The cost of high grain self-sufficiency domestic grain prices are 50% higher than those abroad.

Abstract: the average price of domestic grain is half higher than that of foreign countries. In domestic consumption, rice and corn account for a high proportion, while wheat and soybeans account for a low proportion. If consumption is used as a weighted average, the result is about 50%. Such a high domestic grain price is one of the costs of high self-sufficiency in grain.

As mentioned earlier, our current food supply is "highly self-sufficient in grain and absolutely safe in food rations." According to the data, in 2012, the self-sufficiency rates of rice, wheat and corn were 99%, 97.3% and 97.6% respectively, while the self-sufficiency rate of soybeans was lower, only 18.4%, but the proportion of soybeans in the whole grain composition was small, and the overall grain self-sufficiency rate was still 88%. Looking at this set of data, the author's first reaction is to breathe a sigh of relief: our food security does not seem to be a big problem, and the self-sufficiency rate is still very high.

However, while jubilant, I would also like to ask ──, what price have we paid for this? Is the price paid wisely? You know, everything in this world has a cost, and nothing comes for nothing. The cost is either paid by yourself or by others, either now or in the future. To paraphrase a jianghu slang in the movie: if you come out to hang out, you will have to pay it back sooner or later.

Domestic grain prices are 50% higher than those abroad.

A high degree of self-sufficiency in grain means that there are not many imports. If foreign prices are high, or grain prices are about the same at home and abroad, there is nothing wrong with less imports. So what is the actual situation? Figure 1 compares the domestic and international prices of four major grains. I really don't know. I was shocked by the comparison. The prices of rice, corn, soybeans and wheat are much higher in China than in the world, with prices higher than 73,180,530 and 103 US dollars per ton respectively. If you look at the proportion, it is 17%, 88%, 60% and 33% higher respectively.

The simple average of the above four figures is 50%, which means that domestic food prices are on average half higher than abroad. In domestic consumption, rice and corn account for a high proportion, while wheat and soybeans account for a low proportion. If consumption is used as a weighted average, the result is about 50%. Such a high domestic grain price is one of the costs of high self-sufficiency in grain.

Here we need to do a little bit of data explanation. The figures above are from the end of 2013, but domestic soybean prices fluctuated widely, from about 2.3 yuan per jin in the first three quarters of 2013 to more than 3 yuan by the end of the year, up almost 30%. Price fluctuations since 2014 are still large, with more than 3 yuan when high and less than 2.3 yuan when low. Considering that the price of more than 3 yuan does not reflect the average price of domestic soybeans, the average price of domestic soybeans in the above picture is 2.4 yuan. If the price at the end of 2013 is used, the price difference at home and abroad will be even greater.

Looking at the 50% price difference at home and abroad, a natural question is, foreign grain is so cheap, why not buy more? If you buy more foreign grain, domestic prices will fall, and the price difference should not be so large. The first thing to ask is whether it is expensive to buy and ship in because of the high freight rate.

No, such a high price difference is far from being explained by transportation costs. America is rich in land resources, and many of China's grain imports come from the Americas. Considering the differences between South America and North America, the freight rates are not exactly the same, less than US $30 and more than US $40. In any case, the transportation cost of less than $50 a ton does not explain the difference in food prices as high as a few hundred dollars. Even the rice with the lowest price difference is $73 a tonne, much more than transportation costs can explain. The price difference between corn, wheat and soybeans is more than $100, let alone the transportation cost.

The practical significance of grain price subsidy

It is the domestic grain protection price that maintains such a high difference in grain prices. In other words, the domestic grain price is not set by the market, but the government sets a purchase price and buys it openly at this price, which is not affected by market supply and demand. At present, the price is much higher than that in the international market, which is said to be to protect the interests of farmers. Here we can make a rough calculation to see how many subsidies farmers have received, and whether this subsidy can fundamentally improve the lives of farmers.

Considering that there are other costs of grain import, the transportation cost is calculated a little more, US $50 per ton, and US $50 is excluded from the price difference between domestic and foreign prices. in this way, the price difference excluding the transportation cost of rice, corn and wheat is about 23, 130 and 53 US dollars per ton, equivalent to 7 cents, 40 cents and 16 cents per jin. The planting area and per unit yield of soybean are not high, and the import is very large, so it is not included in the calculation for the time being. According to the data of the statistical yearbook, the per unit yield of rice, corn and wheat in China is about 900 jin, 780 jin and 670 jin per mu respectively, which is equivalent to 63 yuan, 310 yuan and 110 yuan per mu of land, which is about 160 yuan on average. According to the calculation of 2 mu of land per capita, the subsidies are 126,620,220 yuan respectively, and the total subsidy for a family of three reaches 380,1860 and 660 yuan.

In reality, what crops to grow in the field is not entirely free choice, which is greatly affected by the surrounding irrigation facilities, soil conditions, climatic conditions and other factors. However, even with the most subsidized corn, the annual subsidy is only more than 600 pieces of land per mu, and less than 2000 yuan for a family of three, that is, less than a month's salary for working in the city. At today's income level, this subsidy is really nothing for farmers and does not change their income level and living conditions. If anything, the farmers will hesitate a little when considering going to the city.