How to reduce the stockpiles of agricultural products and the irrational use of chemical fertilizers and pesticides

The Central Rural Work Conference was held in Beijing from the 24th to the 25th. The conference reviewed the work related to “agriculture, rural areas and farmers” during the “12th Five-Year Plan” period, and made arrangements for the work related to agriculture and rural areas in 2016 and during the “13th Five-Year Plan” period. Centering on structural reform in agriculture, the conference sent a strong policy signal of benefiting farmers, strengthening agriculture and enriching farmers.

For the first time it proposed “supply-side structural reform in agriculture”

The fresh expression “supply-side structural reform in agriculture” entered the public spotlight for the first time through China's highest-level conference on “agriculture, rural areas and farmers.” The conference stressed that efforts should be focused on strengthening supply-side structural reform in agriculture, improving the quality and efficiency of the agricultural supply system, ensuring that the quantity, variety and quality of agricultural product supply meet consumer needs, and truly forming an effective supply of agricultural products with a reasonable structure and strong safeguards.

“On the one hand, China's supply of low- and mid-range agricultural products is relatively sufficient; on the other hand, the supply of safe and reliable agricultural products is clearly insufficient.” Jiang Heping, a researcher at the Institute of Agricultural Economics and Development of the Chinese Academy of Agricultural Sciences, believes that to promote China's agricultural development from the supply-side perspective, the key is to gradually shift agricultural production from focusing mainly on quantity to placing equal emphasis on quantity and quality, paying more attention to efficiency and better meeting consumer demand.

Accelerate the digestion of excessive stockpiles of agricultural products

“De-stocking” and “cost reduction,” terms mostly used in the industrial sector, also appeared in concentrated form at this Central Rural Work Conference.

The conference proposed that at present, great importance should be attached to de-stocking, cost reduction and shoring up weak links; the digestion of excessive stockpiles of agricultural products should be accelerated, and the processing and conversion of grain should be accelerated; by developing appropriately scaled operations and reducing the irrational use of chemical fertilizers and pesticides, production costs should be lowered and agricultural efficiency and competitiveness improved; weak links in agricultural supply such as agricultural infrastructure should be strengthened, and the production of agricultural products in short supply on the market should be increased.

“For a country with a large population, a certain scale of grain reserves is indispensable. But if stockpiles are excessive, they will affect the reasonable trend of grain prices, and an oversized storage scale will also increase the fiscal burden.” said Jiao Jiang, chief agricultural economist of the Heilongjiang Academy of Agricultural Sciences.

“Compared with developed countries, China's rural infrastructure, farmland water conservancy construction and basic public services in rural areas still lag behind to a certain extent, becoming weak links constraining agricultural development. To make agriculture strong, the weak links must be shored up.” Jiang Heping said.

The price mechanism for agricultural products faces a “major overhaul”

The conference proposed that the price formation mechanism and purchase and storage policies for grain and other important agricultural products should be improved, and the price mechanism for agricultural products faces a “major overhaul.” Chen Xiwen, deputy head of the Central Rural Work Leading Group, believes that in the future prices and subsidies should be separated, with prices mainly formed by the market, and if market prices are too low, the government should adopt appropriate policies to directly subsidize farmers.