Is Growing Grain Actually Profitable? Funding Woes Plague Grain Cooperatives
With grain in hand, the heart is at ease. As a new type of agricultural business entity, grain cooperatives have gradually become the dominant force in grain production. How are grain-growing cooperatives developing today? On December 5, a reporter traveled to Wuzhi County, Jiaozuo City, Henan Province to find out.
Funding Woes Plague Grain Cooperatives
Guo Falu is the chairman of the Guo'an Falu Agricultural Machinery Cooperative in Wuzhi County. This year the cooperative planted 2,450 mu of land, mainly wheat and corn. At the same time, it also manages nearly 10,000 mu of land under contract, handling the plowing, planting and harvesting of this land. He told the reporter that for the land transferred to the cooperative, the state provides a 200 yuan per mu subsidy for agricultural supplies. After deducting labor, machinery, agricultural supplies and other costs, the final net income is more than 500 yuan per mu per year, but because the cooperative's development investment is too large, all the profits are plowed back into the land.
⟦NL> This year Henan Province suffered a combined summer-autumn drought, and Guo Falu's cooperative was also affected. "Corn averaged 1,250 jin per mu. Although the yield was not low, the investment in watering was relatively large," said Guo Faqing, the cooperative's supervisor. Faced with the high cost of installing sprinkler irrigation equipment, Guo Falu could not come up with so much money at once. "Sprinkler irrigation saves money, but the upfront investment is relatively large. The underground piping alone costs about 500 yuan per mu," Guo Falu said helplessly.
The reporter learned that many grain cooperatives in Wuzhi County face financing difficulties. To help cooperatives solve the problem of insufficient funds, this year the Jiaozuo Municipal Party Committee Agricultural Office set aside 10 million yuan as guarantee funds to provide loan guarantees for cooperatives. At the same time, grain-growing cooperatives that reach a certain scale are given a 300,000 yuan subsidy, to ease the financing difficulties of agricultural planting cooperatives. Guo Falu's cooperative received a 300,000 yuan subsidy for a drying project.
"I don't have much ability. I can only drive a tractor and farm, dealing with the land all year round. Now the government's policies are better, and I am also preparing to phase out the traditional planting model and develop a fully modernized, large-scale planting model. Although funds are still short now, I will not give up the land. Policy support gives us more confidence to persist in growing grain," Guo Falu finally told the reporter.
Building the Hanxiang Rice Brand
In Maxuanzhai Village, Qiaomiao Township, Wuzhi County, the reporter met Wang Fujun, chairman of the Henan Hanxiang Ecological Agriculture Cooperative. According to him, the cooperative was established in 2006, with a planting area of 2,100 mu, mainly rotating rice and wheat in two seasons. Next year Wang Fujun also plans to transfer another 3,000 mu. Because the cooperative started early and its production conditions are basically mature, Wang Fujun has now achieved full mechanization from planting to harvesting.
"Since I began large-scale land transfer in 2009, I have invested all profits in purchasing agricultural machinery and equipment. In 2013 we basically achieved full mechanization from planting to harvesting. Now the infrastructure is relatively complete. As long as there are no major natural disasters, our cooperative should have a bumper harvest every year," Wang Fujun said.
Under Wang Fujun's leadership, in 2012 the Hanxiang Ecological Agriculture Cooperative also spanned Jiaozuo and Xinxiang, taking the lead in establishing Henan's first cooperative union -- the Jiaozuo Hanxiang Along-the-Yellow-River Rice Cooperative Union. The union consists of 13 cooperatives. The land within the union is uniformly supplied with seeds and pesticides, uniformly managed and uniformly harvested. Finally, the Hanxiang Ecological Agriculture Cooperative purchases at a price 0.02 yuan per jin higher than the market price for unified processing and sales, building the Hanxiang brand, which focuses on green ecological rice from along the Yellow River.
"Now the grain of the cooperative union has never worried about sales. This year, affected by the drought, the water volume of the Yellow River decreased, so only 37,000 mu were planted. Next year we plan to expand the volume and uniformly supply seeds for 47,000 mu, to ensure the safe supply of source grain for Hanxiang rice," Wang Fujun said. At present, the rice within the cooperative union has already formed an industrial chain in production, management, storage and transportation, and sales. Hanxiang rice is also selling briskly through online sales, regular customers, direct-sales stores and other channels.
Multiple Measures to Support Grain Cooperatives
During the interview, the reporter also learned that since last year Wang Fujun has purchased insurance for the land within the cooperative, and negotiated with the insurance company to break the insurance regulation that compensation begins only when grain production falls by 50%. This year, due to the drought, the cooperative's land saw a reduction in production, but it also received a certain compensation from the insurance company. "Agricultural insurance should not be commercial in nature; it should be policy-based. With the current level of technology, it is impossible for land on the plains to reduce production by 50%. Ordinary people cannot see hope of compensation and would not buy it either. This is also the reason why agricultural insurance has been difficult to promote," said Wang Fujun, who also serves as vice chairman of the Henan Provincial Association for the Promotion of Modern Agricultural Development, speaking from the policy level.
In recent years, Wuzhi County has attached great importance to the development of cooperatives. Every year it allocates 3 million yuan from the county finance to adopt a fund reward policy for cooperatives, and at the same time provides partial subsidies to grain-growing cooperatives. The subsidies adopt a method of only increasing, not decreasing, to reduce the problem of fund shortages for cooperatives as much as possible.
For cooperative chairmen and principal persons in charge, Wuzhi County also gives them certain political treatment. More than 20 cooperative chairmen in Wuzhi County have been elected as municipal and county people's congress representatives and CPPCC members, giving them political identity, political status and influence in discourse, so that they can devote themselves wholeheartedly to the country's grain production.
As a new organizational form, farmer cooperatives have become a powerful support for farmers to develop together. In particular, many grain cooperatives have largely solved many problems such as idle land or low utilization rates caused by factors such as high planting costs and young and middle-aged laborers going to cities for work. However, as their scale grows day by day, grain cooperatives also face different opportunities and challenges.