Ease the pressure on corn deep-processing enterprises and boost industry development

According to incomplete statistics, in 2015 China's corn deep-processing industry consumed about 52 million tons of corn, accounting for 23% of that year's total corn output. The largest corn user was the starch sugar (alcohol) industry, which used about 16 million tons of corn, followed in order by commercial starch, corn alcohol, amino acids, organic acids, antibiotics, enzyme preparations, microbial polysaccharides and so on.

Large enterprises account for 40% of processing volume, implementing multi-variety, differentiated development

China's corn deep-processing is mainly concentrated in Shandong, Jilin, Heilongjiang, Inner Mongolia, Hebei, Henan, Anhui, Liaoning and other places. Shandong is the province with the largest corn deep-processing scale and the greatest variety of products; 3 corn deep-processing enterprise groups with an output value exceeding 10 billion yuan are located in Shandong.

At present, China has 7 corn deep-processing enterprises with annual sales revenue of more than 5 billion yuan, and the corn processing volume of these 7 enterprises in 2015 accounted for about 40% of the national total processing volume. A common feature of these large corn deep-processing enterprises is the implementation of a multi-variety and differentiated development strategy, in order to maintain their own unique advantages in market competition. From the perspective of development expectations, in the future, through pathways such as corporate mergers and acquisitions, the number of large enterprises with a scale of 5 billion to 10 billion yuan may increase somewhat.

Core technology level is not high, cost pressure on enterprises increases

At present, the main problems in the industry are:

First, there are many potential new products, but their launch on the market is greatly restricted by laws and regulations. Under the current economic situation, due to the rigid demand characteristics of food and health food, research institutes are driven to actively develop various functional fermented products and related terminal consumer products, and R&D is active. However, because the Food Safety Law imposes increasingly strict market access requirements, the path to market for new products is long, which greatly affects enterprises' enthusiasm for developing new products.

Second, the core technology level urgently needs to be improved. One of the important factors affecting the overall rapid and stable development of China's corn deep-processing industry is the constraints in some common technologies, processes and equipment. Although China's fermentation technology has made remarkable progress, and a small number of bulk fermentation products have reached the international advanced level, the core technology level affecting industrial development still has a certain gap compared with foreign countries. Although the proportion of investment in research and development has increased significantly in recent years, it is still insufficient compared with foreign enterprises. Even our leading enterprises cannot compare with international multinational companies, resulting in relatively weak innovation in our key technologies and equipment and a relatively low proportion of emerging products.

Third, cost pressure continues to increase. With this year's reform of the national temporary corn storage policy, the corn raw material problem that has plagued the development of the corn deep-processing industry for years has been effectively alleviated, but at the same time, as the state imposes increasingly high requirements on environmental protection and resource and energy consumption, environmental protection investment continues to increase, and labor costs are also constantly rising. The increase in costs has hindered product exports, and the pressure on enterprise development has continued to grow, which to a certain extent has slowed the pace of industry development and also intensified the reshuffling of the industry.

Suggest issuing preferential policies to support the industry through difficulties

In response to the current problems in the industry, to boost domestic corn deep-processing and promote corn destocking, it is suggested:

Moderately relax restrictions on the corn processing industry. The "Guiding Opinions on Promoting the Healthy Development of the Corn Deep-Processing Industry" issued by the state in 2007 has been implemented for nearly 10 years, and many provisions no longer meet current development needs, such as many restrictive provisions on industry access (project construction approval, product structure adjustment direction, enterprise qualifications, etc.) and the controlled proportion of grain use scale. It is urgent to revise it, cancel some inapplicable provisions, truly let the market fully allocate industrial resources, so as to further reduce various costs of production enterprises, change strict approval into strict supervision, and adopt strict legal means to prohibit the operation of enterprises with excessive pollution.

Give corn deep-processing enterprises tax preferences. Implement preferential tax policies such as VAT reduction or exemption, or refund after collection, for the corn deep-processing industry, reduce enterprise production costs, promote the stable development of the corn deep-processing industry, so as to protect farmers' interests in growing grain and promote increases in farmers' income.

Encourage exports of corn processing products. Under the current circumstances, increase export tax rebates for corn processing products to raise the share of China's products in the international market and increase corn consumption. After corn supply and demand are balanced, export tax rebates can be flexibly lowered as one of the adjustment means.

Formulate subsidy policies that safeguard farmers' income and planting enthusiasm. For example, implement target price subsidies, appropriately increase agricultural planting land subsidies, and reduce agricultural planting costs as much as possible.