Reform of Corn Storage System: The First Hardship of Agricultural Supply Side Reform

[ China Agricultural Machinery Industry News ] As the first iconic hardship of the structural reform of the agricultural supply side, the reform of the corn storage system has been receiving much attention. In 2016, the three northeastern provinces and Inner Mongolia Autonomous Region adjusted the temporary corn storage and storage policy to a new mechanism of “market-based acquisition” and “subsidy”. In the past year, the reform has progressed smoothly and the results have been better than expected. In-depth review and summary of the reform experience is of great reference significance for further deepening the reform of the corn storage system, and even for further establishing and improving the price formation mechanism of other important agricultural products.

Reform of Corn Storage System: The First Hardship of Agricultural Supply Side Reform

China's corn temporary storage and storage policy began in 2007. Under the market environment at that time, the implementation of this system has its necessity and significance, and played an important role in protecting farmers' enthusiasm for growing grain, promoting farmers' income and ensuring national food security. . However, with the profound changes in the domestic and international markets, especially the decline in the prices of international bulk agricultural products, the continued implementation of the national purchasing and storage policy is objectively waged and fire-fighting, which has contributed to the distortion of market price signals and the failure of market mechanisms. The price of corn storage has climbed from 0.69 yuan per kilogram in 2007 to 1.11 yuan per kilogram in 2014. By 2015, the price difference between domestic and foreign corn was around 600 yuan, and domestic corn not only lost its competitiveness in the international market, but also lost. The domestic market competitiveness, the result is the emergence of the "three high" phenomenon of increased corn production, high inventory, and increased imports. From 2007 to 2015, China's corn production increased from 152 million tons to 225 million tons. The grain warehouses in various regions have experienced the embarrassing situation of “not accepting, adjusting, not selling, and not storing”. Corn processing, circulation and trade The chain of the industrial chain is also due to the high price of corn, showing a state of overall weakness. Under the double squeeze, not only the state bears a heavy financial subsidy burden, but also it is not conducive to the country's food security and the protection of farmers' interests in the long run. The reform of the corn storage system is imperative.

The reform of the corn storage and storage system has been carried out for one year and has achieved remarkable results. Market-based acquisitions have progressed smoothly, food prices have gradually returned to the market, various entities in the industrial chain have been activated, food processing, circulation, trade and other links have rebounded, and the financial pressure on corn storage and storage has decreased significantly, especially in the past due to the price of corn in the Northeast. High, food is difficult to transfer out, and now the price of corn has dropped, and the scale of “North Grain South Transportation” has increased significantly. The correction of corn prices has also prompted farmers to adjust their planting structure according to the market and actively choose more corn varieties or other crops with high economic benefits. This is also the inherent requirement of structural reform of the supply side of agriculture. In general, the reform of the corn storage system is conducive to correcting market distortions, reducing the pressure on policy collection and storage, enhancing the competitiveness of the corn industry, activating the vitality of the entire industrial chain, accelerating the marketization process of China's bulk agricultural products, and also benefiting from a long-term Fundamentally promote the healthy and sustainable development of the corn industry and protect the interests of farmers.

Any reform is accompanied by certain pains in varying degrees. In particular, such a major institutional reform involving the broad masses of peasants is likely to balance the demands of all parties and, to the extent possible, guarantee the basic benefits of the peasants and test the wisdom of the reformers. Since the implementation of the price-separation policy, in order to ensure a smooth transition of reforms and reduce risks as much as possible, governments and agricultural authorities at all levels have implemented a series of targeted measures from the central to the local level. On the one hand, establish a corn producer subsidy system to make up for the loss of farmers as much as possible. At the same time, comprehensive incentive measures are adopted to guide farmers to accelerate the adjustment of planting structure with higher market efficiency and increase planting income. On the other hand, through the award of the processing enterprises to buy corn in the market, the establishment of a corn purchase loan credit guarantee fund, the establishment of a food transportation capacity guarantee mechanism to ensure that there is “car transportation”, and promote the market acquisition and processing transformation of corn. For some particularly difficult farmers, increase production and living relief. The implementation of these measures has ensured the smooth implementation of the reform. At the same time, we must also see that the reform has saved financial expenditures and increased the efficiency of enterprises. However, farmers have certain losses and have undertaken part of the reform costs. For ordinary farmers, with subsidies, the income from planting corn has not decreased much, and it can be slightly surplus. For large-scale planters, in the short term, because of the high cost of land lease, the income per mu and subsidies are still significantly lower than last year. Some have also suffered losses. In addition, due to the fact that grain production has not been sold in the past few years, farmers have paid little attention to the accumulation of sales channels, and the market entities have not developed enough. There are still various stages of uneven purchase and sales and heavy pressure on transportation.

Therefore, on the one hand, we must persist in the general direction of market-oriented reform, unswervingly continue to promote and improve the market formation mechanism of corn prices, promote the adjustment and optimization of crop production structure, improve the quality of supply, and enhance the corn industry in China. Overall competitiveness. On the other hand, we must also adhere to the protection of the interests of farmers, promote the increase of farmers' income, and adopt comprehensive measures to reduce reform costs, reduce farmers' losses, and ensure smooth and smooth reforms. It is necessary to increase the support of central financial subsidies, innovate financial subsidies, improve the efficiency of subsidies, provide necessary assistance to people in need due to disaster reduction, and give necessary support to large grain growers with more decline in income, especially to solve the problem of spring tillage and development. The actual difficulties encountered in production prevent farmers from continuing to reduce their income. At the same time, we must also comprehensively implement policies, use supply and demand information release, market market warning, agricultural insurance, food deep processing, and strengthen financial support to buffer the risk of grain production, weaving a market safety protection network for farmers, and guiding farmers to adjust the planting structure. We must make great efforts in scientifically storing grain, finding sales channels for farmers, and improving the transportation capacity of corn, and do everything possible to increase profits and reduce losses.

Fundamentally, the ultimate goal of the reform of the corn storage system is to better protect the interests of farmers and ensure national food security. This is not only the starting point and the foothold of the reform, but also the inevitable requirement for the reform to develop in depth. The reform of the corn storage system is a step and an important step in the reform of China's agricultural product price formation mechanism and storage system.