Why does the agricultural product target price system urgently need to be established?
Related personnel believe that, facing the double squeeze of a cost “floor” and a price “ceiling”, and the double constraints of resource “red lights” and subsidy “yellow lines”, the construction of the national grain reserve system should, on the premise of safeguarding national food security and protecting farmers' enthusiasm for growing grain, take multiple measures, address both symptoms and root causes, make good use of the two means of market regulation and government control, and promote the formation of a virtuous interactive pattern in which grain is grown well, processed well and sold well.
First, refine the purchase and storage policy, price by quality, and gradually form a regulatory system that combines market prices with direct subsidies.
Lu Xiaodong, general manager of the Heilongjiang branch of Sinograin, believes that the temporary storage corn purchase price can be lowered somewhat, gradually returning to a model based mainly on market regulation with government control as a supplement, so as to ease the high-cost problem of enterprises at the source. At the same time, direct subsidies to farmers for growing corn can be increased through the target price approach, ensuring that farmers' grain-growing returns do not decline. Ouyang Ping, president of the Heilongjiang branch of the Agricultural Development Bank of China, believes that the quality requirements for temporary storage corn purchases should be strengthened to form a stricter quality-based pricing system, ensure that good grain sells for a good price, and force farmers to cultivate high-quality grain.
Second, use policy regulation to drive the adjustment of the agricultural planting structure. Some experts believe that restoring the minimum purchase price policy for wheat in Heilongjiang Province would guide farmers to adjust the structure, increase ration grain planting, and reduce corn planting area.
Heilongjiang's current grain inventory is “brimming over”, most prominently reflected in the large corn planting area, high output and large reserves. The province's current corn planting area has reached 110 million mu, with an annual output of about 100 billion jin and annual purchase and storage of about 80 billion jin, and policy-based inventory is relatively high.
Hu Dongsheng, director of the Heilongjiang Provincial Grain Bureau, said that if a suitable price can be guaranteed, increasing wheat yields per unit area through irrigation could reduce the corn planted across regions in the north, realize wheat-soybean rotation and structural adjustment, and promote sustainable agricultural development. At present, Heilongjiang Province purchases 3 to 4 billion jin of wheat from other provinces every year. If the province expands planting, it could meet this ration demand locally and reduce the corn planting area by more than 10 million mu.
Second, explore a target reserve and target price system, and gradually abolish the temporary storage policy. Ma Xiaohe, vice president of the Academy of Macroeconomic Research of the National Development and Reform Commission, introduced that China's current grain reserves as a share of consumption have already exceeded 70 percent. If the ratio of grain reserves to total consumption were reduced to 30 percent, public fiscal expenditure and resource waste would be greatly reduced.
“This target reserve system must also be combined with a target price mechanism.” Ma Xiaohe said that when setting the price for purchasing and storing grain in China, international experience can be referenced, namely that regardless of whether market prices rise or fall, the government purchase price can always remain higher than the market price by a constant proportion. South Korea once adopted such a policy: the government purchased 10 percent of grain from farmers each year, and regardless of whether the market price was high or low, the government purchase price had to be about 35 percent higher than the market price. We can also purchase according to this method, so that it will not interfere with market price formation.
Third, comprehensively apply other measures such as cracking down on smuggling and supporting processing to improve China's grain purchase, storage, processing and management capabilities. We must severely crack down on smuggled rice entering the country from the south, ease the impact of smuggled rice on China's rice processing industry, and avoid the chain wave of bankruptcy among rice processing enterprises caused by years of “strong rice, weak milled rice”. At the same time, appropriately control imports of corn substitutes and substitutes for corn deep-processing products, and promote the digestion of domestic corn inventory.
Li Zhuyuan, director of the Industry Guidance Division of the Heilongjiang Provincial Grain Bureau, introduced that Heilongjiang ranks first nationwide in grain output, but currently has little industrial grain use, especially severely insufficient corn deep-processing capacity, and the problems of strong planting but weak sales, large volume but short chains, and good quality but poor prices are prominent. We should continue to encourage social capital to build warehouses and factories in production areas and participate in the reform of local state-owned grain enterprises. At the same time, deeply tap the potential of grain conversion industries such as animal husbandry and baijiu, and expand the production manufacturers and use areas of corn fuel ethanol.