Rice minimum purchase price policy boosts rice prices, but farmers' income growth still needs policies in place
Editor's note: Starting July 28, Anhui, Jiangxi, Hunan and Hubei provinces successively launched the 2015 early indica rice minimum purchase price procurement, easing the brief pressure on market purchase prices in the early period, and the policy's price-support effect is gradually emerging. However, constrained by storage conditions, farming schedules and other factors, some farmers, large grain growers and cooperatives in Jiangxi were forced to sell their rice at low prices before the minimum purchase price policy was launched; in parts of Hunan, the launch of the minimum purchase price procurement was too slow, affecting farmers' grain sales. Experts suggest that, against the backdrop of policy-based reserve demand having become an important outlet for early indica rice, the state should improve and reform grain market regulation policies to promote stable grain production and income growth.
Jiangxi: Lack of storage conditions makes it hard for bumper early rice harvest to fetch a good price
New types of agricultural business entities hope the state will support them in building their own storage facilities
Starting July 28, Jiangxi launched the 2015 early indica rice minimum purchase price emergency plan. A reporter's interviews found that, similar to previous years, hampered by a lack of storage conditions and the impact of low-priced imported rice, many farmers busy with the “double rush” of harvesting early rice and transplanting late rice could not wait for the minimum purchase price procurement to start, and sold their rice to private purchasing enterprises and grain traders at prices below the minimum purchase price.
Total early rice output expected to reach the third-highest level in history
Since May, Jiangxi Province has frequently experienced large-scale severe precipitation, affecting early rice production. However, thanks to the full implementation of policies to strengthen agriculture, benefit farmers and enrich rural areas, the advancement of high-yield creation and green yield-increase research, and timely measures for disaster resistance and mitigation, stable and increased production was ensured, and a bumper early rice harvest for farmers is in sight.
Starting July 13, early rice harvesting began across Jiangxi Province. According to estimates by the provincial Department of Agriculture, the province's total early rice output will reach 16.202 billion jin, an increase of 445 million jin over the average of the past 5 years, and total output is expected to reach the third-highest level in history, accounting for one quarter of the national early rice output.
“Output did not decline; it even rose somewhat compared with last year.” Gao Caixia, a large grain grower in Shizihe Village, Lefeng Town, Poyang County, told reporters that this year she harvested more than 5 million jin of early rice, over 300,000 jin more than last year.
Lack of storage conditions forces farmers to sell grain at low prices
“Our company has already purchased more than 2,000 tonnes of sun-dried early rice, at the purchase price of 1.35 yuan/jin, the same as last year, and all the grain purchased was from several cooperatives and large grain growers that signed contracts with us at the beginning of the year.” He Manjiang, operations director of Poyang County Shengtai Grain Industrial Co., Ltd., told reporters.
However, Gao Caixia was unable to sell at that price. On July 8, Gao Caixia began harvesting early rice. As soon as the rice was harvested from the fields, grain trader Gao Junmin began weighing it, and cartload after cartload of wet rice went into his company's warehouse.
In Poyang County, a major grain-producing county in Jiangxi, many cooperatives and large grain growers were as helpless as Gao Caixia. This year's minimum purchase price procurement had not yet started, but most farmers had already finished harvesting most of their early rice and needed to sell it quickly to recover funds to prepare for rush-planting late rice.
“With such a large amount of rice harvested in a rush, it is no good to hoard it either. We have no warehouse of our own and no dryer, so it easily sprouts or molds and rots in our hands. Although it is a bit cheaper, selling one more jin early is one more jin.” Wu Zhengwei, chairman of Fengqing Rice Professional Cooperative in Qingni Village, Sanmiaoqian Township, told reporters that this year's early rice harvest was better than last year's, and the cooperative's rice volume reached more than 8 million kg, but income did not increase much. “Sun-dried rice goes for 1.24-1.26 yuan/jin, and unsunned rice about 9 mao per jin.” Wu Zhengwei said that although he knew the minimum purchase price was higher, “not selling is not an option.”
It is understood that if local private grain purchasing enterprises buy at the market price of 1.24-1.26 yuan/jin, smallholder farmers can basically still make money, while new types of business entities such as large growers, family farms and cooperatives earn very little or even lose money due to rising costs such as labor fees and land transfer fees.
If they could store it, they could earn a bit more
Many large grain growers said that if they had their own warehouses, they could dry or sun-dry the rice and store it, then sell it when a suitable market price appeared or when the state's minimum purchase price procurement began, so they could avoid losses or earn a bit more.
It is understood that when large growers buy dryers, the state subsidizes them at the standard of 4,500 yuan/tonne based on the tonnage of rice the dryer can process. However, there is currently no subsidy for building granaries, and building a grain warehouse with drying equipment requires an investment of about 2-3 million yuan.
“Building a grain warehouse with drying equipment requires too much investment; we simply cannot afford it.” Wu Zhengwei said that some large enterprises can build many warehouses, buy farmers' grain at market prices, store it after sun-drying or drying, or process it into products for sale, or wait until minimum purchase price procurement begins and sell it to state grain depots, earning the price difference.
Jiangxi's emergency plan for the minimum purchase price of early rice stipulates that it is forbidden to suppress grade or price, or to raise grade or price in purchasing, and it is forbidden to issue IOUs to farmers or divert purchase funds for other uses. “We also hope the state will introduce relevant policies as early as possible to help cooperatives, family farms and large growers build grain warehouses with drying equipment, so as to solve our problem of drying and storing grain, so that a good grain harvest does not mean selling grain is left to fate.” Wu Zhengwei said, adding that he also hopes the state can start minimum purchase price procurement earlier, preferably in early July, in sync with the time farmers sell early rice, so that the time gap does not prevent grain farmers from enjoying more of the benefits of the good policy.
Hunan: Delayed minimum purchase price procurement in some areas leaves large grain growers struggling to sell grain
Grain collection and storage departments will adopt appointment-based door-to-door purchasing for large growers
“This year we harvested early rice early, bringing in 600,000 jin of grain, but after trying every possible means, more than 100,000 jin is still unsold!” On August 7, Deng Xingping, a large grain grower in Longhui County, Shaoyang City, Hunan Province, told reporters about his “joy and worry.” The poor sales and low prices that worried Deng Xingping also troubled many large grain growers.
On July 28, Hunan launched minimum purchase price procurement for early rice across the province. The reporter learned from Sinograin Hunan Branch that most areas around Dongting Lake launched minimum purchase price procurement on July 28, while in mountainous areas, especially some counties (cities) in Shaoyang and other places, because cleaning and quality inspection equipment at collection and storage depots were not in place for a long time, some places delayed the launch of minimum purchase price procurement by more than 10 days.
Both early rice per-unit yield and total output increased, and large grain growers became the main force in “expanding area”
Against the backdrop of early rice production facing reduced output in 2013 and 2014, grain farmers, who have always preferred growing indica rice, finally welcomed a bumper early rice harvest this year. Zhou Zhikui, director of the Grain and Oil Division of the Hunan Provincial Agricultural Commission, told reporters: “This year Hunan's average early rice per-unit yield increased by 5 kg, and total output rose by 100 million jin. A bumper early rice harvest is now certain.”
In Hunan, generally speaking, bumper harvests are easy in lake areas, while increasing grain output is difficult in mountainous areas. In Longhui County, a typical mountainous county, Wu Houbin, director of the county agriculture bureau, said that this year the early rice planting area increased by nearly 10,000 mu over the previous year, all indica rice, and the county's average early rice yield per mu increased by about 20 kg compared with previous years, with a total increase of 1.2 million kg.
Why was grain production stabilized and increased in 2015? Chen Lixiang, deputy director of the Longhui County Agriculture Bureau, believes that, in addition to special subsidies for unified pest and disease control promoting reduced grain losses and increased output, soil testing and formulated fertilization in double-cropping rice areas, and straw return to the field, the “grain-growing project system” played an indispensable role in encouraging farmers to expand planting area. According to reports, Longhui County tilted relevant reward and subsidy projects toward farmers growing more grain. This year, there were 12 large growers and cooperatives cultivating more than 1,000 mu, and the area added by large grain growers alone was nearly 500 mu.
The reporter learned that large grain growers were the main force in Hunan's early rice “area expansion.” This year, the province's new types of business entities such as large grain growers and cooperatives reached more than 140,000, an increase of 10,000. In addition, agricultural departments at all levels actively established demonstration plots for 10,000-mu super rice, high-yield creation, and double-season mechanical transplanting to drive large-scale high yields in early rice; adopted advanced technologies such as green prevention and control of pests and diseases, and actively promoted specialized unified pest and disease control for rice with full-process contracting as the main form, escorting high and stable grain yields.