Only when the reserve grain is well managed can the people's rice bowl be held steady
"Those who store up grain hold the great destiny of the realm," and establishing the central grain reserve system is a grand strategy for ensuring our country's food security. In recent years, the central government has defined the new national food security strategy of "relying mainly on ourselves, basing ourselves on domestic production, ensuring production capacity, moderate imports, and technological support," emphasizing that "the rice bowl of the Chinese people must at all times be held firmly in our own hands." To safeguard food security, we need not only a red line for arable land and a red line for water resources, but also a red line for grain reserves.
Central reserves stabilize the market, aid farmers, and prepare for famine. Since 2004, while fully opening up the grain market, our country has gradually established a grain price regulation system mainly consisting of the market-supporting temporary reserve policy and import-export regulation, which has played an important role in promoting grain production and increasing farmers' income. Entrusted by the State Council, Sinograin serves as the implementing entity for the minimum purchase price and temporary reserve policies, and together with relevant parties organizes policy-oriented grain and oil purchases.
As the main force in grain macroeconomic regulation, Sinograin has played an important role in safeguarding national food security: First, stabilizing the market. From 2005 to 2014, Sinograin completed a cumulative total of 560 million tons of market-supporting and temporary reserve grain purchases, and 410 million tons of policy-oriented sales. International grain prices fluctuated by more than 40% several times a year, while the increase in domestic raw grain prices remained at a moderate level of around 10% annually, successfully responding to the impact of the international food crisis and promoting the stability of our country's overall macro situation. Second, aiding farmers. Sinograin has implemented the state's protective purchase and storage policy for 10 consecutive years, effectively preventing "cheap grain hurting farmers," guiding farmers' incomes to increase steadily, and protecting farmers' enthusiasm for growing grain. Third, preparing for famine. Through counter-cyclical operations of "selling high and buying low" and "using abundance to make up for scarcity," Sinograin has played an important role in responding to major natural disasters and emergencies.
At present, our country's grain work faces some new challenges, prominently manifested as four major constraints: the grain price "ceiling," the production cost "floor," the agricultural subsidy "yellow line," and the resource and environment "red light." Domestic grain supply is sufficient, but market demand is weak, prices remain inverted, market entities are not highly motivated to enter the market, the scale of policy-oriented grain purchase and storage has increased substantially, and the pressure of inventory custody is great. In response, Sinograin unswervingly takes "ensuring that the quantity of reserve grain and oil is real and the quality is good, and ensuring that they can be mobilized and used when the state urgently needs them" as its central task, and resolutely manages and manages well the grain that safeguards the people's rice bowl. At present, the central-authority grain managed by Sinograin has reached its highest level in history, and it is capable of ensuring supply and stabilizing prices when national regulation requires it.
Over the past few years, Sinograin's capacity for emergency supply guarantee and market stabilization has been tested many times in emergency disaster relief. For example, in responding to the earthquakes in Wenchuan, Zhouqu, Ya'an, and Ludian and to droughts in some areas, it quickly arranged the release of reserve grain and emergency processing, ensuring post-disaster grain supply and market stability. For another example, in recent years some directly affiliated depots, in executing state sell-off directives and calming the market, have experienced large-scale inventory "zeroing out." Zeroing out is the best test of grain quantity, quality, and corporate execution, and Sinograin has satisfactorily completed all state tasks.
Vertical management ensures grain quality. According to national policy provisions, Sinograin adopts an entrusted purchase and storage system, and entrusted purchase and storage depots are "jointly designated, jointly organized for acceptance inspection, jointly responsible for the quantity and quality of purchased grain and inventory management and sales out of storage, and jointly implementing the minimum purchase price and temporary reserve policies" by Sinograin branch companies, provincial grain administrative departments, and provincial branches of the Agricultural Development Bank of China. Sinograin, as Party A to the contract, signs entrusted purchase and storage contracts with local enterprises. At present, 87% of minimum purchase price and temporary reserve grain and oil is stored in a dispersed manner in more than 11,000 local and private enterprises.
The national minimum purchase price and temporary reserve policies clearly stipulate the basic qualification conditions for entrusted purchase and storage depots, including basic conditions such as grain purchasing qualifications, industrial and commercial registration, account opening with the Agricultural Development Bank of China, owned warehouse capacity, warehouse conditions, facility equipment, and personnel, as well as relatively high enterprise management level and credit rating, and no violations of regulations or discipline in purchase, storage, and sales out of storage within 3 years. Entrusted purchase and storage depots are jointly determined by Sinograin branch companies, provincial grain administrative departments, and provincial branches of the Agricultural Development Bank of China, and are announced to the public.
The reason the "minimum protective price" is only a fallback rather than an all-encompassing arrangement is that the "minimum protective price" is a minimum guarantee for grain-growing farmers, avoiding major fluctuations in grain production caused by cheap grain hurting farmers. It is premised on safeguarding the full play of the market mechanism, and is a purchase of "surplus grain" rather than a replacement for market purchases.
According to current policy provisions, the loans needed by entrusted purchase and storage depots for purchases are uniformly borrowed by Sinograin directly affiliated depots from the Agricultural Development Bank of China, and are promptly advanced to the entrusted purchase and storage depots according to purchase conditions and warehousing progress, ensuring the supply of purchase funds. Entrusted purchase and storage depots have the same subsidy standards as directly affiliated depots, and Sinograin disburses subsidies in full on a quarterly basis.
To ensure that the grain leaving storage reassures society, Sinograin first establishes a "vertical management line" for grain, forms a three-level "grain law enforcement" team, and directly organizes inventory inspections through the head office. It strictly defines the bottom-line indicators for the "two ensures" and seriously investigates and handles violations with a "zero tolerance" system. Second, it makes every effort to advance full coverage of quality and quantity inspection of incoming grain, full coverage of intelligent management, full coverage of green technology grain storage, and full coverage of modern warehousing infrastructure, making Sinograin a model for the national grain industry.
Year-round purchasing allows farmers to benefit. Sinograin's annual grain purchases involve multiple varieties, cover most areas of the country, and run throughout the year. Among them, the state stipulates specific implementation times for market-supporting and temporary reserve purchases: wheat market-supporting purchases run from late May to the end of September; early indica rice market-supporting purchases run from mid-July to the end of September; middle and late rice market-supporting purchases in 8 southern provinces run from mid-September to the end of January of the following year, and japonica rice purchases in the 3 northeastern provinces run from early October to the end of February of the following year; corn temporary reserve purchases run from November to the end of April of the following year. Within the implementation period, when the market price is higher than the minimum purchase price, market-supporting purchases stop according to national regulations. Sinograin's rotation purchases last longer than the market-supporting and temporary reserve purchase periods. It can be said that, whether in severe heat or bitter cold, Sinograin employees are on the front line of serving "agriculture, rural areas, and farmers."
To make it convenient for farmers to sell grain, Sinograin reasonably arranges purchase and storage depots, making it convenient for farmers to sell grain and ensuring that farmers do not encounter "difficulty in selling grain." At the same time, it strengthens supervision of policy implementation. It strictly implements the state's purchase and storage quality and price policies, safeguarding that farmers benefit. In addition, Sinograin implements "one-stop" purchasing services and extended services, providing grain brokers and large grain-growing households with personnel, technology, facilities, and equipment services related to grain custody, helping farmers sort out grain, meeting farmers' needs to sell rough grain and grain at the field edge, and helping farmers increase income to the greatest extent.