How to Solve the Difficulty of Selling Grain? China Takes Multiple Measures to Safeguard Food Security and Farmers' Interests
BEIJING, Nov. 11 (China News Service) -- Reporter Ding Dong. As China's autumn grain harvest this year has once again been bumper, a “twelfth consecutive increase” in grain output is now certain. Faced with a sharp increase in inventories and falling prices, how to prevent “cheap grain hurting farmers” has become a problem. The State Council executive meeting held on the 11th made clear that multiple measures must be taken simultaneously to stabilize grain production and increase income from growing grain, and to safeguard food security and farmers' interests through doing a good job in purchasing, digesting inventories, and reforming the grain price formation mechanism.
As for the current supply and demand situation in China's grain market, experts summarize it as the “three highs”: high grain output, high inventory levels, and high import volumes. Affected by supply exceeding demand, prices in the three major grain markets have fallen continuously, seriously affecting farmers' incomes. At the same time, domestic grain production costs are getting higher and higher, and the state's protective price purchasing policy faces considerable pressure, forming a “barrier lake” relative to the lower grain prices in the international market.
As for the reasons for the sharp increase in grain inventories, Li Guoxiang, a researcher at the Rural Development Institute of the Chinese Academy of Social Sciences, believes that in the past few years, domestic grain prices were on the high side, and society's high expectations for prices mobilized farmers' enthusiasm for developing agricultural production. In addition, the state encouraged the cultivation of new entities, and many large households and capital invested in developing agriculture one after another, leading to the current severe overcapacity. “Difficulty in selling grain” has become a common problem encountered by grain-growing farmers.
To safeguard the interests of grain-growing farmers, the State Council executive meeting made arrangements for doing a good job in purchasing autumn grain, requiring increased investment in the construction of storage facilities, acceleration of the progress of grain depots under construction and those being repaired and renovated, additional inter-provincial depot transfer plans as needed, increased transport of grain from the north to the south, prompt introduction of policies encouraging processing enterprises to enter the market to buy grain, strict investigation of “IOUs”, grade downgrading and price suppression, and prevention of “difficulty in selling grain”.
While increasing purchasing efforts, digesting existing inventories has become an effective way to raise the output value of grain and increase storage capacity. Experts point out that, benefiting from sufficient supply of grain raw materials, industries such as food and beverages, feed processing, and livestock breeding will expand their processing capacity, extend the industrial value chain, and promote an increase in the level of grain consumption.
The meeting proposed promoting the conversion of sloping land in the south back to forest, advancing fallow land and rotation of corn and soybeans, expanding the pilot scope of “grain-to-feed”, and promoting the adjustment of planting structure. In Li Guoxiang's view, under the current situation of relatively loose grain supply and demand, appropriately adjusting grain production capacity and allowing some cultivated land unsuitable for grain production to recuperate and be returned to forest will help maintain the ecological function of agriculture and maintain the elasticity of grain production capacity.
For a long time, because the temporary storage price and minimum purchase price of major agricultural products have been continuously raised, the deviation of grain prices from domestic market supply and demand and from international market prices has become increasingly obvious. Experts point out that reforming agricultural subsidies and agricultural product price policies is a fundamental measure to reflect market supply and demand and achieve reasonable grain prices. The principle of reform is that the formation of grain prices should be close to the market while also taking into account producers' returns.
The State Council executive meeting proposed reforming the grain price formation and storage mechanism, improving subsidy policies for corn and soybeans, and continuing to implement the minimum purchase price policy next year for ration varieties such as wheat and rice. Experts point out that the grain price formation mechanism will be reformed in the direction of “separating price and subsidy”, getting closer to the market, invigorating market circulation, and enhancing market vitality. At the same time, direct subsidies will be adopted for producers to better protect the enthusiasm of grain-growing farmers.