Is the simultaneous increase in the three grain quantities too much or too little, and how should it be tackled?
This year China's summer grain achieved a “twelfth consecutive bumper harvest”. Last year, China's grain production remained stable above 1.2 trillion jin for two consecutive years. At the same time, grain imports exceeded the 100 million tonne mark for the first time. In the first 7 months of this year, 72.568 million tonnes of grain were imported, up 22.4% year on year. This has left many people puzzled: why is it that grain output rises year after year, yet import volumes keep climbing?
China's grain now shows the phenomenon of a “simultaneous increase in the three quantities” of production, stock and imports. Why has this situation arisen? Is there too much grain or too little? How can the adverse effects of the problem be resolved? A reporter interviewed the relevant person in charge at the Ministry of Agriculture and related experts on this.
Variety adjustment and the huge price gap at home and abroad have led to increased imports
The relevant person in charge at the Ministry of Agriculture said that variety adjustment and lower international grain prices are the main factors behind the climbing import volume. In recent years, the bulk of China's imports has been soybeans, which are in short supply domestically, mainly to meet the growing demand for edible vegetable oil and protein feed. Last year 71.40 million tonnes of soybeans were imported, up 12.7% year on year. At the same time China also imported some cereal varieties, with net imports of more than 18.70 million tonnes, up 38% year on year, mainly barley and sorghum, used for brewing and feed.
“The increase in imports does not mean our grain is insufficient to eat; it is mainly caused by the huge price gap between domestic and international grain.” Ye Xingqing, director of the Rural Economy Research Department of the Development Research Center of the State Council, explained that since 2004 China has implemented the minimum purchase price and temporary storage policy, thereby raising farmers' enthusiasm for growing grain and stabilizing grain production. As the purchase price gradually rose, domestic grain market prices rose along with it. In recent years, however, international market grain prices have turned downward, and the inversion of domestic and international agricultural product prices has become increasingly obvious. Since 2012, domestic grain prices have gradually risen above the international market.
At present, domestic prices of bulk agricultural products are comprehensively higher than the international market. By the first half of this year, the prices of staple grains such as rice, wheat and corn all exceeded the international market by 50%, and the duty-paid import price of bulk agricultural products such as grain, cotton, oil and sugar was generally 1000 yuan per tonne lower than domestic prices, leading to continuously increasing imports of grain, cotton, oil and sugar, and giving rise to the phenomena of “importing while stockpiling” and “foreign goods entering the market while domestic goods enter the warehouses”.
The “simultaneous increase in the three quantities” reflects that China's agricultural competitiveness is not strong
“The ‘simultaneous increase in the three quantities’ phenomenon is a new situation emerging under the new normal. There is inevitability to its emergence; some domestically scarce varieties do need to be imported, but the fundamental reason is still that international competition is becoming increasingly fierce and China's agricultural competitiveness is not strong.” The relevant person in charge at the Ministry of Agriculture said that China's tariff level on agricultural products is only 1/4 of the world average, making it one of the countries with the highest degree of agricultural openness in the world. As opening up continues to deepen, especially with the construction and development of China's free trade areas with ASEAN, New Zealand, Australia and others, the domestic market and the international market will further integrate, and the degree of agricultural openness will rise further.
“In the future we will face not only competition from developed countries with abundant agricultural resources and a very high level of agricultural modernization, but also competition from developing countries with obvious labour advantages. Yet the production cost of domestic agricultural products is still on an upward track, with land rent, labour costs and machinery operation fees continuously rising, and agricultural products such as grain lacking a price advantage.” The person in charge said.
Li Guoxiang, a researcher at the Institute of Rural Development of the Chinese Academy of Social Sciences, said that falling international agricultural product prices and rising import volumes increase the pressure on domestic grain stocks. This forms a huge shock to China's market and will directly lead to narrower room for domestic price increases, with domestic agricultural production further facing the double squeeze of a price “ceiling” and a cost “floor”, and declining comparative returns. If allowed to develop unchecked, farmers' enthusiasm for growing grain and national food security would be deeply affected, and it would have an adverse impact on the healthy development of China's agricultural industry, farmers' employment and the growth of farmers' incomes.
The fundamental way lies in accelerating the transformation of China's agricultural development mode
Is there a way to tackle the “simultaneous increase in the three quantities”?
“The fundamental way is to unswervingly accelerate the transformation of the agricultural development mode.” The relevant person in charge at the Ministry of Agriculture said that the key is to achieve the “three transformations” in direction, namely to push agricultural development from being mainly about quantity growth to placing equal emphasis on quantity, quality and efficiency; from relying mainly on input of material factors to relying on scientific and technological innovation and raising the quality of workers; and from extensive management dependent on resource consumption to sustainable development. The focus should be on the five aspects of “expanding scale, adjusting structure, strengthening industry, sustainability and raising quality”.
Expanding scale means cultivating new types of entities, improving the service system and accelerating the development of appropriately scaled operations. We should actively guide and support the growth and expansion of new types of operating entities such as large growers, family farms, farmer cooperatives and leading enterprises, strive to improve the agricultural socialized service system, and raise the scale efficiency of production.
Adjusting structure means orienting toward market demand, giving play to resource advantages and accelerating the adjustment of the agricultural structure. We should scientifically examine the potential of domestic agricultural resources and reasonably arrange the order of priority for agricultural product production. We must resolutely protect arable land, ensure the level of self-sufficiency in staple rations, and achieve “storing grain in the land” and “storing grain in technology”, so as to ensure food security. Thus we should promote coordinated planning of grain, cash crops and feed, the integration of planting, breeding and processing, and the combination of agriculture, forestry, animal husbandry and fishery, so as to achieve coordinated development.
Strengthening industry means improving the industrial chain, ensuring quality and safety and accelerating the improvement of comprehensive agricultural returns. With a view to promoting the integrated development of the primary, secondary and tertiary industries, we should vigorously advance industrialized agricultural operation, accelerate the development of deep processing of agricultural products, extend the industrial chain and increase the returns of the entire agricultural industrial chain.
Sustainability means strengthening resource protection, enhancing ecological development and accelerating the promotion of sustainable agricultural development. We should increase protection of resources such as arable land and water; gradually reduce the use of chemical fertilizers and pesticides; develop ecological agriculture, green agriculture and circular agriculture; and promote the resource utilization of agricultural waste such as straw, livestock and poultry manure and plastic film, so as to turn waste into treasure and achieve comprehensive utilization.
Raising quality means advancing scientific and technological innovation and infrastructure construction, cultivating professional farmers and accelerating the realization of innovation-driven agricultural development. We should vigorously advance agricultural scientific and technological innovation and promote the transformation and application of agricultural scientific and technological achievements. We should strengthen water conservancy construction, raise the effective irrigation rate of farmland, accelerate the transformation of low- and medium-yield farmland, and continuously improve comprehensive grain and agricultural production capacity, among other things.
Li Guoxiang suggested that, in response to the “simultaneous increase in the three quantities”, agricultural support and protection policies should be adjusted so that the market plays a greater role, minimizing the distortion of the market by price support policies and reversing the price inversion phenomenon. At the same time, smuggling of agricultural products such as grain should be severely cracked down on, so as to better maintain market stability and protect farmers' interests.