Major changes have occurred in the variety structure of grain supply and demand

In recent years, the grain production situation has seen an unprecedented good situation. In 2003, the national total grain output was 864 billion, and by last year it had risen to 1,249.5 billion. During the 12-year period, total grain output increased by 385.5 billion, with an average annual increase of more than 30 billion. There have been 12 consecutive years of good situation, with grain output increasing and farmers' incomes continuing to rise. However, everything has two sides. At present, we have two grain prices that are 30% to 50% higher than the market.

From our current situation, the most prominent problem is that the supply of corn is excessive, and the supply of soybeans has clearly increased. This is something we have deeply experienced. Last year's grain output was 1,249 billion jin, while our past demand was roughly 1,280-1,290 billion jin. Compared with our total demand, in terms of total volume, we are in short supply. Looking only at last year, we had a grain demand gap of 40-50 billion jin, and last year's grain imports were close to 250 billion. So here comes the problem: with only a gap of 40 or 50 billion jin, last year's imported grain was nearly 250 billion, which was more than 200 billion jin more than our gap. Of that, 160 billion jin was soybeans. With more soybeans, our own grain is affected. From this perspective, a prominent problem we currently face is that the variety structure of supply and demand has undergone very great changes, and next we need to address this problem.

Since the 16th National Congress, agricultural policy has played a huge role in mobilising farmers' enthusiasm. First, the agricultural tax was abolished; second, direct subsidies were provided for grain production, amounting to 270 billion a year, which had a certain effect on reducing farmers' production costs and increased farmers' incomes; third, in the grain market, production of products in short supply was supported, freeing them from worries. These policies, especially those related to prices and structure, have been implemented for more than ten years. Looking back, the advantages outweighed the disadvantages, with the most prominent manifestation being two varieties in 2004, wheat and rice. In 2004, the price of wheat was 0.72 yuan per jin, while the current price is more than 1 yuan per jin. When the policy was first introduced, the price of rice, with japonica rice at the time at 0.72 yuan per jin, and several years later, the current price is 1.33 yuan per jin, and prices of middle-season rice and others have also risen. At that time, the price of corn did not rise, but in 2007 corn was 0.7 yuan per jin, and by the year before last it had already reached 1.02 yuan.

Looking back, grain has in fact always been subject to a government minimum purchase price. Over the past seven or eight years, the pricing mechanism was in fact not implemented by the market, but rather pricing was implemented by the government.