How to stabilize grain production and increase grain-growing income
The State Council executive meeting held on the 11th pointed out that China's grain output has increased for consecutive years and achieved another bumper harvest this year, strongly supporting economic and social development and the improvement of people's livelihoods, but there are also problems such as a sharp increase in inventories and falling prices. Multiple measures must be taken to effectively protect farmers' interests and their enthusiasm for growing grain.
Analysts believe that the measures to stabilize grain output and increase income decided at the meeting are very timely and conducive to safeguarding national food security and protecting the immediate interests of grain farmers.
"China's grain production this year may achieve a 'twelfth consecutive bumper harvest,' but heavy inventory pressure and falling grain prices have become the 'troubles of a bumper harvest.' If measures to stabilize grain output and increase income are not introduced in time, as autumn grain enters the market on a large scale, grain farmers may face the problem of 'difficulty in selling grain,'" said Li Guoxiang, a researcher at the Institute of Rural Development under the Chinese Academy of Social Sciences.
The reporter learned through interviews that in recent years, affected by the sluggish market, demand from grain processing enterprises has weakened, inventory pressure on grain has become prominent, and the grain inventory-to-consumption ratio has risen sharply, putting certain pressure on grain price trends. At the same time, affected by the first downward adjustment in eight years of the corn temporary storage price in September, low-priced wheat and indica rice prices in the market once showed a chain reaction of downward adjustments, and the overall trend of grain prices is not optimistic.
"It is worth noting that grain processing enterprises generally have the mentality of buying on rising prices rather than falling prices. It is conceivable that as large quantities of autumn grain enter the market, the phenomenon of difficulty in selling grain may resurface," Li Guoxiang said.
In response to this problem, the meeting clearly pointed out that autumn grain purchasing should be carried out well, investment in storage facility construction should be increased, the progress of grain depots under construction and those being repaired and renovated should be accelerated, inter-provincial depot transfer plans should be increased as needed, the transport of grain from the north to the south should be increased, policies encouraging processing enterprises to enter the market to purchase grain should be introduced promptly, "IOUs" and grade-suppression and price-suppression should be strictly investigated, and "difficulty in selling grain" should be prevented.
The meeting also pointed out that the mechanism for grain price formation and purchase and storage should be reformed, the subsidy policies for corn and soybeans should be improved, and the minimum purchase price policy for staple grain varieties such as wheat and rice should continue to be implemented next year.
"The meeting proposed that the minimum purchase price policy for staple grain varieties such as wheat and rice should continue to be implemented next year, which stabilizes market expectations, protects farmers' enthusiasm for growing grain, helps protect farmers' interests, and is of great significance to safeguarding food security," said Qin Fu, a researcher at the Chinese Academy of Agricultural Sciences.
"Policies need to be continuously improved." Qin Fu also said that historically, the minimum purchase price policy implemented for many consecutive years has brought the market an expectation of rigid upward adjustments in grain prices, causing phenomena such as increasingly high grain prices and a widening price gap between domestic and international markets. In the long run, it has distorted the grain market and is not conducive to stable grain production and increasing farmers' income. The "reform of the mechanism for grain price formation and purchase and storage" proposed at the meeting is imperative.
At present, China has launched pilot target price subsidies for soybeans in Northeast China and Inner Mongolia and for cotton in Xinjiang. According to the reform plan, if farmers sell cotton and soybeans below the previously determined target prices, the state will subsidize them. Experts believe that taking the target price system as the direction and reforming the original price formation mechanism and purchase and storage system is expected to ultimately solve the various difficulties currently facing China's grain market.