MySheen

The value of grain brokers should be respected.

Published: 2024-09-16 Author: mysheen
Last Updated: 2024/09/16, Grain brokers, commonly known as grain traders, are a group of people who go from village to house to buy and sell grain. Of course, brokers look magnificent and foreign. Grain brokers have been operating publicly in a legal capacity for no more than a decade. China's grain circulation market is completely liberalized.

Grain brokers, commonly known as "grain traders", are a group of people who go from village to house to buy and sell grain. Of course, brokers appear magnificent and foreign. Grain brokers have been operating publicly in a legal capacity for no more than a decade. Before the complete opening of China's grain circulation market, that is, before 2004, non-state-owned entities could not buy farmers' grain, and farmers' surplus grain could only be sold to the state. At this time, there are also some grain traffickers who secretly buy farmers' grain, but have no legal identity. After 2004, the status of grain traffickers was legalized, and they were able to purchase farmers' grain openly.

For grain brokers, there is no clear definition. According to the author's understanding, grain brokers themselves do not really collect, store or process grain, they only help grain collection, storage and processing enterprises to collect grain from farmers and earn hard work or running errands, but the price difference cannot be earned. Why would you say that? Because grain brokers generally do not have storage facilities, they will not put the grain in the warehouse and wait for the right price to resell to earn the difference. In fact, if grain brokers have their own storage facilities, they can no longer be called brokers, but grain traders. Grain brokers generally collect grain from farmers' homes and sell it directly to state-owned grain depots or private trade processing enterprises on the same day or every two or three days, and grain enterprises actually outsource grain procurement to them.

So the question is, why are farmers willing to sell grain to grain brokers rather than directly to grain enterprises? Why don't grain enterprises directly purchase farmers' grain themselves? For farmers, it is easy and labor-saving for grain brokers to make door-to-door purchases, and it can be said that grain enterprises do not have to face a large number of "retail investors" directly. This is the value of grain brokers, they do the dirty work, of course, they are not living Lei Feng, they will earn a meagre intermediate fee. The cost is jointly paid by farmers and grain enterprises. If we forcibly ban grain brokers, prohibit grain brokers from providing such services, let farmers hand over grain directly to enterprises, and let enterprises face farmers directly, then the increased expenditure of farmers and enterprises will be significantly greater than the fees they pay to grain brokers. In other words, the existence of grain brokers improves the efficiency of grain circulation and saves the wealth of the society. They do not live on the price difference, their activities themselves create wealth for society.

Over the years, many of the grain collection and storage of state-owned grain enterprises and the government's policy grain purchases have been done through the intermediate role of grain brokers. Some people think that grain brokers "eat" farmers at one end and the government at the other, and that they have taken away some of the benefits of the policy, that is, they do not understand the above reasons. It is often reported that grain brokers buy farmers' grain at low prices and sell them to state-owned grain depots at high prices, saying that farmers have suffered losses and the government has suffered losses. In fact, rational readers should analyze it for themselves. If farmers really feel that they have lost money, why not sell them directly to grain depots? If the state-owned grain depot thinks the price is high, why not go directly to the farmers to buy low-priced grain? It is difficult to distinguish between true and false news reports in modern society. Without independent thinking and rational analysis, it is easy to be led by public opinion, or even be used as a gun by others. Some time ago, the fake news of "zombie meat" caused such a great response that many people had an inexplicable fear of imported meat, which is typical of being fooled. In fact, people with a little knowledge of economics will know that no one in the world will deliberately store meat for decades to sell, because meat is not that the older the wine, the more valuable it is, on the contrary, the longer it is, the more worthless it is.

Back to the topic of grain brokers, the reason why the media and society do not think highly of it is that they have neglected the circulation link for a long time, thinking that the circulation link is only "exploiting" producers and consumers, and does not create value, so it is a parasitic group. Based on this wrong thinking, we always want to bypass the intermediate link and let consumers face the producers directly, thinking that it can reduce the price of goods. This is actually a very wrong idea. For example, when we go to the vegetable market to buy vegetables, a considerable part of the price of the vegetables is actually paid to the vegetable traders, and the producers get a very small proportion. The cheaper the vegetables, the lower the proportion, some of which are less than 1/10. So, can letting farmers go directly to the city to sell vegetables can reduce the price of vegetables and increase the income of farmers? In fact, it will not, on the contrary, vegetable prices will rise and farmers' income will decrease. Because selling vegetables is also a knowledge, from how to choose the place to sell vegetables, how to choose with vegetable varieties, how to price to how to determine the stock, and so on, all need the accumulation of knowledge and experience. Farmers who go to the city to sell vegetables part-time obviously do not have this knowledge, which means that the efficiency of farmers selling vegetables directly is significantly lower than that of vegetable vendors, and low efficiency means high cost, so their asking price will only be higher than that of vegetable vendors, not lower. But the income that falls into one's own pocket will not increase as a result. In "charcoal seller", Bai Juyi describes the image of a poor charcoal seller who "worries about charcoal and wishes cold weather". This charcoal seller is a part-time worker who burns charcoal and ships it to the city to sell. In fact, if there is a special "carbon trader" door-to-door carbon collection, charcoal sellers will concentrate on charcoal burning will not helplessly pull a cart of charcoal in the cold weather to try their luck in the city. However, in ancient times, due to the importance of agriculture over commerce, the livelihood of "carbon traders" was greatly suppressed, and the circulation of commodities was underdeveloped, which was a great loss to both producers and consumers.

In a self-sufficient economy and society, production is largely satisfied with its own consumption, and the circulation link is naturally dispensable; however, the modern economic society is a society of division of labor, production and consumption are "disjointed". The things produced are often not consumed by themselves, and those consumed by themselves are often not produced by themselves. at this time, the importance of the circulation link is highlighted. To some extent, circulation is even more important and more valuable than production. How did the economic crisis under the market economy come from? It is just that production and consumption do not match well, which is caused by overproduction. If the efficiency of the circulation link is high enough, and the signal of the consumer side is quickly transmitted to the production side through the circulation link, the economic crisis will not occur so easily. The reason why Alibaba can be worth trillions of yuan is because it has greatly improved the efficiency of goods from production to consumption, which in itself is creating great wealth. At present, the efficiency of grain circulation in China is still not high. In the face of the extremely scattered grain production situation, the value of grain brokers should be respected.

 
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