The purchase by the government led to the suspension of production of 80% of the northeast rice factory due to lack of grain.

The government spends hundreds of billions of yuan to buy grain every year, which is intended to protect farmers' enthusiasm for growing grain, but it has affected the normal market circulation and caused many serious problems. After the listing of New Rice in Northeast China last year, processing companies routinely planned to acquire raw materials for the whole year within six months. However, as the State Reserve entered the market to collect grain, all the new rice was harvested in two months, resulting in the shutdown of 80% of the rice factories in the northeast.

The purchase by the government led to the suspension of production of 80% of the northeast rice factory due to lack of grain.

The grain problem in China today is more complicated than many people can imagine.

In northeast China, although it is the main rice producing area, about 80% of the rice mills have stopped production because of insufficient raw materials.

To solve China's grain problem and find a way for the sustainable development of China's grain industry, China Business Daily interviewed Mu Yankui, who is now one of the largest grain and oil processing enterprises in the country.

Grain inventory "dammed lake"

Since 2008, the government has entered the grain circulation market on a large scale through policies such as supporting the market, and a large number of high prices of raw grain have been received to the national reserve.

Mu Yankui said that the original intention of the government is to protect farmers' enthusiasm for growing grain, but due to the lack of modern grain processing industry as a digestion channel, a large amount of grain is hoarded in government reserves, forming a "barrier lake." it not only consumes a huge amount of financial resources, but also affects the normal circulation of the market, and further affects the healthy development of processing enterprises. This has entered a vicious circle, causing a lot of serious problems.

First of all, processing enterprises are forced to stop production because of the poor supply of raw materials. For example, after the listing of New Rice in Northeast China last year, processing companies routinely planned to acquire raw materials for the whole year within six months. However, as the State Reserve entered the market to collect grain, all the new rice was harvested in two months, resulting in the shutdown of 80% of the rice factories in the northeast.

The second is the financial burden. A large amount of raw grain goes into the reserve, and the state has to pay hundreds of billions of funds every year for grain purchase, infrastructure construction, manual storage, interest expenses and so on.

The third is food safety. New grain must be stored in the reserve for more than 1 to 3 years before it will be put on the market, so not only consumers can not eat fresh rice, but also the problem of aged grain, which brings great hidden danger to product quality.

In addition, the government's high price to support the market has also caused domestic grain prices to be much higher than those in the international market, thus prompting neighboring countries to import and smuggle large quantities of cheap agricultural products into China, which is obviously not in line with the original intention of the policy.

Fifth, the government buys corn in Northeast China, which causes the price of corn in Northeast China to be higher than that in North China, which causes a large amount of corn in North China to flow into Northeast China, which not only causes a lot of waste of social resources, but also makes the corn processing plants in Northeast China lose their market competitiveness due to high prices of raw materials, resulting in serious losses. According to incomplete statistics, Hebei alone has returned more than 5 million tons of corn to Liaoning this year.

Expand the pilot project of target price subsidy

In 2014, the No. 1 document of the Central Committee decided to launch the pilot project of target price subsidy for soybean and Xinjiang cotton in Northeast China and Inner Mongolia, continue to adhere to the principle of market pricing, explore the reform of decoupling the price formation mechanism of agricultural products from government subsidies, gradually establish a target price system for agricultural products, subsidize low-income consumers when the market price is too high, and subsidize producers according to the price difference when the market price is lower than the target price. Earnestly guarantee the income of farmers.

Mu Yankui said that the original purpose of the protective price acquisition and temporary storage system was to protect the interests of farmers, but because of direct intervention in prices, the government directly entered the market to collect grain, disrupting the order of market operation. According to the spirit of the third Plenary session of the CPC Central Committee, this violates the principle that the market plays a decisive role in the allocation of resources. This kind of policy is an extraordinary policy in an extraordinary period, and the state should carefully evaluate its necessity when starting such a policy, so as not to turn it into a regular policy.

The target price subsidy system and the target price insurance mechanism can strike a good balance between protecting the interests of farmers and maintaining the order of market operation. Mu Yankui said: this year's "No. 1 document" proposed a pilot target price subsidy system for soybean in Northeast China and cotton in Xinjiang, and we sincerely hope that the pilot work will be carried out smoothly and be extended to other varieties as soon as possible.

The Breakthrough of Food Security in Modern processing Industry

Yihai Kerry launched the first bottle of Jinlongyu brand small package edible oil to the market in 1990, which helped Chinese consumers upgrade their consumption from earth pressing oil to refined oil. this year, domestic edible oil enterprises, including Yihai Kerry, vigorously promote non-genetically modified edible oil products in the market, and the edible oil market has reached a new stage from satiety to good eating.

Mu Yankui said: after less than 20 years of development, earth-shaking changes have taken place in China's oil industry. In the past, there was no modern oil factory, but now it has the largest and most advanced edible oil industry in the world. China's edible oil market is abundant in quantity, stable in price, various in category and safe in quality. However, on the other hand, our grain processing industry is still in a very backward stage of development.

Mu Yankui believes that the modern grain processing industry is the most important breakthrough to solve the "three rural issues" and "food security issues." At present, the "three rural issues" and "food security issues" are mainly promoted by the strength of the government. In order to give better play to the market force in the future, we must give full play to the traction role of the grain and oil processing industry.

China is a large agricultural country, but it is not yet an agricultural power, Mu Yankui said. The main reason is the backwardness of the agricultural products processing industry. At present, the competitiveness of our oil processing industry is the leading in the world, but there is a big gap in the grain processing industry. The added value of our agricultural products processing is less than 50% of that of developed countries, lagging behind developed areas such as Europe, the United States, Japan and South Korea.

Take rice processing as an example, a large comprehensive rice processing plant can burn rice husks to generate electricity, extract rice oil from rice bran, extract dietary fiber from rice bran meal, and rice husk ash to extract more than 30 kinds of high value-added products such as silica and activated carbon. If 200 million tons of rice produced by China every year can be processed according to this circular economy model, it can not only increase value by 100 billion to 200 billion yuan, but also save more than 20 million tons of coal every year, reduce carbon dioxide emissions by 300000 tons, and produce more than 2.3 million tons of rice oil, which is equivalent to the output of 110 million mu of soybeans.

Mu Yankui suggested that the state should increase support and guidance for the modern grain processing industry and raise the development level of the grain processing industry as soon as possible, so as to lay a solid foundation for our food security and food safety management.