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Wheat and rice purchasing and storage reform put on the agenda


In the context of the reform of the temporary storage and purchase policy for corn, one of the three staple grains, the reform of wheat and rice has also been put on the agenda. The industry generally believes that the minimum purchase price policy for wheat and rice will be reformed this year.
However, there is still resistance to reform. A few days ago, at the "2017 China Rural Development High-level Forum" held by the Rural Economic Research Center of the Ministry of Agriculture, some experts believed that the central government is concerned about food security and the local governments are concerned about increasing farmers' income. It is difficult for reform to achieve "two birds with one stone". In addition, the stakeholders involved in the reform are diversified, and the interests are often divided, so it is difficult to build consensus.
The above-mentioned experts believe that if the minimum purchase prices of rice and wheat are not adjusted in time, there will be a spillover effect of the policy. The relative price advantage of rice relative to corn in the Northeast will be more obvious, and it is possible that a large area of ​​rice will be replaced by corn; the Northwest will be replaced by wheat, which will further increase the pressure on rice and wheat inventory.
Although there is resistance to reform, it will not work without reform. Since 2014, the minimum purchase price policy for grain has continuously exceeded 50 million tons, and reached 54.1 million tons in 2015, which is equivalent to 20% of the volume of rice and wheat commodities. In 2015, the output of rice and wheat were more than 18.75 million tons and 15.99 million tons, respectively. Among them, rice has been surplus for 10 consecutive years. At this stage, domestic farmers’ selling prices of rice and wheat have been higher than the imported CIF price, and the domestic market has shifted to using lower-priced foreign grains, which has increased the pressure on grain imports and has also led to a large-scale influx of grain to policy-based purchases and storage. .
The above-mentioned experts suggest that the next step in the reform of the purchasing and storage system should be based on the principle of “separation of price and compensation”, and gradually separate the “income-guaranteed” function of the minimum purchase price policy, enhance policy flexibility and flexibility, and establish a corresponding benefit compensation mechanism to comprehensively use price and Subsidies and other means have established a ration support policy system that can not only give full play to the role of the market mechanism, but also promote the stable development of grain production and protect the interests of farmers. It conforms to WTO rules and China's national conditions. Taking into account the arduous nature of the reform of the ration price formation mechanism, the above-mentioned experts suggested that the minimum purchase price policy for early indica rice should be suspended in 2018, supplemented by compensation measures for the benefit of growing grain, to observe the impact and reaction of the grain market, and accumulate reform experience.
The reason why early indica rice was chosen to withdraw first is that early indica rice accounts for 17% of the total rice output. It is traditionally used as a ration, but from quality to taste, it is no longer suitable as the main ration for residents, and its direct consumption only accounts for the total rice ration. Processing consumption accounts for 12% of consumption, and the downstream industries have a high degree of marketization. Policy reforms have no significant impact on food production overall.
If this reform path is adopted, the price of early indica rice will return to the market, which will lower the price of rice to a certain extent, and cause certain losses to the interests of grain farmers in the five provinces that currently implement the lowest purchase price; it may lead to rice planting in the main producing areas Double changes to orders, rice output may decline to a certain extent. The output of early indica rice in Hunan and Jiangxi provinces accounted for 65.3% of the total output of early indica rice in the five lowest purchase price implementation provinces and 49.6% of the total output of early indica in the country. In the past three years, the lowest purchase price of early indica rice in the two provinces It accounts for more than 95% of the country's total purchase of early indica rice at the lowest purchase price. In order to cope with the risks and problems that may be caused by the suspension of the minimum purchase price policy for early indica rice, the above-mentioned experts suggested that the central government provide appropriate subsidies to the two main producing provinces of Hunan and Jiangxi.
At the same time, we must continue to implement the minimum purchase price policy for wheat, mid-late indica rice, and japonica rice, but the minimum purchase price level must be appropriately lowered. In the next stage, if the early indica rice policy reform pilot is successful in 3 to 5 years or longer from 2019, the japonica rice can be adjusted in phases and batches according to changes in the domestic and foreign grain market situation and the national food security mission requirements. 1. The scope of implementation of the minimum purchase price for mid-late indica rice and wheat.
Another way to reform is to reform the policy implementation mechanism. The above-mentioned experts suggest that on the basis of a stable minimum purchase price policy framework, and in accordance with the principle of separating price compensation, adjust the minimum purchase price to a reasonable level within 3 to 5 years so that the minimum purchase price no longer assumes the function of "increasing revenue". Mainly play the role of bottom purchase and solve the difficulty of selling grain, gradually establish a grain price formation mechanism based on market pricing, and eliminate the influence of market intervention and distortion of the minimum purchase price.
In the future, regarding the two reform paths, the above-mentioned experts believe that either one of the two reform paths must be chosen, or the two paths must be carried out in a coordinated manner and proceed simultaneously.

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