Grain Bank Solves Farmers' Grain Storage Problem

Zhengzhou "Lianwanjia" Agricultural and Sideline Products Professional Cooperative is located in Langchenggang Town, Zhongmu County, Henan Province. After the cooperative was established in 2012, it contracted 2,600 mu of land in one go, planting wheat and corn on the south bank of the Yellow River, and subsequently contracted contiguous land in two more rounds. By 2014, the grain planting scale expanded to 23,000 mu. The cooperative followed Japan's high-efficiency agricultural management experience, planting all grain according to organic standards, implementing standardized production, and adopting a marketing model of production based on sales and contract planting. In Zhongmu County, such a large grain planting scale is rarely seen, so it has also gained some fame. Nearby "Jinlongyu," "Fangxin Rice Industry," and Kaifeng Shuangyu Flour Mill all became customers of the cooperative.

With so much grain planted, storage became a problem. Cooperative chairman Gao Fengmin did the math: grain prices are low right after harvest, and storing it for a few months can yield several fen more per jin, or even one mao. Large grain growers struggle with having too much grain and nowhere to store it, while small farmers find the hassle not worth it. As soon as the grain is harvested, it is bought and sold right at the field. If there were a place to store grain, storing it before selling could fetch a considerably better price, and cooperative members could also get more rebates. In 2014, after the cooperative's 19 shareholders reached a consensus, they approached the local Zhongmu County Grain Management Office, hoping the office would provide storage space. Unexpectedly, the two sides hit it off immediately, and that summer they signed a grain storage cooperation alliance agreement. According to the agreement, the Grain Management Office would store grain for the cooperative, with grain management strictly following national standards. The storage fee was 1.5 fen per jin of grain per year, and the Grain Management Office would also provide the cooperative with an office, a testing laboratory, and a meeting room. Chen Yubin, director of the Grain Management Office, said: "What Manager Gao needs is a place to store grain, and what the grain depot needs is grain. We hit it off immediately." The Zhongmu County Grain Management Office is a provincial-level grain reserve depot in Henan, with a grain storage capacity of 60,000 tons. Apart from the 20,000 tons of capacity reserved year-round for grain reserves that cannot be touched, the rest can all receive and store grain.

With a place to store grain, the timing of sales becomes much more flexible. Although the storage cooperation was agreed upon, the cooperative had even bigger plans. According to Gao Fengmin's vision, the cooperative's grain would be collected, stored at the grain depot, and a "Grain Bank" would be established. Depositing wheat would not earn interest; moisture and impurities would be deducted according to national standards, and management would be standardized. The stored grain could also be used to cooperate with flour mills for organic contract processing, with the processed products returning to the local area. In the future, grain exchange could be implemented, allowing both sales and exchange. After cooperative members or grain-depositing farmers store their grain, they can withdraw money or grain, or even dried noodles, without time restrictions. One grain point per administrative village would make it convenient for grain-depositing farmers, "and also let our members eat organic grain we grew ourselves!" Gao Fengmin said.

Zhongmu County is a suburban county of Zhengzhou. In recent years, urbanization has developed rapidly, and thousands of households have gradually moved into new high-rise residences. Local grain is all planted on a large scale and harvested with machinery. Individual households do not even have a place to put their production tools, let alone store grain at home. When management cannot keep up, grain becomes moldy or is eaten by rats, and losses are inevitable. The difficulties farmers face in storing and using grain have thus become prominent. "The Grain Bank has several advantages," Chen Yubin explained. "The grain station has also done entrusted storage and processing before. If the Grain Bank is truly established, farmers will benefit, and both sides will gain." The grain depot has mechanical equipment and testing equipment, and grain can compete in the market. On one hand, it stabilizes market prices; on the other hand, it protects farmers' interests. Ordinary people all sell their grain right after harvest. If the price is not right, grades and prices are pressed down during storage, which shows the market is still not well regulated. If grain were managed uniformly here, farming households could withdraw grain or flour, or exchange for dried noodles -- benefiting farmers and convenient. This way, the grain depot would be put to use, and local resources would be utilized effectively.

"If the flour processing plant offered a higher price, who would still deliver grain to your depot?" When asked this, Director Chen started counting on his fingers again. There are no large-scale grain processing enterprises around Zhongmu County; the large processing enterprises are all in Zhengzhou and Kaifeng. Processing plants use large amounts of grain and offer prices two or three fen higher, but once transport costs are factored in, it is not worth it. From Zhongmu to Kaifeng is 30 km, and to Jinyuan Flour Processing Plant is over 40 km. When delivering grain to processing enterprises, farmers or brokers can only make one or two trips a day, and after arriving they may queue all day without necessarily getting their turn. When grain is delivered to the grain depot, three trips a day are possible. With a price difference of just 2-3 fen, ordinary people prefer the convenience. Brokers delivering grain can earn six or seven hundred yuan a day making three trips to the depot, which is profitable, and they can even save on a meal at noon. "My purchase price here is a bit lower than the processing plant's, but the price is still reasonable. I'm not worried that the 'Grain Bank' won't have grain."

As for the name "Grain Bank," Gao Fengmin has her own considerations. After storing grain, if farmers want money, cash must be paid out, so it should be called a "bank." But the general trend of grain storage management is sound, and it could also be called a Direct Grain Management Station -- that is, a "Grain Bank" under the cooperative's name. "The name doesn't matter; this is just a model of agricultural cooperation," Gao Fengmin said confidently.