." Due to the influence of macroeconomic and other factors, the consumption of rations of rural population in China has decreased, and some industrial grain consumption has been reduced. With the improvement of agricultural planting technology, seed grain consumption also has a downward trend. However, in the long run, the supply and demand of self-produced grain in China belongs to the "tight balance" pattern has not changed, and will continue for a long time.

Can the "reform" of the collection and storage policy solve the difficulty of grain collection? What is the reason and background of the policy?

Several recent policies have attracted the attention of the industry: first, the minimum purchase price for wheat in 2016 is consistent with that in 2015 and remains stable again. Second, in 2015, the national temporary storage corn listing purchase price (national standard third-class quality standard) was 1 yuan / jin, an average decrease of 12% compared with last year.

Professor Hong Tao, director of the Institute of Business Economics of Beijing Industrial and Commercial University and director of China's Food (Agricultural products) Safety Electronic Commerce Research Institute, believes that by the end of May 2015, raw grain stocks of grain enterprises across the country had increased by 24% compared with the same period last year, of which wheat stocks increased by 19% compared with the same period last year. Rice increased by 16%, corn increased by 36%, and soybeans decreased by 17%. Comprehensive evaluation of China's grain belongs to the "relatively safe" situation, but the factors affecting food insecurity are increasing. The contradiction between grain import and domestic grain inventory is increasing, and China's grain needs to be "de-stocked" urgently.

At present, the price of domestic grain is higher than that in the international market, close to the "ceiling"; global grain production has reached new highs, stocks have reached new highs, consumption growth has slowed down, and price growth has decreased. At the same time, there is a problem of cost "floor" in domestic grain production, grain subsidies are close to the "yellow line", and excessive use of cultivated land to develop grain production leads to the destruction of grain ecology. It is the meaning of the policy to guide grain production, storage and consumption through price means. in the long run, it will help to promote the development of agricultural industry and food production in the direction of "scientific, reasonable, economic, low-carbon, green and environmental protection".

Hu Feng, a specially hired expert from Yida Research Institute and senior economist at Guangdong South China Grain Trading Center, believes that maintaining or lowering the purchase prices of the three staple grains is a rational measure based on objective reality. At present, the international grain price is significantly lower than the domestic grain price, the domestic warehouse capacity is urgent, the inventory is high, and there is no capital and conditions to continue to raise the minimum purchase price. In the long run, grain prices should be determined by the market, and the state should not intervene directly.

Hu Feng said: the reason why it is difficult to sustain the temporary collection and storage policy of soybeans and corn is that the state collects it at a price higher than the market price, while at the same time is unwilling to sell it at the market price. as a result, grain stocks are getting higher and higher year after year. This is the direct cause of the current "high warehouse full storage". Thai rice was in a similar situation at that time. The rice pawn policy issued by the Yingluck government planned to buy and sell at a high price, but as a result, it was easy to buy at a high price, but difficult to sell at a high price. As a result of the backlog of rice, there is no warehouse capacity to buy new grain, and more importantly, the funds cannot be returned. The Thai government is short of financial funds and does not have the money to implement the original acquisition plan. At present, the situation of soybeans and corn in China is not as good as that of Thai rice, but it is very necessary to prepare in advance and fix the policy in time.

The national policy grain collection and storage plays an important role, and the grain market reform has a long way to go.

According to the statistics of the State Grain Administration, as of 30 September, 11 major producing areas, including Hebei, had purchased 66.3 million tons of wheat, Jiangxi and eight other major producing areas had purchased 7.95 million tons of early indica rice, and six major producing areas, including Jiangsu, had purchased 1.45 million tons of medium and late indica rice, an increase of 400000 tons over the same period last year.

According to Han Jianfeng, general manager of China Storage Grain Henan Branch, by the end of the market purchase on September 30, Henan Province had launched a total of 1371 storage points in five batches, purchasing 8.95 million tons of wheat, accounting for 46 percent of the province's summer grain purchases. accounting for 43% of the proportion of wheat purchases in the national wheat market, a rough estimate can help farmers directly increase their income by nearly 1.5 billion yuan. In addition, Lan Yong, dean of the School of Business of Hunan Agricultural University, also said that during the purchase of supporting the market this year, Hunan Province alone purchased 2.43 million tons of new early rice (including the rotation of new early rice with stored grain), of which 1.43 million tons were purchased at the lowest price, directly increasing farmers' income by supporting the market by 816 million yuan. Lan Yong believes that since the introduction of the minimum purchase price policy, it has played a positive role in stabilizing grain production, maintaining market stability and protecting the interests of farmers.

At present, new changes have taken place in the international and domestic grain market situation, and various industries in China are further moving towards the deep-water area of market-oriented reform, and the appropriate adjustment of relevant policies is a manifestation of "keeping pace with the times". Although it has to go through a short period of "labor pains".

Lan Yong believes that as the lowest purchase price authorized by the state and the main body of the temporary purchase and storage policy, China stored Grain, together with relevant departments, has actively organized the purchase of policy grain and oil, effectively preventing "cheap grain from harming farmers" and protecting farmers' enthusiasm for growing grain. The basic income of grain-growing farmers has been stabilized. In the process of implementing this policy, China Grain reserves, local state-owned grain departments and related enterprises that undertake policy acquisitions all play an important role.

According to relevant data, in the ten years from 2005 to 2014, China Grain reserves completed the purchase of 560 million tons of supported and temporary grain reserves, with policy sales of 410 million tons. During this period, international grain prices fluctuated by more than 40% on several occasions, while domestic raw grain prices maintained a moderate annual increase of about 10%, successfully responding to the impact of the international food crisis and promoting the overall stability of China. "practice shows that China's grain macro-control policies and specific measures in recent years are generally effective and effective." Lan Yong said.

Ding Junqiang, a professor at the Institute of Science, Technology, economy and Social Development of Hunan University, said that there is nothing wrong with the state's establishment of a minimum purchase price policy. The European Union and other developed countries also have a minimum purchase price policy, but their prices are not too high. The market purchase policy stipulates that the purchase price of new grain shall not be lower than the minimum purchase price within a certain period of time, so as to safeguard the interests of grain farmers. However, the issue of "agriculture, rural areas and farmers" involves a wide range of areas and is a systematic project. It cannot be expected that a market-supporting acquisition policy or temporary reserve acquisition policy can completely solve the problem of farmers' household income.

The third Plenary session of the 18th CPC Central Committee proposed to "make the market play a decisive role in the allocation of resources." from an overall and long-term point of view, the state adjusts the relevant policies timely according to grain production and market conditions, and makes the decision of "raising, lowering, and keeping prices unchanged" is an objective requirement under the conditions of market economy. The change of collection and storage policy has a direct impact on the difficulty of selling grain, but it is not the root cause. "the reasons for the difficulties in selling grain are various and comprehensive, including production, reserves, sales, as well as economic, social, consumption habits and other factors." Ding Junqiang said.

Zhang Yunliang, chairman of Hunan Junyi Ecological Agriculture Co., Ltd., with an annual rice processing capacity of 65000 tons and an existing warehouse capacity of 20, 000 tons, said that the essence of farmers'"difficulty in selling grain" is not entirely the problem of grain itself. it is one of a series of problems faced by our country in solving the problems of agriculture, rural areas and farmers, because agriculture is still the most vulnerable industry. Due to the single policy acquisition system, which can not reflect high quality and high price, farmers are unwilling to grow high-end products needed by the market.

Many years ago, selling grain was the main source of income for farmers' families, but now the wages of migrant workers have become the main source of income for most rural families in the main grain-producing areas. There is a small labor force in the countryside, and the villagers who return to their hometown for harvest in a short period of time are eager to sell grain and pile up to sell grain because they have to hurry to return to the city to work, which is also the direct reason for the "difficulty in selling grain." Zhang Yunliang suggested that the state should continue to increase support for grain export in major producing areas and give better support to the convergence of production and marketing, the formulation of standards, and the green channel of logistics.

"since the introduction of the minimum purchase price policy in 2004, China has generally aroused the enthusiasm of farmers to grow grain, but there are still some drawbacks." Shi Shaolong suggested, "in terms of the grain purchase and marketing system, before the pilot of the target price system for major grain rations such as rice and wheat is successful, the state can fine-tune the minimum purchase price policy, but it should not be abolished immediately."

An industry source who declined to be named said that in mid-2014, stored grain, as the main body of the state-entrusted policy to support the market, organized policy acquisitions of nearly 125 million tons in the whole year, calculated on the basis of China's annual grain output of 607.1 million tons in 2014. about 20.59 percent of the country's grain goes into the national reserves managed by China's grain reserves. When the grain reserves were established in mid-2000, the original intention was to be entrusted by the State Council to be specifically responsible for the operation and management of the central grain reserves, and later added the function of "accepting the state's entrustment to carry out the regulation and control tasks such as the purchase, sale, and storage of policy grain and oil." Over the years, the work of storing grain in China has been affirmed by all walks of life.

At present, new changes have taken place in grain production, the warehousing situation, and the purchasing and marketing market, and it is suggested that when implementing policy acquisitions such as the lowest purchase price, we should adopt the method of "separate loans and repayments, each bearing its own responsibilities, and combining responsibilities and powers." we should fully mobilize the enthusiasm of the heads of grain security executives of major grain-producing provinces and municipal and county governments, and guide qualified grain enterprises to extensively participate in grain procurement, storage, purchase and sale. "to make the market play a decisive role in the allocation of resources" is an objective requirement, and the direction of China's grain macro-control further moving towards marketization remains unchanged, although the road of reform cannot be smooth. After experiencing labor pains, China's grain market will be more full of vitality and hope. " This person said.