MySheen

Focus on improving the Competitiveness of "China Food"

Published: 2024-12-22 Author: mysheen
Last Updated: 2024/12/22, Focus on improving the Competitiveness of "China Food"

"the issue of food security is no longer a simple issue of supply security, but an issue of industrial security of Chinese agriculture and the security of employment and livelihood of Chinese farmers. Therefore, on the one hand, we should improve the efficiency and competitiveness of agricultural production, and on the other hand, we should make full use of the protection provisions allowed in WTO rules for domestic agriculture to build an agricultural support and protection system that is not only in line with international rules, but also suitable for Chinese characteristics. " At the doctoral Forum held by the China Rural Research Institute of Tsinghua University a few days ago, Chen Xiwen, former deputy head and office director of the Central Rural work leading Group and director of the China Rural Research Institute of Tsinghua University, made an in-depth analysis of the problems facing China's food security.

Lack of price competitiveness is a weakness.

Since the end of 2012, the problem facing China's grain production is that the output has increased continuously, but the price has continued to be higher than that in the international market.

"the reasons for this phenomenon are quite complicated." Chen Xiwen analyzed that, first of all, in recent years, China's grain production costs such as land rents, labor wages, inputs and agricultural services have continued to rise. The minimum purchase price and temporary storage price of grain in the main producing areas also continue to rise. Second, the RMB exchange rate is strong. Compared with 2005, the RMB has risen by about 25% against the US dollar, which means that the price of grain in the international market settled in US dollars has been reduced to enter the Chinese market. Third, the impact of the international financial crisis continues to ferment, with deflation causing global commodity prices to plummet. By the end of 2015, the prices of rice, wheat, corn and soybeans denominated in US dollars in the international market had fallen by 32.3%, 32.2%, 44.8% and 34.9%, respectively. Fourth, global shipping prices have plummeted, and the freight rate of bulk grain from the Gulf of Mexico in the United States to Huangpu Port in Guangdong Province is now only about 1/3 of what it was in 2008. The drop in international grain prices, the drop in shipping prices, and the decline in the exchange rate of the US dollar against RMB are ultimately reflected in a sharp drop in international grain prices entering China's grain market.

However, this does not mean that China's grain production is in a difficult position. There are great differences in resource endowments among countries around the world, which leads to differences in food production costs in different countries. " Chen Xiwen said: in accordance with the rules of the World Trade Organization (WTO), China has reached a management system for opening the agricultural market to the international market, which is mainly the tariff quota system. In this system, the Chinese government undertakes to impose tariff quota management on major imported grain varieties (wheat, corn and rice), that is, a tariff of 1% on grain imported within the quota and 65% on grain imported in excess of the quota. China has promised to import 9.636 million tons of wheat, 7.2 million tons of corn and 5.32 million tons of rice every year. So far, the import quantity of the above three major grains has not reached the quota promised by our country. Due to the tariff quota system, the quantity of the three major grains that can be imported into China is controllable, accounting for no more than 4% of China's current total grain output.

From 2009 to 2011, China has gradually become a net importer of wheat, corn and rice. If domestic grain prices continue to rise according to the trend of previous years, it is estimated that for five to seven years, China's grain prices will be all-round higher than the dutiable cost of imported grain after the 65% tariff, which means that the defense line of the tariff quota system will be lost in an all-round way. In addition, there has been a surge in imports of some varieties not regulated by tariff quotas in recent years, such as soybeans, barley, sorghum and corn, distiller's grains, cassava and so on. These varieties, which are used as substitutes for corn in the feed industry, constitute a serious impact on China's corn market. In 2015, 39.27 million tons of these substitutes entered the Chinese market, together with about 4.73 million tons of corn imported within the quota, which was close to 20% of China's corn output in that year.

"this forces the corresponding amount of domestic corn to lose the market and have to enter the warehouse. This is a major reason for the 'simultaneous increase in grain production, stocks, and imports'. " Chen Xiwen said.

Promote the reform of the formation mechanism of grain prices

Grain price is the most concerned topic for farmers. In 2004, in order to arouse farmers' enthusiasm for growing grain, the state clearly proposed to comprehensively open up the grain purchase and sales market. Since then, in order to avoid the situation of "cheap grain hurting farmers", the State Council has formulated the policy of implementing the lowest purchase price in the main producing areas. From 2008 to 2014, the state appropriately raised the minimum purchase price every year. In these seven years, the minimum purchase price for wheat increased by 63.9%, and the minimum purchase price for rice increased by more than 90%. In 2007 and 2008, the state implemented temporary collection and storage policies for corn and soybeans in three northeastern provinces and Inner Mongolia respectively. By 2014, the temporary collection and storage prices of corn and soybeans announced by the state had increased by 60% and 29.7% respectively compared with the initial implementation.

"the original intention of these two policies is to support the market price, but there are also some side effects in the process of implementation, that is, interference with the market mechanism." Chen Xiwen believes that.

One outstanding performance is that the lowest price and temporary storage price have gradually evolved into the highest price in the market. In Northeast China and Inner Mongolia, the proportion of corn purchased by the China Grain Storage system is also increasing with the increase of temporary corn collection and storage prices. In the main producing areas, the grain purchase and sale market has become a "policy market", and the grain collection and storage market with multi-agent operation and multi-channel circulation actually no longer exists.

Another manifestation is that grain processing enterprises are in operational difficulties, and it is impossible to receive grain at market equilibrium prices, but to buy grain sold at the auction price of stored grain, the profit is too low, resulting in phenomena such as "strong wheat and weak rice" and so on.

To this end, the No. 1 document of the CPC Central Committee this year proposed: "actively and steadily promote the reform of the corn collection and storage system in accordance with the principle of market pricing and the separation of price and compensation."

Chen Xiwen said: it is necessary to speed up the reform of the corn price formation mechanism and let corn prices be determined by market supply and demand, so as to guide the adjustment of the regional layout and variety structure of agricultural production, and promote the supply-side structural reform of grain. At the same time, it is necessary to activate the diversified market subjects of corn purchase and sale, and take relevant policies and measures that are not only conducive to arousing the enthusiasm of processing enterprises, but also conducive to corn destocking, so as to expand the domestic corn demand of processing enterprises. In addition, we should also protect the reasonable income of corn producers, and study and introduce a corn producer subsidy system in line with national conditions and the relevant rules of the WTO, so that farmers can tide over the difficulties smoothly in the fierce market fluctuations.

 
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