Rice will no longer have a minimum purchase price starting next year, and farmers will receive subsidies directly

As is well known, China's three major grain crops are corn, rice, and wheat, and all three have implemented a minimum purchase price policy. However, the protective price for corn has already been abolished, and this year, both rice and wheat saw their first downward adjustment of the minimum purchase price! However, recently,according to the latest news release, starting next year, the minimum purchase price policy for rice and wheat will also be abolished, and a policy of "market pricing, separation of price and subsidy" will be implemented, with a direct subsidy of 100-150 yuan/mu for growing rice;

Why was the minimum purchase price for grain introduced? And why is it being abolished?

　　Reasons for introduction

First, from the perspective of the history of grain fluctuations in China, such situations have often occurred: after consecutive bumper harvests, consecutive production reductions inevitably follow. This phenomenon greatly affected farmers' enthusiasm for growing grain. Therefore, the state proposed implementing the minimum purchase price policy for grain precisely to prevent history from repeating itself;

Second, with the continuous development of China's economy, the "three rural issues" increasingly need attention, and increasing grain production and farmers' incomes are the key to the "three rural issues." Therefore, the minimum purchase price policy for grain was proposed precisely to protect farmers' interests, ensure grain market supply, and mobilize farmers' enthusiasm for growing grain;

　　Reasons for abolition

　　In the process of implementing the minimum purchase price policy, certain problems exist

In 2004 and 2006, based on the overall grain market situation at the time, the state successively introduced minimum purchase price policies for paddy rice and wheat. After that, important grain and agricultural crops such as corn, soybeans, and cotton were also included in the minimum purchase price policy; however, in the actual implementation process, quite a few problems existed;

　　2014was the year when the minimum purchase price for soybeans was adjusted, and it was also seen as the beginning of the transition of the "protective price" for grain and important crops to a "market price"; in this year, China'ssoybean output fell to about 13.85 million tons, while imports reached around 78.5 million tons. The loose distinction between domestic soybeans and imported soybeans formed two different price systems, which in fact indicated that the minimum purchase price had already "existed in name only";

As for corn, as of2015before the adjustment of the corn purchase and storage policy at the end of the year,China's domestic corn inventory exceeded 200 million tons, equivalent to China's annual corn output. The huge inventory not only caused waste and consumption of resources, but also had a negative impact on other crops and the entire agricultural product market;

　　After the implementation of market pricing, the grain crop market situation improved

After the purchase and storage policies for soybeans and corn were fully abolished in 2016, and a model was proposed with market pricing as the main body and planting subsidies as a supplement, from the current perspective, data shows that in 2017, China's domestic soybean output is expected to rise from the low point of around 12 million tons in recent years to more than 15 million tons; and domestic corn inventory has also declined accordingly, weakening pressure on the market;

Implementing market pricing and giving farmers subsidies directly: is it good or bad?

In fact, this year's adjustment of the purchase and storage policies for rice and wheat marks the beginning of a fully market-oriented pricing model for crops. Among them, the adjustment of the minimum purchase price for rice was the first downward adjustment since the policy was implemented in 2004. The minimum purchase prices for early indica rice, mid-late rice, and japonica rice were 130 yuan, 136 yuan, and 150 yuan per 50 kg respectively; and the 2018 minimum purchase price for wheat was also adjusted to 1.15 yuan/jin, down 0.03 yuan/jin from this year;

According to Chen Xiwen, starting from the listing of next year's summer grain and early rice, the minimum purchase price system for wheat and rice in main producing areas will be abolished. According to the method of production cost plus subsidy, the subsidy for rice will be 100-150 yuan per mu; at present,the average production cost of paddy rice is 1.21 yuan/jin, the average yield per mu is 915 jin, and the 11 main producing provinces that implement the minimum purchase price for paddy rice have a total paddy rice area of 349 million mu. It is suggested to subsidize 0.1 yuan per jin of paddy rice, 100 yuan per mu, with a total subsidy amount reaching 37.3 billion yuan!(Among them, Heilongjiang ( agricultural land, commercial and residential land, industrial land) Province subsidizes 0.15 yuan per jin, 150 yuan per mu)

　　The average wheat yield per mu is 710 jin. The 6 provinces that implement the minimum purchase price for wheat have a total wheat area of 260 million mu. If calculated at a subsidy of 0.1 yuan per jin and 80 yuan per mu, the total subsidy is 20.8 billion yuan；