Corn harvesting and storage prices are 10% lower than last year, and the plight of cheap corn hurts farmers remains to be solved.

"when sowing, I look forward to a good harvest, but after the autumn harvest, I am often afraid that the price of grain will not go up and that it will not sell at a good price, so I have been busy for nothing all year." A farmer in Rizhao, Shandong Province told China Sankei News.

This year's autumn harvest is coming to an end, but some farmers are not happy. Because the purchase price of corn this year is lower than that of last year, the excitement after the autumn harvest is gone.

Recently, some media published an article saying that the low price of corn has seriously dampened the enthusiasm of food farmers for growing grain, and even some large grain farmers in land transfer have begun to break their contracts and abandon their rents.

According to the reporter's interview, prior to this, the National Development and Reform Commission, the Grain Bureau, the Ministry of Finance, and the Agricultural Development Bank jointly issued a paper to announce the corn collection and storage price for this year. Among them, the listing purchase price is 1 yuan per jin, which is 10.7% lower than last year's average price of 1.12 yuan per jin.

The relationship between supply and demand has changed.

"Corn prices are mainly affected by supply and demand." Dr. Zhang Zongyi, associate researcher of the Nanjing Agricultural Mechanization Research Institute of the Ministry of Agriculture and provincial analyst of the wheat industry chain in Jiangsu Province, said in an interview with the China Industrial and Economic News that the price of corn is low this year, mainly due to a substantial increase in supply. In addition to the increase in supply caused by bumper harvests, there has also been a big increase in the number of imported corn and substitutes.

According to the forecast of the National Grain and Oil Information Center, China's corn output in the new season is expected to reach 232 million tons, a record high. In addition to the increase in corn production, according to public data, from January to August this year, China imported a total of 4.562 million tons of corn, an increase of 162 percent over the same period last year.

In addition, according to the estimate of the National Grain and Oil Center, in 2015, the number of imported feed barley, sorghum, corn wine dregs and dried cassava to replace domestic corn as feed and processing alcohol is expected to reach 2500-28 million tons, an increase of nearly 10 million tons over the same period last year. Imported substitutes have a great impact on the domestic corn market consumption.

At the same time, there is also high inventory pressure in China. Since 2012, China has acquired about 184 million tons of temporary stored corn, but only 30.73 million tons of temporary stored corn have been sold at competitive prices.

Zhang Zongyi said that stocks, together with imports and imported substitutes, have approached or even exceeded the national corn consumption in a year. The supply is so high, while the demand has not increased significantly compared with the same period last year, coupled with the national grain warehouse capacity and financial constraints, the collection and storage capacity has greatly weakened, the decline in corn prices is inevitable.

Zeng Haiwei, director of the Research Center of the Industrial Research Institute of the Chinese Business Academy, has his own views on the relationship between supply and demand of corn. In an interview with China Sankei Shimbun, Zeng Haiwei said that the low price of corn this year is due to the low price impact of the United States, Canada and other traditional corn exporting countries; second, China's pig breeding industry was affected by low pork prices last year. A large number of farmers went bankrupt, changed careers or reduced their scale, and the demand for corn feed was greatly reduced. At the same time, the advantages of new energy and national subsidy policies have contributed to the expansion of corn planting area, resulting in the imbalance between supply and demand.

In fact, whether it is a specific increase in corn production, imports, high stocks, or a reduction in corn demand in a certain industry, all show that the relationship between corn supply and demand in China has changed this year. When supply exceeds demand, according to the law of value, the price drop is also reasonable.

The paradox policy of temporary collection and storage needs to be improved.

It is worth mentioning that in order to protect the enthusiasm of farmers to grow grain, the senior management of our country has also implemented a subsidy policy for grain. Some industry observers believe that the policy to push up corn prices will eventually lead to an increase in raw material costs, while the increase in raw material costs will lead to uncompetitive products and losses in production, and then the state will subsidize.

However, it also forms a strange circle: driven by national policies, corn prices are separated from the market, and corn processing enterprises have to rely on policy subsidies to survive, thus creating a vicious circle.

Zhang Zongyi believes that at present, there is a basic balance between supply and demand in domestic corn production and consumption, and there is no need to maintain such a high inventory. What is more, it is not necessary to implement a temporary collection and storage policy to support the purchase of corn in the market on the ground of protecting farmers' enthusiasm for growing grain. This may cause farmers to form false expectations and constantly expand the planting area of corn and other food crops. This in turn results in higher inventories and distorts the market. If the policy is suddenly cancelled, it will have a greater impact on the market and affect the safety of the entire industrial chain.

The reporter learned in the interview that, in fact, grain subsidies are not unique to our country. It is understood that Japan and the United States, as well as neighboring South Korea, subsidize agriculture.

Zeng Haiwei told reporters that the policies implemented by Japan can be used for reference to China. Because Japan's agricultural subsidies include irrigation and water conservancy infrastructure subsidies, agricultural modernization subsidies, agricultural loan subsidies and agricultural price subsidies. Price subsidy is the most important form of subsidy. Japan gives different forms of price subsidies to almost all agricultural products on the market.

"such as the 'double rice price system' directly controlled by the state, the price stability system for pork and silkworm cocoons, the guaranteed minimum price system for sweet potatoes, the price subsidy system for milk and soybeans, and the price stability fund system for vegetables and eggs. Rice is Japan's staple food, so rice is the core of Japan's price support policy, and rice subsidies account for more than 70% of the total price subsidies. In other words, the 'producer rice price' paid by the state to farmers is significantly higher than the 'consumer rice price' they sell to consumers, and the upside-down part of the purchase and sale is compensated by the agriculture, forestry and aquatic products budget. " Introduced by Zeng Haiwei.

Through the introduction of food subsidies in Japan by the above-mentioned industry insiders, our country shows a slightly rough reform in the subsidy mechanism.

What is gratifying is that it seems that senior officials have also decided to have some during the 13th five-year Plan period in view of the current problems faced by China's grain collection and storage policy and the current domestic grain price formation mechanism.

The reporter learned in the interview that the government has determined that it will improve the price formation mechanism and implement differential support policies for different varieties by means of "variety-by-variety and gradual promotion".

Among them, for rice and wheat, improve and continue to implement the minimum purchase price policy; For cotton and soybean, according to the policy of price and supplement separation, continue to implement the target price reform pilot, pay attention to giving play to the decisive role of market price formation, guide production through market price signals, adjust supply and demand, and improve subsidy distribution methods; For corn with huge surplus at present, we will reform and perfect its collection and storage policy, and also start price marketization reform.

How to fundamentally solve the problem of "grain price hurting farmers", is it to combine the policy of purchasing and storage with marketization, or to mainly play the regulatory role of the market?

Strengthen information disclosure and reasonable policy guidance

Zhang Zongyi believes that in order to fundamentally solve the problem of "low grain prices harming farmers", it is necessary to strengthen information disclosure and reasonable policy guidance. It is best not to directly link subsidies with specific varieties of production, cancel the temporary collection and storage system, and implement the policy of linking subsidies with land. As long as agricultural production is engaged, subsidies will be carried out according to the planting area or cultivated area, regardless of what farmers plant. The farmers 'planting structure is regulated by the market. Only in this way can the market mechanism be brought into play.

Zhang Zongyi further said that increasing farmers 'enthusiasm for growing food through financial subsidies is based on the false assumption that farmers' enthusiasm for growing grain is lower than that of growing cash crops, as well as excessive concerns about food security. We have always believed that the benefits of growing cash crops are much higher than food crops, and farmers are reluctant to grow food crops.

In fact, in recent years, the gradual disappearance of the demographic dividend has led to very high labor costs. With the widespread use of mechanization, large-scale rural farmers, family farms and other large-scale business entities continue to emerge. In addition, the mechanization level of cash crops is relatively low, while the mechanization level of food crops is very high. Therefore, some large-scale business entities can only choose to plant food crops.

Zhang Zongyi told reporters, The reason is very simple, Two or three labor force at home through mechanization can grow hundreds of thousands of acres of grain, But even can not grow dozens of acres of vegetables. On the contrary, it is those farmers with smaller planting scale who grow vegetables at a very high proportion. Therefore, growing food does not need to rely on subsidies to guide it.

Zeng Haiwei believes that four problems must be solved to solve the problem of low fruit price hurting farmers from the root: first, the per capita cultivated area of farmers should be scaled; second, the agricultural product processing industry chain should be upgraded to improve the scale and modernization level of agricultural product processing industry; third, the state should issue policies to protect and support agricultural product processing technology and processing equipment; Finally, and most importantly, we should actively learn from the experiences of the Netherlands and Japan, establish a national agricultural product procurement system and distribution system, and improve the efficiency of information guidance and market operation.

Zeng Haiwei introduced that agriculture can only be subsidized by the state, which is consistent with the national policies of the United States, Japan, South Korea and even Israel. Agriculture is fundamental to food security and manufacturing in any country.

Zeng Haiwei compared China with the United States. He introduced that the slogan at the door of the United States Department of Agriculture is: "Agriculture: the foundation of processing and manufacturing." It can be seen that even in developed countries such as the United States, agriculture cannot be ignored. For China, a country with a population of 1.37 billion, food security is even more urgent; at the same time, food prices are more related to the quality of people's livelihood, and the quality and processing chain of agriculture can also have an added value effect of more than 2.8 times GDP.

At present, China has more than 500 million rural population and more than 100 million agricultural labor force. Agriculture is of great importance to China's economy, employment, social stability, consumer prices and food security.

Zeng Haiwei said, but compared with the United States, China's agriculture has too many agricultural population.(The contradiction between less than 2.8% in the United States, less than 1% in Japan, and as high as 26%-38% in China, and the long-term plan to reduce it to 7.8% by 2024) and too little cultivated area per capita (the average farm area in the United States is more than 3000 mu, the average area in Japan is about 100 mu, and the average area for everyone is less than 10 mu) determines that farmers 'income is at the level of several thousand yuan per year, and hard work is less than one month.

Contradiction between safety and efficiency

Zeng Haiwei said that there are currently four major problems that hinder the development of China's grain industry. In terms of grain cultivation and resources, China faces the problems of land reduction and land resource deterioration caused by national land finance, urban expansion, industrial construction and industrial pollution.

"There is a huge gap between the level of science and technology and mechanization, especially the level of small-scale mechanization, and the United States, Japan and Israel, which leads to a huge gap in agricultural production efficiency with the above-mentioned countries, and there is a fundamental contradiction between food security and agricultural wealth benefits." Zeng Haiwei said.

The reporter learned in the interview that labor costs account for about 42% of the production costs of China's three major food crops, which is completely incomparable with less than 5% in the United States.

Zeng Haiwei stressed that relying solely on the market will inevitably lead to greater confusion. "Western free markets have proven to be the main source of the current world's problems. To solve China's problems, our ancestors have long given more advanced system solutions than Keynes, such as Sang Hongyang's leveling system in Han Dynasty, which is essentially the superposition of state intervention and market mechanism. The invisible hand and the visible hand grasp, the effect is better. Of course, I think it is necessary for the state to provide appropriate protection for agriculture. If we fail to grasp the rice basket, vegetable basket and meat basket of 1.37 billion people well, it will be a big burden for the whole world." Zeng Haiwei told reporters.

Zhang Zongyi finally said, At present, China's corn supply and demand is basically balanced, There is no need to worry too much, To make China's grain planting healthy development, Should gradually cancel the minimum protection price, But directly engaged in agricultural production farmers rather than land contracting rights owners to give subsidies linked to the operating land area, Let the market determine the planting structure and planting area of each variety. The government purchases the same amount of grain from producers in the form of orders at market prices according to needs, rather than promising to buy from the market, so as to maintain scientific and reasonable stocks. Only in this way can agricultural producers be protected without distorting the allocation of market resources.