Solving the problem of difficulty in selling grain, ensuring farmers can sell grain without worry
China's grain production has enjoyed consecutive years of bumper harvests, but consumption growth has slowed markedly, and domestic grain prices face considerable downward pressure overall. Thanks to measures such as the state's timely launch of purchasing and storage, which actively guided and stabilized market expectations, the domestic grain market is now generally stabilizing. In order to raise returns from grain farming, protect farmers' enthusiasm for cultivating land, the state has proposed advancing fallow land and corn-soybean rotation, and promoting adjustment of the planting structure. This edition continues to publish our reporter's survey reports on major grain-producing areas.
On November 19, the National Development and Reform Commission, together with the Ministry of Finance, the Ministry of Agriculture, the Agricultural Development Bank of China and other departments, jointly held a media briefing to respond to public concerns on topics such as the current autumn grain purchasing and storage, agricultural production and farmers' income growth.
It is reported that at present domestic grain supply and demand are generally loose, international grain prices are running at a low level, and the price gap between domestic and international grain remains relatively large. According to monitoring, in mid-November this year the domestic-international price gaps for wheat, corn and rice were 700 yuan, 630 yuan and 760 yuan per ton respectively. At the same time, China's grain production has enjoyed consecutive years of bumper harvests, but consumption growth has slowed markedly; although total supply and demand are basically balanced, the contradiction in variety structure is prominent, with rice supply exceeding demand, corn experiencing a phase of oversupply, and coupled with a sharp increase in imports of corn substitutes such as sorghum and barley, domestic grain prices face considerable downward pressure overall.
Zhou Guanhua, Director of the Regulation Department of the National Grain Administration, said that thanks to measures such as the state's timely launch of purchasing and storage, which actively guided and stabilized market expectations, the domestic grain market and prices are now generally stabilizing.
According to reports, this year the central government allocated about 15 billion yuan to support the construction of grain storage facilities and the repair and renovation of “dangerous warehouses and old granaries”, clarified fiscal subsidy policies for cross-provincial warehouse transfers and the construction of simple storage facilities, effectively easing the warehouse capacity pressure in Northeast China. At the same time, it promptly allocated subsidies for interest and expenses on central reserve grain and oil, minimum purchase price and temporary reserve grain and oil, and supported Sinograin and others in fully opening purchasing outlets, so that autumn grain is “purchased to the fullest extent possible”.
“While supporting autumn grain purchasing, we have continuously increased investment in major grain-producing areas.” said Sun Zhi, Deputy Director of the Economic Department of the Ministry of Finance. This year the central government arranged 37.2 billion yuan in reward funds for major grain (and oil) producing counties, an increase of 2.1 billion yuan over the previous year. At present, the central government subsidies for the 2016 grain risk fund have all been issued to local governments in advance, to support the accelerated development of new-type business entities such as large-scale growers, promote adjustment of the planting structure, and improve the efficiency of agricultural development.
In promoting reform of the price formation mechanism for agricultural products, the prices of soybeans and cotton have gradually come to be formed mainly by the market, and farmers' interests have been relatively well protected. It is reported that next year China will continue to implement the target price subsidy policy for soybeans and cotton, and continue to support implementation of the minimum purchase price policy for wheat and rice.
As the entity entrusted by the state to implement the temporary corn purchasing and storage policy, Sinograin has since November 1 launched the temporary purchasing and storage of 2015-crop corn in the four provinces and regions of Northeast China. Earlier, starting in late September, Sinograin launched in advance the purchasing of middle and late rice in 9 major rice-producing provinces and regions.
“In the past, when farmers sold grain at entrusted outlets, settlement was usually handled at the entrusted outlet, and there could be a risk of funds being misappropriated or diverted by the entrusted warehouse. This year Sinograin introduced the ‘one-card’ system; when farmers sell grain at entrusted outlets, funds are settled directly by Sinograin through online banking, and the grain payment is transferred directly to the seller's account, completely solving the problem of ‘issuing IOUs’.” said Wang Ming of the Policy Research Office of Sinograin.
To ensure the timely supply of funds for autumn grain purchasing, the Agricultural Development Bank of China began deploying related work at the end of September and prepared 330 billion yuan in credit funds to ensure the funding needs of autumn grain purchasing. Not only that, the Agricultural Development Bank also issued notices in advance to all borrowing enterprises, simplified procedures for loan processing, disbursement and payment, and ensured that funds arrive before purchasing begins at purchasing and storage outlets, achieving “money waiting for grain”.
To ensure that corn purchasing and storage is “purchased to the fullest extent possible”, relevant departments adjusted the implementation period of the purchasing and storage policy to November 1 this year through April 30 next year, more than 20 days earlier than before. Zhou Guanhua said this move helps farmers sell grain promptly after harvest, and also helps grain purchasing and storage enterprises make full use of drying capacity and reduce losses from moldy corn.
Sun Zhi revealed that the central government has already issued in advance 201.1 billion yuan for 2016 for agricultural support and protection subsidies, agricultural machinery purchase subsidies, agricultural technology extension and service subsidies, modern agricultural production development, farmland water conservancy facility construction subsidies and agricultural disaster prevention and yield increase and other related funds, so as to effectively support farmers in carrying out winter and spring agricultural production, guide the development of various forms of appropriately scaled operations, and enhance the level of agricultural mechanization and the supporting capacity of agricultural science and technology.