Ministry of Agriculture: China's wheat is increasingly lack of international competitiveness

Seven Trends of Wheat Industry Development in China

In recent years, there have been some new changes in the development of China's wheat industry, which will directly change the development model of China's wheat industry, which deserves great attention. Specifically, it is mainly manifested in the following seven major trends.

Trend 1: the degree of scale and mechanization of wheat production is constantly improving. By the end of 2014, the national land transfer area was about 403 million mu, accounting for 30.4% of the household contracted cultivated land area. There are more than 3.414 million professional households with an operating area of more than 50 mu and more than 870000 family farms. In the transfer of land use, wheat and other grain production accounted for more than half. In 2014, the mechanization level of comprehensive crop farming and harvesting machines exceeded 60 percent, the level of mechanization of grain production continued to improve, and the whole process of wheat production was basically mechanized throughout the country, which further accelerated the development of large-scale. Under the effect of scale and mechanization, profound changes will take place in the management scale and production mode of wheat per capita of 4.5 mu in our country.

Trend 2: the commodity rate and circulation efficiency of wheat in China are constantly improving. The market-oriented reform of China's grain circulation system has been more than a decade, and the commodity rate and circulation efficiency of wheat have been improving continuously. Before 2005, the commodity rate of wheat in China was only 30% and 40%, and farmers' inventory accounted for a large proportion of the inventory of the whole society. With the changes in the mode of production such as mechanization and the growth of farmers going out to work, at present, wheat farmers in our country basically collect wheat and sell it on the spot, and the national wheat commodity rate is estimated to be as high as more than 80%. According to a survey in Anhui Province, 85% of farmers basically do not store wheat, 10% of them store 300 jin of wheat, 5% of them store more than 300 jin of wheat, and 95% of them sell all their corn. Under the effect of the national minimum purchase price policy in the past decade, the characteristics of China's wheat policy market are becoming more and more obvious, but with the continuous expansion of the price gap at home and abroad, the space for policy support of the market in the future will be smaller and smaller, and the minimum purchase price of wheat will remain stable in 2015. the main body of the acquisition is becoming more and more diversified, and the circulation efficiency of wheat will be higher and higher.

Trend 3: China's flour processing industry has entered a period of accelerated merger and reorganization. With the promotion of the reform of China's grain processing industry and the improvement of the degree of opening up, the production capacity of wheat processing enterprises is expanding rapidly, the scale of enterprises is constantly expanding, the focus of processing distribution is transferred to the main producing areas, and the competition in the industry is intensifying day by day. Small-scale enterprises will accelerate their withdrawal from the market, and it should be said that they have entered an accelerated period of merger and reorganization and survival of the fittest. In 2013, the output of wheat flour of large-scale agricultural products processing enterprises nationwide was 132.05 million tons, an increase of 4.2 percent over the previous year. There are 1875 wheat flour production enterprises above scale, mainly concentrated in Henan, Shandong, Anhui, Jiangsu, Hebei, Shaanxi and other regions. The output of wheat flour accounts for 86.3% of the country's total, and the trend of enterprise scale is obviously enhanced. In 2015, the traditional profit model of flour processing is faced with great challenges, it can be said that most or even most of the enterprises will be at a loss, which will further accelerate the restructuring and layout of the flour processing industry.

Trend 4: the total consumption of wheat in China is steadily increasing and changing in structure. China's wheat consumption has shown a moderate growth trend in recent years, and the total consumption is estimated to be more than 120 million tons in 2014 and 2015. However, it should be noted that the consumption of wheat rations in China is basically stable at about 90 million tons, and the biggest fluctuations are feed grain and industrial grain. For example, in 2011, due to the upside-down price of wheat and corn, about 30 million tons of wheat was directly used as wheat processing feed. In 2015, because the price of wheat was higher than that of corn, feed consumption of wheat was only about 15 million tons. The annual consumption of wheat for liquor processing in China is about 700-8 million tons, which has also decreased in the past two years.

Trend 5: the resource and environmental constraints of wheat production in China are increasing. With the development of industrialization and urbanization, agricultural resources such as cultivated land and water continue to transfer to the outside of agriculture, and the resource environment constraints faced by the development of wheat production are strengthened. In terms of planting area, China's wheat production has basically increased in the past decade, with only 360 million mu at present, a decrease of 90 million mu compared with 1997. In terms of water use, agriculture is a major water user in China, and wheat is also a major water user in crops. Under the background of water resources that are more scarce than land resources, China's wheat production will face unprecedented constraints. In particular, wheat production in the main producing areas such as North China, where water resources are most scarce, will face greater challenges. Even in some areas with serious over-exploitation of groundwater, there is an urgent need to restore the fragile ecological environment by returning wheat to fallow.

Trend 6: China's wheat is more and more lack of international competitiveness. The shortage of agricultural resources such as soil and water per capita is the fundamental reason for the lack of international competitiveness of family planning agriculture in Asia, and it is difficult to change. In the past decade, except that the international wheat price is higher than the domestic wheat price during the global food crisis, most of the time is due to the lack of price advantage of domestic wheat, and the domestic and foreign price gap is getting wider and wider. In particular, international wheat prices have continued to show a downward trend since May 2014, while domestic high-quality wheat prices have shown a steady and moderate upward trend, and the price difference after landing tax has been expanding compared with the domestic price differential. the price difference has risen from 899 yuan / ton in January to 1136 yuan / ton in June 2015. the price advantage of international wheat is increasing. It should be noted that the price difference between domestic and foreign wheat will exist for a long time, and the price difference will continue to expand, and China's wheat will face more and more pressure of international competition in the future.

Trend 7: China's wheat industry support and protection policy will be more systematic. After China's entry into WTO, China has initially established a wheat industry support policy based on minimum purchase price and four subsidies, but in recent years, the disadvantages of these policies have become increasingly obvious, such as the subsidy is not linked and the support space is limited, the continuous increase of the minimum purchase price leads to the widening of the price gap at home and abroad, and so on. In the face of more and more complex and challenging development environment, we need to take a variety of policies and measures to ensure the healthy development of China's wheat industry in the future: first, to increase green box policy support. It mainly includes increasing investment in wheat technology research and development, establishing wheat water-saving subsidies, ecological restoration subsidies in main producing areas, insurance subsidies and so on. The second is to make good use of the precious trace license this yellow box policy space. It mainly includes the stable application of the minimum purchase price policy, the tilting of new subsidies to new main bodies, the increase of various forms of financial support such as discount loans, and the third is that the 65% import tariff on wheat should not be lowered in all multilateral and bilateral trade negotiations. this is the most important strategic line of defense to ensure the healthy development of China's wheat industry.