Farmers borrow money to grow grain, but it is difficult to subsidize grain sales. It is less than one-tenth of Europe and America

Jian Yunzhang, a reporter from the Economic Observer, said: "Wheat is falling, corn is also falling, and grain prices this year are really incomprehensible!" A bumper grain harvest was originally a happy event, but Liang Yukui (a pseudonym), a big grain grower in the south of Henan Province, was not happy.

A few years ago, in response to the call of the Ministry of Agriculture and the Henan provincial government, Liang Yukui rented more than 700 mu of local land, bought sowers, harvesters and other agricultural machinery, and began to grow grain. It was not until last year that Liang Yukui repaid the loan from the bank similar to that of his relatives and friends. Unexpectedly, he encountered a sharp drop in wheat and corn prices in 2015. He said: now that the grain cannot be sold, there is certainly no way to repay the hundreds of thousands of yuan of agricultural materials sold on credit.

Liang Yukui told the Economic Observer that on the one hand, he is trying to sell grain at a low price, first paying off the arrears of purchasing agricultural materials and leasing land, and on the other hand, he is planning to greatly reduce the scale of leased land, or even withdraw from leasing land to grow grain and cultivate land altogether. "A lot of contracts have not yet expired, and there will certainly be disputes with a lot of people, but I really don't care about them," he said.

Henan is not only a major grain-producing province, but also the largest province of wheat production. It is reported that this year, most of the big grain growers in Henan have encountered the same predicament as Liang Yukui. Due to the chain reaction caused by the difficulty of selling grain, it is not only difficult for large grain growers to sustain, but also some grain brokers and agricultural dealers are also affected. Such a dilemma may affect the agricultural reforms that the local government is promoting, such as land transfer, agricultural scale operation, and so on.

According to the analysis of a number of grain experts, in recent years, both the central and local governments have been encouraging farmers to actively grow grain and encourage the development of large grain growers, but now there are relatively serious difficulties in selling grain in Henan, Jilin, Heilongjiang and other major grain producing areas. this shows that the relevant grain regulation and control strategies and policies and measures have reached the juncture that needs to be adjusted urgently.

Of the three staple grains in which market prices have fallen across the board, corn has fallen the most, falling as much as 30 per cent compared with last year. Liu Shi, who once held an important position in Monsanto far East and served as president of Longping Hi-Tech Co., Ltd., believes that the sharp drop in corn prices is not only related to the shortage of domestic corn stocks and the serious upside-down of international corn prices. There is also an extremely important point, which is related to the temporary corn collection and storage price announced by the National Development and Reform Commission on September 20. To the surprise of the outside world, the country's policy corn purchase price fell for the first time this year, 0.13 yuan per jin lower than last year's highest purchase price.

According to the past practice, the national policy purchase price of supporting the market is increasing year by year, and this is the first time that the National Development and Reform Commission has lowered the policy purchase price of corn. Feng Lichen, president of China Corn Network, and Ma Wenfeng, an analyst at Oriental Iger Agricultural Consulting Company, said that the relevant parties should reform grain regulation and control policies, including grain import, collection and storage, as soon as possible, and increase subsidies to grain farmers.

Experts close to the National Development and Reform Commission said in an interview with the Economic Observer that the central government's annual expenditure on agriculture, rural areas and farmers is about 1.5 trillion yuan, and the subsidy to grain farmers is about 90 yuan per mu, which is a far cry from the subsidies given to agriculture and farmers in some European and American countries. According to accounting, China's direct subsidies to farmers now account for only about 3% of farmers' income, while those in Europe and the United States are as high as 40%. Therefore, whether in terms of China's national conditions or from the perspective of ensuring food security, subsidies to agriculture and farmers should be greatly increased.

It is difficult to sell grain

The difficulty in selling grain this year began with summer grain. This newspaper has learned that there are two main reasons: one is that there are fewer grain collection sites for implementing the policy, and the other is that the quality of wheat is not high. The most serious difficulty in selling grain is in Henan Province.

Henan's wheat output this year is 70 billion jin, which has made a historic breakthrough, but the subsequent difficulties in selling grain have also made grain farmers, especially large grain growers, suffer a lot. It is reported that so far, many large grain growers have not sold the wheat in their hands.

A large grain grower in Zhenping County, Nanyang City, Henan Province, told the Economic Observer that since 2012, the grain management offices of Pengying, Wanggang Township, Gaohu Town, and other townships in the county have not purchased wheat, and local people can only go to the grain depots tens of kilometers away if they want to sell grain. Several large grain growers in Fangcheng County, Nanyang City, also reflect that there are similar problems, resulting in the wheat harvested this year cannot be sold.

According to Jiao Shanwei, director of the Yida Research Institute of the China Grain Network, there are also great differences in wheat sales among large grain growers in Henan Province. Sales in northern Henan, where wheat quality is better, have not been greatly affected, and difficulties in selling grain are mainly concentrated in the south of Henan Province. During this year's wheat harvest, Nanyang, Xinyang, Zhumadian, Zhoukou, Pingdingshan and other cities in Henan Province suffered continuous rainfall, resulting in wheat scab, black embryo disease, and imperfect grains exceeding the standard, to a certain extent, it also makes it more difficult to sell grain in these places.

It is not only the big grain growers who are troubled by the decline in wheat prices and difficulties in selling grain, but also some grain traders and agricultural material dealers in Henan Province are also complaining repeatedly. Hou Zhengguang, from Xihejing Village, Baidaokou Town, Huaxian County, Anyang City, reflected that this year he bought a total of 2000 tons of wheat at a price of about 1.20 yuan / jin. Due to the continuous drop in prices, he failed to sell 200,300 tons of wheat. In Yuantan Town, Tanghe County, Nanyang City, Qin Changchun, an agricultural dealer, owed more than 2 million yuan by local grain growers, most of which were owed on credit when growing wheat last year.

Ma Wenfeng, an analyst at Oriental Iger Agricultural Consulting Company, and other analysts said that since the beginning of autumn this year, the prices of the three staple grains have all fallen. Compared with the same period last year, corn has dropped by more than 20% on average, wheat is about 10%, and rice prices have experienced the smallest decline. Now that the new season corn in Northeast and North China is already on the market, analysts such as Ma Wenfeng are worried that the difficulty in selling grain this year will continue from Henan to the northeast and other major grain producing areas, and if this development continues, it will cause greater damage to the interests of grain growers, especially some major grain growers, and deal a blow to farmers' enthusiasm for growing grain.

Lou Yuanjun, a big grower in Shilipu Village, Xiaotan Township, Yanjin County, Henan Province, told the Economic Observer that he had leased more than 580 mu of land at a price of about 900 yuan per mu per mu per year. For large grain growers, it is often "losing money for three years a year".