Grain prices have fallen sharply, farmers' incomes have fallen sharply, but finance and inventories are under the same pressure.

"Grain prices have fallen too hard this year." Liu Xueyou said helplessly. Liu Xueyou, 51, is a major grain grower in Xi County, Xinyang City, Henan Province, with more than 16000 mu of transferred land, accounting for 1% of the arable land in Xi County, and is known as the "grain king of Henan."

The fall in food prices caught him by surprise, and the food was not sold out much. He described that corn has fallen from 1.3 yuan per jin last year to 0.7 yuan now, and wheat has also dropped 0.2-0.3 yuan per jin. "it is normal for big grain growers to lose NT $100,000 or NT $200,000 this year, but for them, if they grow grain for two years at most, if they lose money for two years in a row, they will not be able to survive in the third year. If they do not see a prospect, it is easy for them to give up."

More than 200 kilometers away, Qi Qiuyang, who is also a big grain grower, has also encountered "difficulties in selling grain" this year. Qi Qiuyang, the legal representative of Shengkang Family Farm in Sheqi County, Nanyang City, Henan Province, was named "National Grain grower" by the Ministry of Agriculture in 2014. He also looked depressed when he saw the reporter, and even complained, "expectations are empty words and useless."

In late October this year, a reporter from China Business Daily conducted a survey in several counties in southern Henan and found that it was difficult for farmers to "sell grain" this year, not only because the quality of wheat was not up to standard, but also because of the sharp drop in corn prices, resulting in high yields but no increase in income. The price drop reflects the urgent adjustment of the domestic minimum purchase price policy and temporary purchase and storage policy, because the implementation cost of these policies is too high, resulting in excessive financial and inventory pressure. and contributed to the expansion of grain price differences at home and abroad.

The Central Committee has attached great importance to the difficulty of selling grain. On November 11th, Premier Li Keqiang presided over an executive meeting of the State Council, pointing out that there was another bumper harvest this year, but there were also problems such as a substantial increase in inventories and falling prices. At present, it is time for autumn harvest and winter planting, so it is necessary to take more measures to effectively protect the interests of farmers and their enthusiasm for growing grain. This includes increasing investment in the construction of warehousing facilities, stepping up the introduction of policies to encourage processing enterprises to buy grain in the market, safely digesting existing stocks, changing the mechanism for the formation and collection of grain prices, and promoting the conversion of sloping land to forests in the south. We will promote fallow farming and the rotation of corn and soybeans, expand the pilot scope of "changing grain to feed", and promote the adjustment of planting structure.

The quality of wheat is not up to standard due to overcast and rainy weather.

Thanks to the central policy, the most obvious manifestation is that 12 consecutive central documents focus on "agriculture, rural areas and farmers", as well as the strong financial support of the central and local governments to agriculture. By 2015, China will achieve 12 consecutive increases in total grain output. In addition, the contribution of the minimum purchase price policy, which began in 2004, and the temporary reserve policy, which began in 2008, is also quite obvious.

The policy of minimum purchase price is aimed at key areas and key grain varieties, and has been implemented in China since 2004; in 2005, the state launched the implementation plan of minimum purchase price for rice in some major rice producing areas in the south for the first time; in 2006, the implementation plan of minimum purchase price for wheat was launched in some major wheat producing areas. The temporary collection and storage policy began in 2008, including corn and other crop varieties, to stabilize the market, to solve the problem of difficulties in selling corn and falling prices for farmers in Northeast China, and to protect farmers' interests and enthusiasm for growing grain.

As far as the government is concerned, the original intention of this policy is to avoid damaging farmers' enthusiasm for growing grain and repeating the mistake of "cheap grain hurts farmers". China National Grain Reserve Management Corporation is the main body entrusted by the state to implement the minimum purchase price policy and temporary purchase and storage policy.

Liu Xueyou said: in previous years, after the grain harvest, the main destination was to be transported to the China Grain Reserve Depot, and grain brokers sent cars to pull the grain. Under the protection of the purchase price in the entrusted market, the annual income from grain sales is very stable, but this year the situation has taken a sharp turn for the worse. "for large farmers who cultivate land this year, they will lose money as long as the land transfer fee per mu exceeds 500 yuan, and the income and expenditure of farmers controlled within 500 yuan is basically flat."

Xixian County, where the Huaihe River runs through the whole territory, is mainly composed of low and flat plains and gentle hills, which is suitable for planting two crops a year, and the planting structure is "wheat + corn" and "wheat + rice".

The income of farmers depends on two factors, yield per mu and grain price. Liu Xueyou said that the grain output this year is OK, and the two-season crops per mu can reach 1700 to 1800 jin, but the profit is small. The input of wheat and corn is about 400 yuan per mu. If the cost of land transfer is 500 yuan, the cost of farming is close to 1000 yuan, but grain prices have dropped across the board this year. According to the income of 700jin per mu, price 0.90 yuan, corn 1000 jin, and price 0.70 yuan, the net income per mu is slightly over 300 yuan. Of course, the output and quality of grain are greatly affected by weather factors, and grain prices will fluctuate up and down.

Liu Xueyou said: it is normal for large grain growers to lose one or two hundred thousand yuan in farming this year. The main reason is that the grain price market is too low, too ruthless grain prices, compared with last year's market, wheat per jin is 0.3 yuan lower, corn is 0.5 yuan lower. And the reality is that the road of stable returns from grain reserves in the past will not work this year. The reason is that, in the wheat harvest period, Xixian encountered overcast and rainy weather, wheat quality was affected, imperfect grain height.

What is an imperfect grain? According to the definition of the latest wheat national standard (GB1351-2008), the damaged but useful grains of wheat include insect eroded grains, diseased grains, damaged grains, budding grains and mildew grains. The implementation Plan for the minimum purchase Price of Wheat and Rice in 2015 takes the national standard third-class wheat produced in 2015 as the standard, the imperfect grain of third-grade wheat is less than 8%, and the lowest fifth-grade wheat is less than 10%.

Yang Zanqun, deputy director of the Xixian Grain Bureau, told China Business Daily that the number of wheat varieties has dropped significantly this year, which is very different from the standards required by the collection and storage policy. After repeated investigations by extensive and in-depth farmers and purchasing sites, the Grain Bureau found that the imperfect grains of wheat in the county are basically more than 15%, some even more than 30%, few meet the standards, and basically only exist in individual farmers.

As the grain brokers bought grain from small farmers, this made the wheat that reached the standard and the wheat that did not meet the standard "mixed together", and the imperfect grains of wheat after sampling could not meet the standard. This year, the county opened a warehouse capacity of 100000 tons, but as a result, not a single grain was brought in. Yang Zanqun said that Liu Xueyou is not only a big grower, but also buys the grain of other farmers. Due to lax control, the imperfect grains of wheat also exceed the standard. "We also specially went to the scene and carried out a field inspection in his warehouse."No one dares to accept it if it does not meet the standard."

According to media reports, this year, in Hubei, Anhui and some parts of Henan Province, they all encountered overcast and rainy weather during the summer wheat harvest, resulting in a high proportion of imperfect grains of wheat in this region. can not meet the state's minimum standard for the purchase of imperfect grains of wheat in the city, no more than 10% of imperfect grains can be purchased into the warehouse. This leads to the dilemma that it is difficult for farmers to sell grain and it is difficult for grain stations to collect grain. In view of this situation, the relevant departments of the central government and the three provinces of Hubei, Henan and Anhui have issued corresponding policies to solve the problem of farmers'"difficulty in selling grain".

The adjustment of temporary storage policy led to a sharp drop in corn prices.

Generally speaking, the highest prices of wheat and corn appear before the new grain comes on the market.

Statistics show that the highest amount of wheat is 2600 yuan / ton from March to April and that of corn is 2400 yuan / ton in August. However, after the purchase of wheat support market on September 30th, the price of wheat was about 2400 yuan / ton. in mid-late October, the price of wheat fell to about 2200 yuan / ton, a drop of nearly 10%, down 15.4% from this year's high.

Corn prices began to fall in August, from 2400 yuan per ton to 2200 yuan per ton. After the temporary storage price of corn was announced on September 18, the price of corn in North China dropped sharply from 2200 yuan / ton to 1800-1900 yuan / ton, a price reduction of nearly 20%. In late October, when the new grain in North China went on the market, the price fell to 1600-1700 yuan per ton, about 30 per cent lower than the high level.

However, wheat and corn prices have rebounded since then. As of December 16, the price of wheat in China is between 2300-2400 yuan / ton, that of corn in northern China is 1850-1950 yuan / ton, and that in northeast China is 1950-2000 yuan / ton.

And it should be noted that the "sudden" policy of temporary reserve price reduction has been criticized by the industry. Because corn maturing from August to October suffered a temporary price reduction notified in mid-September, the main body engaged in agricultural cultivation can only bear the drop in prices. Some industry insiders said that this lies in the lag of policy makers in learning the information, and the corresponding lack of supporting policies to make up for the losses caused by farmers.

In the face of this year's autumn grain harvest, especially the sharp drop in corn prices, in the interview process of our reporter, most farmers comfort themselves with reasons that they can understand. Some people blame this on the impact of international food prices, while others think that this is in line with the shift of the national agricultural subsidy policy, but it is actually to encourage the transfer of land and cultivate large grain growers (but this time the big grain growers have suffered heavy losses).