The Reform of temporary Corn Collection and Storage Policy is imperative

In September 2015, the National Development and Reform Commission, the Grain Administration, the Ministry of Finance, the Agricultural Development Bank and other departments jointly issued the Circular on the acquisition of temporary stored Maize in Northeast China in 2015. In 2015, the state will continue to implement the temporary corn collection and storage policy in the three northeastern provinces and Inner Mongolia Autonomous region. The corn collection and storage listing price is set at 1 yuan per jin (the national third-class quality standard), which is more than 10% lower than in 2014. It is the first time that the corn temporary storage purchase price has been lowered since the state launched it in 2008. On October 18, 2015, the state formally issued some opinions of the CPC Central Committee and the State Council on promoting the reform of the price mechanism, proposing to improve the price formation mechanism of agricultural products, pay attention to the role of the market in forming prices, and reform and improve the corn collection and storage system.

The reduction of temporary reserve price is the return of the market law.

Since the implementation of the corn temporary storage policy in 2008, in the past eight years, farmers have gradually become dependent on the path of the national temporary collection and storage policy, and have gone further and further under the protection of the high purchase price of the national corn temporary storage policy, without considering the demand of the market. the trend of "policy" in the corn market is prominent, and the path dependence of all parties in the market on the policy is becoming more and more serious. However, the temporary storage policy has been difficult to sustain because of the long-term large internal and external price difference, huge inventory and the shrinkage of corn production industry chain.

According to the original intention of the policy design, the temporary collection and storage policy needs to focus on "temporary". Whether the country buys or not, the purchase price and so on should be determined according to the market situation of that year, and should be adjusted flexibly accordingly. However, this policy, which is supposed to move with the market, has deviated from the original intention of the policy design in the actual operation. over the past eight years, the price of this "temporary" has risen steadily, from 0.74-0.76 yuan in 2008 to 1.11-1.13 yuan in 2014, an increase of as much as 50%. And the expectation of "only rising but not falling" has increased, and the number has changed from limited acquisitions designed at the beginning to open acquisitions. This will inevitably lead to the failure of the market adjustment mechanism, so that downstream enterprises, inventory pressure and financial funds, are overwhelmed.

Under the action of economic laws, no commodity can only rise without falling. Objectively speaking, the rising temporary collection and storage price has become a thorn stuck in the middle of corn production and marketing channels, making it difficult for market supply and demand to be in step. Therefore, it is necessary for all market participants to re-understand the real connotation of temporary collection and storage prices. "the policy must not be the best, but it must fully reflect the aspirations of all parties." The reduction of corn temporary storage prices in 2015, rather than canceling, is to take into account the interests of all parties, fulfill its promise of "releasing marketization as soon as possible", reasonably guide market expectations, and make temporary storage prices closer to the market. Thus gradually abolishing the risks contained in the corn market for many years is not only the return of the market law, but also the necessity of the policy to keep the boundary.

Reform is imperative

Under the background of the deepening dependence of all parties in the market on the path of corn temporary storage policy, the state comprehensively considers the interests of all parties, reduces the temporary storage price, starts with reducing market expectations, carries out gradual reform and adjustment, and guides the rational return of the market. The preliminary reduction in the temporary collection and storage price of corn is the most firm signal given by the state on the marketization of agricultural prices. However, the temporary reserve price reform is only one aspect of the market-oriented reform of agricultural products price, and it is only in the initial stage. The reform and transformation of agricultural product price formation mechanism is an important topic at this stage. Price formation mechanism is a major issue that directly affects food production and security, reform and transformation are imperative, but there is a long way to go.

Give prominence to the key points, maintain and release them, and proceed in a gradual and orderly manner. What needs to be emphasized here is that the failure of market regulation caused by the temporary storage policy should be a short-term phenomenon. in the long run, China's self-produced grain is still in and will maintain a "tight balance" pattern for a long period of time, and the market-oriented reform should be promoted. However, food security must be guaranteed, so the market-oriented reform of agricultural products should not be too radical and one-sided. The "opinions of the CPC Central Committee and the State Council on promoting the Reform of the Price Mechanism" clearly states that it is necessary to implement differential support policies for different varieties in accordance with the principle of "giving prominence to key points and keeping them," and based on China's national conditions. The reform breakthrough of choosing corn for temporary collection and storage policy not only demonstrates the state's will to ensure food security and staple grain, but also highlights the development pattern of varieties such as corn, which have large demand elasticity, long industrial chain and high degree of market connection at home and abroad. On the one hand, we will firmly continue to implement and improve the minimum purchase price policy for rice and wheat, ensure the grain circulation operation and management needed by the national strategic reserve, and ensure the basic self-sufficiency of grain and the absolute safety of food rations. On the other hand, we will reform and improve the corn collection and storage system, continue to carry out pilot projects to reform the target prices of cotton and soybeans, pay attention to giving play to the decisive role of market prices in the production of such crops, guide production through market price signals, adjust supply and demand, and promote the sustained and healthy development of the industry. We will implement differential support policies and improve methods for the distribution of subsidies. The immutable support of the market will make farmers form wrong expectations, and eventually affect the formation and role of the price mechanism, leading to market adjustment failure. "highlight the key points, keep and release" is reflected in the support policy, which is to implement differential support policies for different varieties. First, we can adjust and improve the "yellow box" support policy, and gradually expand the scale and scope of the "green box" support policy implementation. Second, we can learn from Japan's "variety, multi-level" tax subsidy policy to promote the precise reform of China's agricultural subsidy mechanism, support the adjustment of agricultural industrial structure, protect farmers' enthusiasm for production, and promote the sustainable development of agricultural production. Third, make full use of the target price subsidy policy. Replacing the temporary collection and deposit policy with the target price subsidy policy can not only effectively protect the basic income of producers, mobilize the enthusiasm of market participants, but also let the market play a decisive role in resource allocation and reduce market distortions. reduce the pressure on the government to collect and store. Fourth, implement land subsidy. It is found that the efficiency of direct subsidy to farmers according to planting area is significantly higher than that according to specific products and sales volume, and transfer payment can achieve higher results. Therefore, to implement the subsidy policy linked to land, we do not need to pay too much attention to the production structure of agricultural products, give subsidies directly according to the planting area, and let the market mechanism play a full role, so that the production structure of agricultural products can be adjusted more scientifically and reasonably. Fifth, the government can purchase grain from producers directly at the market price in the form of orders as needed, instead of promising to buy it in the market. This not only achieves the purpose of maintaining a scientific and reasonable stock quantity, but also protects agricultural producers without distorting the market.

We will strengthen the disclosure of information and rational policy guidance. Incomplete information and information asymmetry are important aspects that restrict farmers' production decision-making and risk management. Due to the influence of traditional information acquisition channels and low sensitivity to policy information, farmers are unable to make production decisions in a timely, scientific and reasonable manner. For this reason, the government should benefit the broad masses of farmers by means of science and technology popularization and knowledge propaganda to the countryside, and guide farmers to make full use of traditional and modern information channels to obtain the latest agricultural science and technology information. and learn to analyze and use to make production decisions and participate in market-oriented production operations. In addition, in terms of policy and financial resources, we should vigorously support the development of farmers' professional cooperatives and actively guide the broad masses of farmers to take the road of large-scale production and professional cooperation, resource sharing and scientific production.

We will continue to strengthen policy support and lead rural financial reform. Formulate corresponding preferential or subsidy policies for agriculture-related financial institutions, implement dynamic differential policies, stimulate financial institutions to shift their attention to rural financial markets, and constantly improve the level of competition and financial support in modern agricultural financial markets. All financial institutions should follow the development ideas of the rural market in accordance with the credit products, innovate the credit products, and realize the effective connection between the innovation of the financial products and the development of the new agricultural operators. On the basis of combing and classifying the existing credit products, we should further expand the service clients and constantly meet the needs of the development of modern agriculture.