Aftermath of irrigation suspension: Grain prices in Taoyuan, Hsinchu and Miaoli hit bottom; secondary-grade rice drags down non-irrigation-suspension premium rice; "one country, multiple systems" for grain prices leaves farmers suffering

Farmland in the Taoyuan, Hsinchu and Miaoli area has had irrigation suspended, yet there is "one country, multiple systems": some farmers received compensation and also sold their grain, while others cannot even get a stable grain price.

Under the irrigation-suspension compensation rules, rice harvested in suspension zones cannot be delivered as public grain under the "guaranteed-price purchase system." However, farmers could not bear to let part of their mature rice rot in the fields, so they still harvested it and sold it to grain merchants, except that most of the grain was of poor quality and fetched low prices.

Unexpectedly, chaos ensued! Farmers in non-suspension zones in Taoyuan, Hsinchu and Miaoli point out that in previous years the purchase price for 100 Taiwan jin of wet grain in non-suspension zones was 950 yuan, but now they are dragged down by the suspension zones, and grain merchants are taking the opportunity to push prices down, with the purchase price falling to only 750 yuan. Farmers say the 2 yuan per jin difference is the rice farmer's profit margin; non-suspension zones already cannot receive subsidies and now are having their profits stripped away, "simply unfair."

However, the Agriculture and Food Agency guarantees that it has reached consensus with farmers' associations and grain merchants to purchase by rice quality grade and absolutely will not force everyone down to secondary-grade rice prices. Yet when "Upstream and Downstream" visited farmers' associations in Hsinchu and Taoyuan in person, it found that there was no such thing as "graded purchasing." Grain merchants claimed their warehouses were full, yet refused to let reporters inside to take photos.

Rice prices dragged down by suspension zones: Who will look after farmers in non-suspension zones?

Longtan District in Taoyuan City broke away from the Shimen irrigation zone 40 years ago and relies on nearby ponds and streams to meet its irrigation needs. When Taoyuan, Hsinchu and Miaoli were forced to suspend irrigation this time, Longtan was one of the few areas that did not need to suspend irrigation, and its farmers could harvest normally matured rice. But the farmers never expected that grain merchants would use the prices for poor-quality rice from suspension zones to buy normal rice from non-suspension zones.

"Hongnong Fresh Grain" is a well-known champion rice in Longtan. Farmer Yang Haiguang heard rice prices were bad and did not dare harvest. "But if I don't harvest, I can't leave it too long either. This is the sad part of being a farmer."

Longtan farmer Xu Yuhan has 1.8 hectares of farmland. He heard the farmers' association's purchase price follows outside grain merchants, currently 750 yuan. Xu Yuhan asked, "The farmers' association should be the farmers' patriarch and should help farmers raise market prices. How can it follow merchants in cutting prices?"

Farmer Zeng Shengqing said dry grain can be refrigerated for storage, while wet grain cannot be stored long, and most rice farmers have no drying equipment, so after harvesting wet grain farmers send it as quickly as possible to the farmers' association or grain merchants for drying. Grain merchants and farmers' associations set the purchase price, and farmers can only accept it, "as if someone has them by the throat."

These farmers are all residents of Wushulin Village in Longtan. Village chief Zeng Shengjia questioned whether the Agriculture and Food Agency had done any work at all to balance grain prices. He asked angrily, "Has the Agriculture and Food Agency been kidnapped by grain merchants?"

A 750 yuan wet-grain price leaves no profit at all; farmers wish they had been put under irrigation suspension

Xinpu in Hsinchu County is also a non-suspension zone. Farmer Fan Ganghua said last year's purchase price was over 900 yuan, and he heard this year it abruptly dropped by 200 yuan. "But suspension zones took compensation and also found their own water sources for irrigation. After harvest, when they sell rice, even at worst they get 60,000 to 70,000 yuan per hectare, which amounts to 200,000 yuan per hectare." He said, "Many farmers in Xinpu say they wish they had been put under irrigation suspension."

Zeng Shuicheng, chief executive of the Taiwan Rice Association, is also helping harvest rice in Xinpu. He said 750 yuan is truly unreasonable. "In our Changhua area, the second crop gets at least over 900 yuan," he added. "It should be the impact of rice from suspension zones being put on the market. For those not suspended, after deducting rent, custom work, pesticides and so on, over 700 yuan is simply not enough."

Grain merchants stress grain quality is poor and warehouses are full, so prices cannot go higher

According to the Council of Agriculture's "guaranteed-price purchase system," for second-crop rice delivered as public grain at the guaranteed price, each hectare can deliver up to 4,700 kilograms of public grain. Prices are divided into three levels: "planned purchase" (26 yuan/kg), "guided purchase" (23 yuan/kg) and "surplus grain purchase" (21.6 yuan/kg). Rice exceeding 4,700 kilograms is all self-managed grain (remaining grain), which farmers usually sell themselves to farmers' associations or grain merchants.

However, this year because most rice in suspension zones is of poor quality, when self-managed grain is delivered, grain merchants, doing business as business, cannot offer the same prices as in previous years. Liu Hongsheng, head of Hsinchu's Lao Yongchang Rice Mill, said, "I still have ten months of inventory in my warehouse." When warehouses cannot take in more rice, how could prices possibly be high?

Xu Xinsong, head of Xinsongren Rice Mill, said, "It's not that we grain merchants are pushing rice prices down, it's that the rice is bad!" Half the wet grain is unripe rice, and milled white rice from dry grain is also down 15%, so it is impossible to pay the previous price. "We now buy wet grain at 700 yuan per 100 jin. There are many empty kernels, yet farmers still keep calling the Agriculture and Food Agency to protest," he said, his tone full of helplessness.

But even for premium rice from non-suspension zones, Xu Xinsong is willing to raise the price by only 50 yuan. He said, "For Longtan I'm willing to buy at 750 yuan, but I don't have that much (warehouse) space."

Longtan Farmers' Association: We must follow grain merchants' pricing, otherwise warehouses will overflow

In response to farmers' questioning that the farmers' association follows grain merchants' pricing, Chen Mengwen, general secretary of the Longtan District Farmers' Association, said, "If I don't refer to grain merchants' prices, then people from Pingzhen and Daxi will all truck their remaining grain to Longtan. Won't my warehouse overflow?"

Can't the Longtan Farmers' Association buy only Longtan rice? Chen Mengwen replied, "Farmers are very clever. They will find a way to take surplus grain collected elsewhere and register under a name in Longtan to deliver it. That is what we worry about, so we don't dare set the price too high." He continued, "If I buy at too high a price, other farmers' associations will also protest."

November 16 was the first day the Longtan and Xinpu farmers' associations collected grain. The Longtan Farmers' Association set a single self-managed grain purchase price: 750 yuan for wet grain. On the same day, the Xinpu Farmers' Association's purchase price was 1,050 yuan for dry grain (that is, 840 yuan for wet grain), both below previous years' levels.

Agriculture and Food Agency says consensus reached with grain merchants, proposes graded purchase price table

Regarding the dispute over rice prices in non-suspension zones this time, Lin Meihua, deputy chief of the Northern Branch of the Agriculture and Food Agency, responded that last week consensus had already been reached with farmers' associations and grain businesses that purchases must be priced by quality grade, and that the price for each quality grade should be announced to avoid misunderstandings. She presented a five-level table for grain merchants and farmers' associations: "As long as it reaches a test weight of 540 and moisture content is between 25-28, the basic price is 840 yuan." If it does not meet this standard and a dispute arises between farmers and grain merchants, the Agriculture and Food Agency is willing to "mediate."

In addition, Lin Meihua also pointed out that although rice from suspension zones cannot be delivered as public grain, from the standpoint of looking after farmers, public warehouses still purchased this rice; it simply could not be paid to farmers at the public grain purchase price and instead was handled according to the above-mentioned "five-level purchase." She emphasized that it was not "large quantity" that crushed prices, but mainly "low quality," so the government hopes grain merchants can differentiate prices by quality.

They say one thing above and do another below; most farmers' associations and grain merchants have no grading

If farmers' associations and grain merchants both carried out graded purchases as the Agriculture and Food Agency suggested, why would premium rice from farmers in non-suspension zones still face low prices?

When "Upstream and Downstream" actually visited the rice warehouses of the Longtan and Xinpu farmers' associations, neither had the "grading table" provided by the Agriculture and Food Agency. The single price announced by the Longtan Farmers' Association was 750 yuan, and that by the Xinpu Farmers' Association was 840 yuan. In addition, farmer Chen Xinxiong of Yuanli told "Upstream and Downstream" that the Yuanli Farmers' Association purchases rice at two grades, 750 yuan and 840 yuan. The Zhubei Farmers' Association, which was to open its warehouse on the 20th, said it would purchase at five levels after opening.

Since November 16 was the first day of warehouse opening, it might still be understandable that the farmers' association did not purchase by grade. To be prudent, reporters went again to the Taoyuan-Hsinchu area on the 19th to investigate, but unexpectedly the situation of "saying one thing above and doing another below" was just as on the first day.

The Guanxi Farmers' Association in a non-suspension zone had not posted the five-level table. Staff member Mr. Zhang said, "The file is on the computer. If you want, I can print you a five-level table." Director Xie nearby added, "Regardless of test weight, we just give one price, 1,070 yuan (meaning dry grain)."

Arriving next at the Longtan Farmers' Association's Huangtang rice warehouse, not only was no grading table posted, but the announced price for self-managed grain still remained 750 yuan, and farmers also confirmed this price. Yet Longtan is not a suspension zone, this crop's rice quality is normal, and it has the "Longquan Rice" brand, so its price unexpectedly did not even reach the grading table's basic price of 840 yuan. No wonder Longtan farmers angrily shouted, "The farmers' association doesn't look after farmers at all."

Although the Xinpu Farmers' Association's self-managed grain price reached the low threshold of 840 yuan, this was a single price and was not graded by test weight. When reporters asked why no grading table was posted, association personnel only then took the form out of a drawer. Director Ye of the supply and marketing department even said, "If you want to photograph it, I can post it for you to photograph."

It was clearly a form obtained last week, so why refuse to post it? Director Ye said, "We only received a phone call yesterday afternoon, and there was no official document either. Actually, we have already submitted a request upward to the general secretary, but the boss has not signed off yet." She stated directly, "Without an official document, we simply don't have to pay attention to it."

Farmers simply did not know there was a five-level table, and yielded to the farmers' associations' and grain merchants' single low price

Director Ye then said that this year's second-crop harvest was low, and farmers did not even have enough to deliver public grain, so no one would deliver self-managed grain; therefore