Food target price reform should be met with the "five transformations"
On September 17, the National Development and Reform Commission, the State Administration of Grain, the Ministry of Finance, and the Agricultural Development Bank of China issued the "Notice on Issues Concerning the State Temporary Storage and Purchase of Corn in Northeast China in 2015," "clarifying the corn temporary storage and purchase policy that had been widely speculated about by the outside world. The Notice pointed out: with the approval of the State Council, in 2015 the state will continue to implement the corn temporary storage and purchase policy in the three northeastern provinces and the Inner Mongolia Autonomous Region"; "the listed purchase price (national standard third-class quality standard) is 1 yuan/jin, and the price difference between adjacent grades shall be controlled at 0.02 yuan per jin." This may be the last year for the implementation of our country's corn temporary storage and purchase policy. Starting next year, corn will enter the target price reform sector just like cotton and soybeans.
The minimum purchase price and temporary storage and purchase policies for grain that began in 2004, although they played a positive role in protecting farmers' enthusiasm for growing grain and promoting farmers' income growth. However, as a transitional policy, their historical role seems to have been exhausted. Our country currently faces grain "high purchase volume, high inventory volume, high import volume," and a very important aspect of this is that because policy-oriented grain dominates the market, the purchase price is not only much higher than the market price, but also far higher than the international market price. While the state finances bear a heavy burden, it is also increasingly difficult for grain-growing farmers to increase their incomes.
Starting in 2014, our country included Xinjiang cotton and Northeast and Inner Mongolia soybeans in the first batch of pilot projects for target price reform. This is a concrete manifestation of the market playing a decisive role in the market prices of agricultural products.
The target price policy is an agricultural support policy that, on the basis of market-formed agricultural product prices, protects producers' interests through price difference subsidies. After implementing the target price policy for cotton and soybeans, the temporary storage and purchase policy is canceled, and producers sell cotton and soybeans at market prices. When the market price is lower than the target price, the state grants subsidies to producers in the pilot areas based on the price difference between the target price and the market price and factors such as planting area, output, or sales volume; when the market price is higher than the target price, the state does not issue subsidies.
Judging from the situation in developed countries around the world and our country's pilot projects, promoting target prices for agricultural products is the general trend. To respond to target price reform, grain production should achieve the "five transformations."
Transparent policies
After implementing grain target prices, policies supporting grain production must also change accordingly. To mobilize and protect farmers' enthusiasm for growing grain, policies supporting grain production must be made transparent.
The most basic condition for grain production is cultivated land resources. The condition of cultivated land resources directly determines the level of grain output and quality, as well as sustainable development.
⟦NL> When formulating policies to support grain production, protecting the fertility of cultivated land must be made a top priority. Relevant departments have preliminarily made clear that the three subsidies, namely direct grain subsidies, improved seed subsidies, and comprehensive agricultural input subsidies, will be adjusted and used as agricultural support and protection subsidies. 80% of the existing funds for comprehensive agricultural input subsidies, plus direct subsidies to grain-growing farmers and crop improved seed subsidy funds, will be used to protect cultivated land fertility.
Appropriately scaled intensive and large-scale operations are the inevitable path to improving grain productivity, increasing per-unit-area yields, and developing modern agriculture. Agricultural support and protection subsidies must make breakthroughs in supporting large-scale grain production operations. The policy preliminarily made clear by relevant departments will use 20% of the existing funds for comprehensive agricultural input subsidies, plus pilot funds for subsidies to large grain-growing households and incremental funds for the agricultural "three subsidies," to support appropriately scaled grain operations in accordance with the requirements for nationally unified adjustment and improvement of policies. The focus will be tilted toward new types of business entities such as large grain-growing households, family farms, farmer cooperatives, and agricultural social service organizations, reflecting the principle that "whoever grows more grain will be supported first."
When implementing the agricultural support and protection subsidy policy, it is necessary to thoroughly change the drawback of applying a "preferential system" policy to grain production as a "universal system," and effectively improve the precision of subsidies. The target of cultivated land fertility protection subsidies is all farming farmers who have contracted rights to cultivated land, and farmers receiving subsidies must ensure that cultivated land is not left abandoned and that soil fertility does not decline. Subsidy funds must be linked to cultivated land area or sown area, and the boundaries of subsidy policy must be strictly controlled. No further subsidies shall be given to cultivated land already used as livestock and poultry farms, forest land, contiguous grain fields converted to facility agriculture land, cultivated land requisitioned (occupied) for non-agricultural purposes and other cultivated land whose use has changed, as well as long-term abandoned land, and land whose "supplemented" area and quality in the balance of occupation and compensation do not meet cultivation conditions. At the same time, it is necessary to mobilize farmers' awareness of strengthening the protection of agricultural ecological resources, encourage them to actively protect soil fertility, and encourage straw return to the field rather than open-air burning. Subsidy funds used for cultivated land fertility protection shall be directly paid to households in cash. Methods such as openness and public announcement shall be adopted to accept supervision from all sectors of society. Acts that recklessly violate subsidy policies shall be severely investigated and dealt with.
High-quality varieties
Grain that has lost the protection of the minimum purchase price and temporary storage purchase price policies must work on adapting to consumer demand if it is to flow unimpeded in the market.
As living standards increasingly improve, people's selectivity in grain consumption is becoming stronger and stronger. High-quality grain products undoubtedly become consumers' first choice.
Today our country's wheat inventory is at a high level, but high-quality wheat is in short supply. High-quality wheat from Canada, the United States, and other countries has become "hot-selling goods" in the Chinese market. According to the latest import data released by the General Administration of Customs of China, in September 2015 China imported 210,000 tons of wheat, and in August imported 340,000 tons, a month-on-month decrease of 38.24% and a year-on-year increase of 57.19%. From January to September, a total of 2,249,300 tons of wheat were imported; while large amounts of policy-oriented rice cannot leave warehouses, domestic high-quality rice, national first-class rice such as Northeast high-quality japonica rice, southern Huanghuazhan, Simiao rice, and so on, have no difficulty finding a market; ordinary corn has low yield, and this year in Zhanghuai Village, Taihe County, Anhui Province, the high-yield creation demonstration field of the high-quality corn variety Luyu 9105, planted by Xu Congxiang, which is disease-resistant, insect-resistant, and has high yield-increasing potential, reached a yield of 2,099.8 jin per mu, setting the highest single-yield record for summer corn in Anhui Province.
"One need not fear that goods will not be recognized, only that goods will be compared with goods." Unsold grain products are mostly products of poor quality that cannot meet consumer demand. As long as they adapt to consumer demand, there is no need to worry about finding a market.
The cultivation of high-quality grain varieties not only requires a fairly long time, but also requires the support of high technology. In order to avoid the problems of insufficient strength of individual households and weak dispersed efforts, relevant state departments and agricultural departments at all levels must provide support in breeding policies, attach great importance to the cultivation, selection, and promotion of high-quality grain varieties, and benefit more farming households.
While developing high-quality grain production, attention must also be focused on the production of organic, green, and pollution-free grain products, so as to meet the needs of consumers at different consumption levels on the one hand, and on the other hand also reduce the use of chemical fertilizers and pesticides, lower pollution, improve the ecological environment, and raise the level of people's health.