Grain prices fall and large-scale grain growers can only break even - do farmers still want to grow grain?

Grain prices have fallen, but do farmers still want to grow grain?

——A survey from Qing'an County, Heilongjiang Province

Large-scale grain growers can only break even, and enthusiasm for land transfer may be affected

On December 9, the Major Snow solar term had already passed, and northern Heilongjiang was freezing cold. A heavy snowfall from a few days earlier still lay thick in the fields, with stray bits of crop straw showing on top.

⟦NL> The cold weather did not have much effect on farmers selling grain. At a collection depot entrusted by Sinograin —— Qing'an County Fenglongquan Jingu Grain Storage Co., Ltd. —— the reporter met large-scale grain grower Zhang Zhiyi.

Old Zhang, 52 this year, lives in Xinsheng Village, Xinsheng Township. He began growing rice right after graduating from junior high school, and before he knew it he had been growing it for nearly 40 years. In recent years, as more relatives moved to the city to retire or went out to work, their land was transferred to his name. Old Zhang's planting area kept expanding, reaching 40 shang this year (one shang equals 15 mu), making him the largest grain grower in the village.

“This year's yield is still decent.” Old Zhang said the yield per shang could reach more than 16,000 jin, basically flat with previous years. Heilongjiang's minimum purchase price plan for rice was launched on October 10, 20 days earlier than in previous years, but the purchase price for standard-grade japonica rice was still 1.55 yuan per jin, and did not rise as rice farmers had expected.

In Old Zhang's view, “not rising is falling.” Although the price was not very satisfactory, he did not wait for the later market. “There is too much grain and it is hard to manage. Selling early saves worry. As soon as the purchase point opened, I found brokers and started selling grain, and now it is basically all sold.” The moisture and impurity content of the rice differed between early and late periods, but on average it still sold for about 1.51 yuan per jin. Gross income of nearly 1 million yuan looked quite considerable to outsiders, but Old Zhang was not satisfied.

“Of the 40 shang of land, only 2 shang are my own. The annual rent for each of the other shang is 10,000 yuan.” Only Old Zhang and his wife farm the land, and many tasks require hired labor. “Labor costs have risen too much in recent years. When transplanting rice, hiring someone to carry seedlings costs 400 yuan a day.” Add in seeds, fertilizer, water, farm machinery and other expenses, and the cultivation cost of one shang of rice is nearly 20,000 yuan. “My 40 shang are divided into 13 plots. During the busy farming season, I leave early in the morning, and by the time I have made a round of all these plots, it is dark. Over the whole year, one shang of land earns only 5,000 yuan. The hard work and the income are truly out of proportion.”

Speaking of his plans for next year, Zhang Zhiyi clearly said, “I do not want to grow grain anymore.” Not only did he not want to contract more land to grow grain, he also planned to transfer out his own land. But Old Zhang worried whether, after seeing this year's market, anyone would be willing to rent the land next year.

Compared with large-scale rice growers, the situation for large-scale corn growers is even less optimistic. This year, the temporary purchase and storage price for corn in Northeast China was 1 yuan per jin, up to 0.13 yuan per jin lower than last year.

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Song Fulin of Shengli Fourth Village, Suisheng Manchu Town, Qing'an County, grew 10 shang of corn, of which more than 8 shang were transferred in. In June and July this year there was low temperature and heavy rain, and in August there was wind damage. Each shang produced only 23,000 jin of corn, a decrease of 3,000 jin from previous years. Because the moisture content was relatively high, the purchase price was also affected, selling for only 0.7 yuan per jin.

Song Fulin said that this year each shang could bring in 16,000 yuan, but land rent alone was 9,000 yuan. Add nearly 6,000 yuan in planting costs and loan interest, and “this whole year was really wasted.” As he said this, there was much helplessness in his words.

He expected corn prices to fall further next year. “Unless land rent also drops sharply, I do not really want to rent land to grow grain anymore.” So said this large-scale grower, who already has more than 10 years of experience renting land to grow grain.

Farmers growing on their own land are not greatly affected. Selling grain with confidence and receiving payment promptly help stabilize farmers' enthusiasm

In Fengshou Village, Fengshou Township, Qing'an County, the place name with its fine meaning let grain farmer Li Zhanguo experience the joy of a bumper harvest.

Old Li, 54, and a family of four farm their own 6 shang of rice. This year's harvest was good, with more than 100,000 jin of rice harvested in total. Because his home is near the Fenglongquan purchase point, he can go sell grain directly himself, even saving the cart fee to brokers. At a purchase price of 1.51 yuan per jin, Old Li's net income from one shang of land was close to 20,000 yuan. “This year, those of us growing our own land and not needing hired labor did well, and the harvest was pretty good.”

When asked whether he would transfer in land to expand the scale, Old Li spoke quite practically: “If the scale is too large, rent and labor costs rise along with it, so it is not worthwhile. We are just considering adding a few more shang within our own operating capacity.”

Although the downward trend in grain prices this year made grain farmers a bit “anxious,” the grain-selling process was more transparent and payments arrived more promptly, which to some extent dispelled their negative feelings.

At Fenglongquan Jingu Grain Storage Co., Ltd., the reporter saw that after a grain-selling truck entered the granary gate and stopped steadily on the weighbridge, the fixed automatic sampler began taking samples. Company general manager Niu Jingsheng said that in the past employees climbed ladders onto the truck bed and used a conical “probe” to take grain for testing, which was inconvenient and not very scientific. Now samples are automatically taken from 10 points, about 20 jin in total, which saves time, and ordinary people(69.96, -0.70, -0.99%) also feel it is fairer.

In the rest room, two display screens caught the reporter's attention. One showed the work scenes of inspectors, finance staff and others, while the other showed data corresponding to each grain farmer, such as grain weight, moisture, brown rice recovery rate and head rice recovery rate. Niu Jingsheng said that in the past farmers always worried that their grain would be downgraded and underpriced. Now these display systems have improved the transparency of the grain purchasing process, allowing grain farmers to sell “clear grain” with confidence.

Selling grain with confidence also requires receiving payment promptly. Grain broker Qu Bo has worked in this line for more than 20 years, and the grain sale payments he handles each year reach the million-yuan level. Speaking of this year's grain selling, his feeling was that “the money is clear.”

“In the past, although grain sales were cash transactions, sometimes you had to wait four or five days to actually get the money. This year, with card settlement, if you deliver grain in the morning, the money arrives in the afternoon. Even if the truck is unloaded after dark, the money is on the card the next day.”

Wang Fuli, director of the First Client Division of the Heilongjiang Branch of the Agricultural Development Bank of China, introduced that this year the payment and settlement of credit funds for grain purchasing implemented the “three certificates” in one, meaning the identity information of the purchase code sheet, the grain seller's ID card and the personal bank card must be consistent; moreover, the Agricultural Development Bank extended settlement time from 8 hours to 12 hours to ensure that grain purchasing funds are paid accurately and promptly to grain sellers.

At present in Heilongjiang, the minimum purchase price plan for rice has been implemented for more than two months, and temporary storage corn purchasing is also reaching its peak. Data from the Heilongjiang Branch of the Agricultural Development Bank of China show that as of December 15, the bank had issued loans of 41.6 billion yuan, supporting the purchase of 26.1 billion jin of rice at the minimum purchase price, and issued 43.8 billion yuan in loans for temporary storage corn purchasing, supporting the purchase of 39.1 billion jin of corn.

To resolve the contradiction between the pressure faced by market-support policies and the protection of grain farmers' interests, the key is to find an “outlet” for grain

Data recently released by the National Bureau of Statistics show that this year China's total grain output was 1,242.87 billion jin, an increase of 28.82 billion jin over last year, or 2.4%. This was the twelfth consecutive year of bumper harvest since 2004. But at the same time, heavy inventory pressure, lower grain prices and higher production costs have become the “worries of a bumper harvest.”

Faced with this pressure, relying solely on open-ended purchasing and raising market-support purchase prices to protect farmers' enthusiasm for growing grain leaves less and less room and has weaker and weaker effects. The current grain purchase and storage policy system faces challenges and tests, and the question of how to further protect farmers' interests remains to be answered.

Ouyang Ping, president of the Heilongjiang Branch of the Agricultural Development Bank of China, believes that “there is an urgent need to solve the ‘outlet’ problem for grain. Only by opening up the ‘outlet’ and letting the grain that has been purchased be used can we ensure that there is no problem at the ‘inlet’ of the purchasing stage, and only then can farmers' interests be guaranteed.”

Solving the “outlet” problem requires steadily digesting existing inventories. The reporter learned that in recent years, Heilongjiang's policy-related grain inventory has continued to climb. In April this year, Heilongjiang issued a subsidy policy for competitive purchasing and processing of policy-related grain for grain processing enterprises with an annual processing capacity of more than 100,000 tons. The subsidy was 200 yuan per ton of corn competitively purchased for processing and 100 yuan per ton of rice, and later the subsidy amounts were increased to 400 yuan and 200 yuan respectively. The policy played a certain role in reducing inventory.

When analyzing the reasons for this year's bumper grain harvest, an increase in the planted area of high-yield crops such as corn was an important factor, but corn is precisely the variety with rather high inventory. Therefore, solving the “outlet” problem fundamentally still requires adjusting the planting structure. In August this year, the Ministry of Agriculture proposed the “Sickle Bend” region corn structure adjustment plan. Corn planting area in the “Sickle Bend” region, including the cold Northeast region, accounts for 1/3 of the national total, and in the future this will be a key area for China's corn structure adjustment. Through methods such as “grain-soybean rotation,” “grain-to-feed,” and “fallow treatment,” the traditional concept of “planting for grain and using straw as feed” will gradually change, and “planting for breeding” may become a new approach to solving the “outlet” problem. Reporter Zhu Jun