20 Million Yuan in Grain Payments Misappropriated from Sinograin: Who Smashed the Golden Signboard?

Recently, news that “Sinograin issued IOUs and owed 20 million yuan in grain payments to over a thousand farming households in Dingyuan County, Anhui” has drawn widespread attention. Beyond the public shock, a series of doubts about Sinograin, the “national granary,” have followed: why did the grain payment funds, which are specially appropriated, end up in arrears? Where did the special funds, which should have been paid in cash at the same time the grain was collected, go?

In the media reports that have peeled back the layers over the past few days, the truth seems to have surfaced: Sinograin has already paid the money in full, but the funds were not paid directly to the grain sellers themselves; instead, they went into the accounts of the local enterprise Minsheng Rice Industry and brokers.

In fact, these “intermediaries” not only took on the duty of paying the grain payments to the farming households, but also “did the work for” Sinograin in the collection process that Sinograin itself should have handled. And the problem arose precisely in that “doing the work for” others——Minsheng Rice Industry used the special grain funds to repay loans and for cash flow, and the funds that should have been paid to the grain sellers mysteriously “disappeared” because of the enterprise's own cash flow failure.

Although after the above “industry hidden rules” were exposed, Sinograin responded in a timely manner that the incident was caused “because Minsheng Rice Industry failed to pay in time,” and that it itself did not have the phenomenon of “issuing IOUs when collecting grain,” a review of the entire process shows that Sinograin at least has several controversial points in its operations.

First, Sinograin's acquisition funds are guaranteed by the Agricultural Development Bank of China, with dedicated funds for dedicated use. According to Sinograin's own publicity, the grain collection process should be “self-collection, self-storage, self-management.” But the reality is that Sinograin has long relied on third parties in various places to carry out grain collection and settlement business with grain sellers for convenience. According to a rice mill owner in Dingyuan, Anhui, “Sinograin generally only deals with rice mills or large grain brokers.” According to China's 1998 “Regulations on Grain Purchasing” (hereinafter referred to as the Regulations), “state-owned grain purchasing and storage enterprises purchasing grain shall pay the grain purchase payment to the grain seller himself immediately, and shall not delay payment.” In the grain purchasing process, Sinograin clearly failed to achieve the requirements of “collect and pay immediately” and “doing it personally.”

Second, after entrusting rice mills and brokers to carry out the grain collection process, Sinograin seemed overly “reassured,” leaving loopholes in supervision that could be triggered at any time and directly affecting the interests of farming households. Article 7 of the Regulations provides that the grain purchasing funds of state-owned grain purchasing and storage enterprises shall be deposited in dedicated accounts, used for dedicated purposes, shall not open multiple accounts, and shall not be misappropriated or diverted in any form. But in the “IOU incident” in Dingyuan County, Anhui, the funds Sinograin paid to Minsheng Rice Industry and various brokers were actually used to “do real estate,” and the so-called “shall not be misappropriated or diverted in any form” became empty talk. Loose supervision easily harmed the interests of ordinary farming households who “live by grain.”

It is worth noting that many reports mention that the selection of grain collection brokers is mostly “determined by the person in charge of the enterprise, who finds people he trusts. Large amounts of grain funds are controlled by a small number of people, and these are precisely the friends, relatives, or people with certain connections of the grain purchasing enterprises.” The potential “industry tricks” and “abuse of power” here show complete disregard for relevant regulations and procedural norms.

What worries the public even more is that operational loopholes and chaos like this may not be isolated cases. This exposed case in Dingyuan, Anhui, may have only torn open one gap in China's “hidden rules” of grain purchasing. From a policy perspective, grain purchasing is not lacking relevant supervision and punishment provisions, but in actual implementation, human “failure to follow the rules” and exploiting policy loopholes inevitably make these rules “exist in name only.”

From another perspective, central state-owned enterprises like Sinograin naturally create a “signboard effect” for ordinary people. When farming households supplied grain to a “central-branded” enterprise, they probably never expected to end up “chasing after purchase payments.” The social responsibility that central state-owned enterprises should bear is inevitably greatly diminished in the face of the people's trust.

There is an old Chinese saying——food is heaven for the people. For the more than 900 million farmers who live by selling grain, this saying is even more profound. For whatever reason, in the grain purchasing process involving the vital interests of farmers, Sinograin truly should not shift responsibility to others. Anticipating risks, strictly supervising, and executing according to regulations are the mission and responsibility that the “granary under heaven” should originally bear.