Will corn be hard to sell this year under the new mechanism?
In the golden autumn season, it is exactly the time when autumn grain is gathered into the granary. Northeast China is an important corn-growing region in our country. According to notices recently issued by the National Development and Reform Commission, the National Grain Administration and other departments, corn purchasing in Northeast China this year will be carried out according to the principle of "market pricing, separation of price and subsidy." Under this new mechanism of "market-based purchasing" plus "subsidies" for corn procurement and storage, how will farmers sell their corn this year? Will there be difficulty in selling corn?
The new corn procurement and storage mechanism will be implemented for the first time
According to the "Notice on Effectively Doing a Good Job in Corn Purchasing in Northeast China This Year" recently jointly issued by six departments including the National Development and Reform Commission, the National Grain Administration, the Ministry of Finance and the Ministry of Agriculture, this year the state will reform the corn procurement and storage system according to the principle of "market pricing, separation of price and subsidy," adjusting the temporary corn procurement and storage policy to a new mechanism of "market-based purchasing" plus "subsidies." Corn prices will be formed by the market, reflecting market supply and demand, regulating production and demand, with producers selling corn according to market conditions and various market entities independently entering the market to purchase.
With farmers independently selling corn on the market, how can enthusiasm for growing grain be protected against the backdrop of huge corn inventories? A relevant person in charge of the Ministry of Finance explained that this is the content of "separation of price and subsidy." This year the State Council decided to establish a corn producer subsidy system in the three northeastern provinces (Liaoning, Jilin, Heilongjiang) and the Inner Mongolia Autonomous Region. The subsidy previously given to farmers through a relatively high purchase price when farmers sold grain will be changed to a subsidy given to growers: corn prices will be formed by the market, while the central government finance will give a certain subsidy to the three northeastern provinces and the Inner Mongolia Autonomous Region, and encourage local areas to concentrate subsidy funds in advantageous production areas to ensure that corn planting returns in advantageous production areas remain basically stable; the state will maintain a consistent per-mu subsidy level for all provinces (regions), and the subsidy base period will also remain unchanged for a certain number of years.
Under this new subsidy model, how will the money be paid to farmers? The person in charge of the Ministry of Finance said that the central government finance will allocate a certain amount of subsidy funds to provincial-level finance and grant local areas decision-making power, with each province and region formulating specific subsidy implementation plans and determining the subsidy scope, subsidy recipients, subsidy basis, subsidy standards, etc. for its own province or region. Subsidy operations should remain open and transparent. Local governments should make full use of the previous working foundation of direct grain subsidies when allocating subsidy funds, consciously accept supervision from relevant sectors of society, and effectively strengthen organization and implementation to ensure that state fiscal subsidy funds are paid to corn producers.
A relevant person in charge of the grain system in Heilongjiang Province said that at present, new corn is gradually coming onto the market from south to north, and October is expected to be the peak period for market entry. By then, the new corn procurement and storage mechanism will face farmers for the first time.
Farmers must find markets themselves
Yuan Fengbo, a farmer in Fuxin Village, Long'anqiao Town, Fuyu County, Heilongjiang Province, is a large grain-growing household in the area, with about 2,000 mu of corn planted this year. Yuan Fengbo worries that grain sales this year will be a major problem. He said that in previous years farmers sold their grain to state grain depots, and even if some farmers sold corn to grain brokers, in the end the brokers mostly sold it to state grain depots. But this year they must find markets themselves, and the pressure is great.
According to local town and village officials, after the cancellation of temporary corn storage, the state will give farmers subsidies at the corn planting stage, so farmers will receive part of the benefit. But the implementation of market-based purchasing means that corn, the policy grain that had been supported by the market for many years, will become market grain. Without state market support, farmers accustomed to selling corn to state grain stations will face a certain shock this year.
Guo Tao, head of the storage and transportation section of the Fuyu County Grain Bureau in Heilongjiang Province, said that in the past few years Heilongjiang Province had always implemented the temporary corn storage policy, namely purchasing corn to "support the market," with grain depot points undertaking corn procurement and storage tasks purchasing without limit. Relative to market prices, the temporary corn storage price had long remained at a high level. Affected by this, in recent years most corn in Heilongjiang Province entered state reserve depots, while a small portion entered market circulation links such as trade and deep-processing enterprises.
A relevant person in charge of the finance department of Heilongjiang Province said that, in accordance with the Heilongjiang Province corn subsidy plan, the province is calculating and determining the per-mu corn subsidy standard for Heilongjiang Province based on the total corn producer subsidy funds for the whole province and the legally verified actual corn planting area verified by the Provincial Bureau of Statistics and the Agricultural Commission.
Governor responsibility system prevents difficulty in selling grain
In the first year of the new policy, how can large-scale difficulty in selling grain be avoided when farmers cannot find markets? A relevant person from the National Development and Reform Commission responded that the six departments issued the document in advance before corn purchasing began in order to urge and constrain all relevant parties to work together and jointly do a good job in corn purchasing in Northeast China this year.
Who is responsible for this matter? In the notice jointly issued by the six departments, it is clearly required to establish and improve a working mechanism led by responsible local government officials, strengthen organizational leadership, strengthen departmental coordination, clarify the division of responsibilities, implement responsibilities at every level, and coordinate corn purchasing work within the region. The notice requires promptly formulating targeted and highly operable purchasing work plans, ensuring that someone purchases grain, there is money to purchase grain, and there are warehouses to purchase grain, so as to prevent farmers from experiencing "difficulty in selling grain."
Where are the markets farmers need? The notice also says: all relevant regions should take effective measures to coordinate and organize branch institutions of central enterprises within their jurisdictions and local key grain enterprises to take the lead in entering the market to purchase, encourage and guide diverse market entities to actively enter the market, and mobilize and protect the enthusiasm of enterprises. Give full play to the "regulator" role of grain processing, encourage enterprises to process and transform grain, support qualified enterprises in extending industrial chains, vigorously develop deep processing, and promote coordinated development of the upstream and downstream of the corn industry.
There are also clear requirements for the enterprises that were the main players in grain purchasing in the past: Sinograin should, after new grain comes onto the market, carry out rotation into central reserves and state one-time reserve corn in an orderly manner; relevant central enterprises such as COFCO and AVIC should make full use of their own channels and advantages to carry out market-based purchasing, strive not to fall below last year's policy-based purchasing volume, and play a good leading and driving role; central enterprises should comprehensively consider market trends and the purchasing situation of other market entities, reasonably grasp the timing and pace of purchasing, and always remain "in the market" for balanced purchasing.
Can farmers receive the subsidies under the new mechanism? The notice also stipulates: during the new grain purchasing period, local governments and relevant departments should formulate and implement the corn producer subsidy implementation plan, and truly pay the subsidies to actual growers.