Domestic agricultural products market profits eroded by imported products squeeze the market empty

Wan Baorui believes that the policy cost of major agricultural products is too high while collecting, storing and importing. Under the circumstances that domestic grain production has been increased year after year and storage capacity is tight, the surge in imports has further aggravated the domestic situation of "difficulty in selling grain."

The entry of foreign goods into the market and the storage of domestic goods is a strange market circle that China's major agricultural products can not get out of in recent years.

Wan Baorui, a former executive vice minister of the Ministry of Agriculture, is worried that the policy of temporary storage of agricultural products has caused hidden losses of tens of billions of yuan. Recently, he wrote in People's Daily that China temporarily collected and stored 69.19 million tons of corn and 6.29 million tons of cotton from 2013 to 2014, with one-year interest and maintenance costs of about 2000 yuan per ton of cotton stock. The temporary storage of rapeseed oil is as high as 6 million tons. If it is sold at the current market price, the price difference will lose more than 15 billion yuan. The total storage of sugar is about 5 million tons, and the hidden loss is estimated to exceed 20 billion yuan.

Wan Baorui believes that the policy cost of major agricultural products is too high while collecting, storing and importing. Under the circumstances that domestic grain production has been increased year after year and storage capacity is tight, the surge in imports has further aggravated the domestic situation of "difficulty in selling grain."

The soaring cost of agricultural products has eroded most of the profit margins.

Wan Baorui believes that from 1995 to 2011, the output of China's three grains and soybeans per mu increased by 29.1% and 32.8% respectively, but at comparable prices, the total cost per mu increased by 110.2% and 91.8% respectively, and the rate of return decreased significantly. "over the past decade, the factor costs of major agricultural production have basically increased by more than 80%, and some have even doubled." Ma Wenfeng, an agricultural analyst at Iger, told the Daily Business News that "the costs of factors of production such as land rent, chemical fertilizers, pesticides, agricultural film, machinery operations, and labor are all increasing, and the continuous urbanization has played an indirect pushing up effect. From a cumulative point of view, it has exceeded the price increase, that is to say, the marginal output of the factors is sharply decreasing."

The investment in growing grain is increasing, but the profit margin is squeezed, which dampens the enthusiasm of farmers to grow grain. The data show that in 2011, the net profit per mu of planting apples, vegetables and peanuts was 4612 yuan, 2558 yuan and 723 yuan respectively, while the average income per mu of the three staple grains was only 251yuan. The phenomenon of "non-grain" is more prominent after the new agricultural management main body takes over the transfer of land. By the end of 2013, the proportion of "non-grain" in some major grain-growing provinces increased by 20% to 30% after land transfer.

According to the "current situation investigation and Development trend Analysis report of China's Agricultural products Logistics Market (2014-2019)" released by Guanyan World, even under the premise of squeezing the profit space of agricultural products, the price of domestic agricultural products is still among the best in the world. "according to our estimates, the price of China's major agricultural products is the highest in the world." Ma Wenfeng told reporters, "under a monopoly mechanism, the market is inflexible."

Huge hidden loss in impending storage

The cost of agricultural products has risen, but prices have been defeated under the offensive of "foreign goods". Agriculture and farmers are squeezed at both ends, and the hidden losses of agricultural products in the storage are increasing.

Wan Baorui said that in the first five months of 2014, the domestic and foreign price differences of rice, wheat, corn, soybeans, cotton and sugar were RMB318,451,924,1484, 7078 and 2766 yuan per ton, respectively. In fact, the huge price difference carries attractive profits, which brings crowding-out effect to the "domestic products" of agricultural products on the market.

Wan Bao Rui analysis said that while collecting and storing while importing, the policy cost is too high.

Zhang synthetic, director of the Marketing Department of the Ministry of Agriculture, told the media earlier that the fundamental reason for the price upside down is the weak competitiveness of agricultural products in the market due to the shortage of agricultural resources, low labor productivity and rigid rise in production costs. the direct reason is the lack of agricultural support and protection measures such as tariffs and subsidies.

Under the huge hidden losses of "domestic goods" in storage, where should the temporary storage policy go?

A source from the Ministry of Agriculture told reporters that generally speaking, the target price reform system for soybeans and cotton that has been implemented will be extended to most agricultural products, gradually replacing the temporary storage system, but the target price reform for sugar, which is the most popular in 2014, has not been written into the No. 1 document of the Central Committee in 2015, which can only show that as soybeans and cotton are still in the experimental period, the reform is carried out cautiously.