Foreign media: China will revise the grain import quota system to crack down on corruption

Beijing, Nov. 21 (Xinhua) according to Chinese officials and industry insiders, China plans to revise its grain import quota system to crack down on corruption and control the country's grain reserves.

China will change its import quota system this month, a dialect, deputy director of the Agricultural and Economic Department of China's Development and Reform Commission, told Reuters.

In China, low-tariff quotas are allocated to state-owned enterprises and some private enterprises. China is one of the countries with higher food prices in the world, and these import quotas have become a cash cow for related companies.

"at present, some companies bribe government officials to obtain quotas, resulting in flour mills and other downstream companies being excluded from import quotas," said Ma Wenfang, an analyst with Beijing Oriental Iger Agricultural Consulting Co., Ltd. "

Ma Wenfang's company has proposed to replace the current quota system with public bidding. Public bidding allows enterprises to bid on quotas.

Affected by the revision of the import quota system, the government postponed the allocation of import quotas for grain and cotton in 2015, which was previously announced at the end of September.

Under the framework of WTO quotas, import tariffs can be as low as 1 per cent, while China imposes higher tariffs on those exceeding fixed quotas in order to protect Chinese farmers. For wheat, for example, companies without import quotas may end up paying tariffs as high as 180%.

The global price gap between agricultural products has fuelled the black market, where companies can sell their quotas for high profits, for example, the price of cotton in China is 40% higher than the import price.

Companies with cotton import quotas sold to processing companies at a price of 4000 yuan per ton, Chinese media reported in March, citing the China Federation of Industry and Commerce.