Coping with the Reform of Grain Target Price with "five modernizations"

On September 17th, the National Development and Reform Commission, the State Grain Administration, the Ministry of Finance and the Agricultural Development Bank of China issued a notice on issues related to the acquisition of temporary stored corn in Northeast China in 2015, which "made clear the corn temporary storage policy speculated by the outside world." The Circular points out: with the approval of the State Council, the state will continue to implement the temporary corn collection and storage policy in the three northeastern provinces and Inner Mongolia Autonomous region in 2015; "the listing purchase price (the third-class quality standard of the national standard) is 1 yuan per jin, and the price difference between adjacent grades is controlled at 0.02 yuan per jin". This may be the last year of the implementation of China's corn temporary collection and storage policy. From next year, corn will enter the target price reform industry like cotton and soybeans.

The policy of minimum purchase price and temporary purchase and storage of grain since 2004 has played a positive role in protecting farmers' enthusiasm for growing grain and increasing farmers' income. However, as a transitional policy, its historic role seems to have been released. A very important aspect of the grain "high purchase quantity, high inventory quantity and high import quantity" that China is facing at present is that because the policy grain dominates the market, the purchase price is not only much higher than the market price, but also much higher than the international market price. While the national finance is burdened with a heavy burden, the difficulty of increasing the income of grain farmers is also increasing.

Since 2014, China has included the first batch of pilot projects of target price reform for cotton in Xinjiang, Northeast China and Inner Mongolia. This is a concrete manifestation that the market plays a decisive role in the market price of agricultural products.

The target price policy is an agricultural support policy that protects the interests of producers through price difference subsidies on the basis of the price of agricultural products formed by the market. After the implementation of the target price policy for cotton and soybeans, the temporary collection and storage policy shall be abolished, and producers will sell cotton and soybeans at market prices. When the market price is lower than the target price, the state shall subsidize the producers in the pilot area according to the price difference between the target price and the market price and factors such as acreage, output or sales volume; when the market price is higher than the target price, the state does not grant subsidies.

From the perspective of the developed countries in the world and the pilot situation in China, it is a general trend to implement the target price of agricultural products. In response to the target price reform, grain production should achieve the "five modernizations".

Policy transparency

After the implementation of the target price of grain, the policy of supporting grain production should also be changed accordingly. The enthusiasm of farmers to grow grain should be mobilized and protected, and the policy of supporting grain production should be transparent.

The most basic condition of grain production is cultivated land resources. The status of cultivated land resources directly determines the grain output and quality, as well as sustainable development.

When formulating policies to support grain production, the protection of cultivated land fertility should be taken as the top priority. The relevant departments have initially made it clear that the three subsidies, namely, direct subsidies for grain, subsidies for improved varieties and comprehensive subsidies for agricultural materials, will be adjusted as subsidies for agricultural support and protection. 80% of the stock of comprehensive subsidies for agricultural materials, plus direct subsidies for grain farmers and subsidies for improved varieties of crops, will be used for the protection of cultivated land.

Intensive and large-scale operation on an appropriate scale is the only way to improve grain productivity, increase output per unit area and develop modern agriculture. Agricultural support and protection subsidies should make breakthroughs in supporting the large-scale operation of grain production. According to the initial clear policy of the relevant departments, 20% of the stock of comprehensive subsidies for agricultural materials, together with the pilot funds for subsidies for large grain growers and the incremental funds for the "three subsidies" in agriculture, will support the appropriate scale operation of grain in accordance with the requirements of unified adjustment and improvement of policies throughout the country. Emphasis should be placed on new business entities such as large grain growers, family farms, farmers' cooperatives, and agricultural socialized service organizations, reflecting that "those who grow more grain will give priority to supporting them."

When implementing the policy of agricultural support and protection subsidies, it is necessary to completely change the disadvantages of the "preferential system" policy for grain production when it is used in the "general system of preferences", and effectively improve the accuracy of subsidies. The subsidy object of cultivated land fertility protection is all the farmers who have the right to contract cultivated land, and the farmers who enjoy the subsidy should not abandon the cultivated land and keep the soil fertility from being reduced. Subsidy funds should be linked to the area of cultivated land or sown area, and strictly control the boundaries of subsidy policies. Cultivated land that has been used as animal husbandry farms, woodland, grain fields converted into facility agricultural land, cultivated land for non-agricultural requisition (occupation) and other arable land that have been changed, as well as cultivated land that has been discarded for years and whose area and quality in the occupation-compensation balance do not meet the conditions for cultivation will no longer be subsidized. At the same time, it is necessary to mobilize farmers to strengthen their awareness of the protection of agricultural ecological resources, take the initiative to protect soil fertility, and encourage straw to be returned to the field without burning in the open air. The subsidy funds used for the protection of cultivated land are directly subsidized to households in cash. It is necessary to adopt such methods as publicity and publicity to accept the supervision of all sectors of society. Those who act recklessly and violate the subsidy policy shall be severely investigated and punished.

High quality of variety

Without the protection of the minimum purchase price and temporary purchase and storage price policy, if the grain is to be unimpeded in the market, it is necessary to adapt to the needs of consumers.

With the improvement of living standards, people are more and more selective to food consumption. High-quality food products have undoubtedly become the first choice for consumers.

At present, the stock of wheat in China is high, but the supply of high-quality wheat falls short of demand. High-quality wheat such as Canada and the United States have become "hot goods" in the Chinese market. According to the latest import data released by the General Administration of Customs, China imported 210000 tons of wheat in September and 340000 tons in August, down 38.24 percent from the previous month and up 57.19 percent from a year earlier. A total of 2.2493 million tons of wheat were imported from January to September; while a large number of policy rice could not get out of the warehouse, domestic high-quality rice, national first-class rice, such as northeast high-quality japonica rice, southern Huanghua sticky rice, silk seedling rice and so on, did not worry about the market. The yield of ordinary corn is low. This year, Luyu 9105, a high-quality maize variety with disease resistance, insect resistance and high yield potential, planted in Zhang Huai Village, Taihe County, Anhui Province, has created a demonstration field with a yield of 2099.8 jin per mu, setting a record for the highest per unit yield of summer corn in Anhui Province.

"if you are not afraid of knowing the goods, you are afraid of comparing the goods." Most of the unsalable grain products are of poor quality and can not meet the needs of consumers. As long as it adapts to the needs of consumers, there will be no shortage of sales.

The cultivation of high-quality grain varieties not only takes a long time, but also needs the support of high technology. In order to avoid the problem of insufficient strength and weak dispersion of each household, relevant state departments and agricultural departments at all levels should support breeding policies and attach great importance to the cultivation, breeding, and promotion of high-quality grain varieties, so as to benefit more farmers.

While developing high-quality grain production, we should also pay attention to the production of organic, green, and pollution-free grain products, on the one hand, to meet the needs of consumers at different levels of consumption, and on the other hand, to reduce the use of chemical fertilizers and pesticides, reduce pollution, improve the ecological environment, and improve people's health.