With grain harvests abundant for years running, Ding Shengjun stresses the need to maintain strategic resolve

As China's grain harvests have been abundant for many years in a row, the pattern of grain production and marketing has undergone major changes, with phenomena such as high grain output, high procurement volumes and high inventory levels becoming prominent, and problems such as difficulties in operating grain enterprises and difficulties for farmers in selling grain emerging in some places. Domestic food security is facing new tests and there are certain constraining factors. To this end, our newspaper interviewed Ding Shengjun, executive director of the China Grain Economy Association.

Reporter: How do you view the current food security situation in China?

Ding Shengjun: China's grain production has broken the cycle of “two abundant years, two average years, one poor year”, attracting global attention. However, China's food security still faces many contradictions and problems. For example, the medium- and long-term balance of total grain supply and demand coexists with phased oversupply of certain varieties; the grain support price faces “squeezing from both sides” while there is also a need to protect the interests of grain farmers; the issue of protecting the “two enthusiasms” - that of major grain-producing areas and that of farmers in those areas for growing grain - has not been fundamentally resolved; and the international competitiveness of the grain industry and grain enterprises is relatively weak.

In particular, China's food security still faces risks at present, and the biggest risk lies in the tendency for the understanding of grain's “dual foundation” status to weaken, with the thinking of “valuing industry over agriculture” and “valuing cities over the countryside” being widespread. Therefore, while enjoying the joy of successive years of abundant grain harvests, we must not be blindly optimistic; we must keep the “string” of food security taut and firmly grasp the initiative in grain.

Reporter: At present, domestic and international grain prices are inverted, leading to high grain inventories in China and increasing imports year by year. Some enterprises and industry insiders even believe that “growing grain is not as good as buying grain” and “low-priced grain is not to be missed”. How do you view these phenomena?

Ding Shengjun: Grain is a quasi-public good and is related to people's survival. For grain production, one needs to calculate both the security account and the economic account. The assessment of food security cannot simply calculate the economic account of costs and prices. No government would ever allow a failure in food security. It is understood that South Korea and Japan, in a globalized environment, have done their utmost to resist the temptation and pressure of low-priced grain, giving special protection to their own agricultural production, preferring to produce grain at high cost in order to ensure the interests of their farmers and their own agriculture. At present, some enterprises and industry insiders believe that “growing grain is not as good as buying grain” and “low-priced grain is not to be missed”; when they shortsightedly see periodic low prices of foreign grain, they cannot resist the impulse to seek petty gains and rush to expand imports of low-priced grain, planting hidden dangers for food security.

We actively advocate having the courage and ability to make use of both markets and both types of resources, but we must implement the new food security strategy comprehensively and accurately, and import grain moderately. So-called moderate imports not only mean that the quantity imported should be appropriate, but also that the timing and space should be appropriate and the varieties should be appropriate - that is, at the appropriate time for domestic market demand, import appropriate varieties and appropriate quantities of agricultural products from appropriate places, rather than considering only price single-mindedly and, disregarding the needs of the domestic market and agricultural production, buying up cheap goods in large quantities regardless of everything. Moreover, grain prices change rapidly, and domestic and international grain market prices and their price differentials are highly variable. If grain can be imported at a low price this year, next year or the year after, when circumstances have changed, it may not be possible to buy grain at a low price.

Reporter: Faced with the grain “three highs” problem, some people believe that the structure of grain production should be adjusted and the area planted to grain reduced. How do you think the structure of grain production should be adjusted? How can China maintain its strategic resolve on grain?

Ding Shengjun: Reasonably adjusting the structure of grain production according to the times and local conditions conforms to objective laws. Especially at present, in order to escape the predicament of the grain “three highs” of high output, high inventory and high imports, transforming the mode of grain production and implementing grain structural adjustment are even more necessary. However, adjusting the grain structure, including adjustment of variety structure and layout structure, is in essence also about regulating the mode of agricultural development. Regulating the mode of agricultural development must respect objective economic laws; otherwise, we will repeat the detours we have taken more than once. In the past, adjustments or regulations adopted a mandatory approach, leading to excessively rapid and drastic reductions in grain area and sharp declines in output. In the mid-1980s, during the adjustment of the grain structure, the area planted to grain was reduced too much, causing a “saddle-shaped” dip in grain production, bringing losses to farmers' interests and causing fluctuations in market supply and demand. Therefore, adjusting the grain structure must give play to the decisive role of the market mechanism in allocating resources and the effective safeguarding role of the government, adopt precise governance measures, and realize the transformation from a traditional grain industry to a modern high-end grain industry.

At present, multiple contradictions in China's grain market are intertwined. Under complex circumstances, we should not understand and handle the grain “three highs” problem in a simplistic way. Starting from China's basic national conditions and macroeconomic environment, we must accurately grasp the agricultural situation and the grain situation, and always maintain strategic resolve on grain. We must enhance confidence in development, persist in seeking novelty in change, seeking progress in change and seeking breakthroughs in change, and blaze a new path of development with higher quality, better returns and a more optimal structure.