SCIO briefing on the 'No. 1 central document' in 2017
0 Comment(s)
Print
E-mail China.org.cn, February 6, 2017
China News Service:
Currently, Chinese peasants are paying close attention to reform of the system for purchasing and stockpiling corn. My questions are: What progress has been made so far? As to the future pricing mechanism for major agricultural products, what plan do we have? Thanks.
Tang Renjian:
The most important measure is to activate the market. Vice Premier Wang has called it the first tough battle. Han Jun has participated in research on this topic, so I'll ask him to answer your questions.
Han Jun:
Reform of the pricing mechanism for major agricultural products including grain as well as the system for their purchase and storage is a main highlight of deepening supply-side structural reform in agriculture. We should continue to lay equal stress on market orientation and the best interests of peasants, carry out various policies for different farm products, and promote reform gradually. In the past three years, we have introduced a range of measures and made some achievements in reform. For example, we abandoned the policy for the temporary purchase and storage of rapeseed, and carried out pilot reforms for guaranteeing base prices for cotton in Xinjiang, and for soybean in the three northeastern provinces and Inner Mongolia. According to the requirements of the "No. 1 central document," we will insist on improving the minimum purchase price policy on wheat and rice, which won't be changed in 2017.
Reform of the system for purchasing and stockpiling corn is the first tough battle of supply-side structural reform in agriculture. We have made the following breakthrough in reform. Firstly, we have activated the market. The corn market in northeastern provinces had been depressed in previous years. Last year, we transported a lot of grain from the north to the south, which put huge pressure on the railway system.
Secondly, we have enlivened the industrial chain. As the corn price fluctuates in line with market changes, price relations between the upstream and downstream sectors develop in an orderly way. During my research in the three northeastern provinces this year, I found that many corn processing enterprises had resumed work, and some of them had even enlarged their capacity.
Thirdly, we have improved competitiveness. Thanks to reform of the system for purchasing and stockpiling corn, the gap between the corn prices at home and abroad has become narrow. In January 2017, the domestic corn price was lower than the imported C.I.F dutiable price -- 50 yuan per ton, which means the price advantage of imported corn no longer exists. In 2016, the import of corn and its substitute goods fell 30 to 40 percent year-on-year.
Fourthly, we have promoted structural adjustment in agriculture. In previous years, many peasants preferred to plant corn instead of soybean because of high price. Recently, as the corn price returns to normal, the twisted agricultural resource allocation has gradually disappeared.
Fifthly, the fundamental interests of corn growers have been sustained. Market pricing and governmental grants are indispensable to the systematic reform of corn purchasing and storage. In accordance with the subsidy system, the central government has allocated 39 billion yuan (US$5.68 billion) in the three northeastern provinces and Inner Mongolia for dispensing among qualified farmers. The current market price and subsidies can ensure the farmers gain handsome rewards.
However, some farmers renting corn fields of massive size may find their operations becoming less profitable when considering the costs of labor and land lease prices. The land circulation in the northeastern region is at a level of 500 yuan for one mu (about 666 square meters), which can only bring in moderate, if not, negative returns. However, what we should note is that, the market, itself, will start to provide answers followed by the adjustment of governmental policies, so that leasing costs for transferred land usage starts to drop.
Changes in the purchase and storage system, market-oriented pricing and the separation of price and reimbursement are blazing a correct development path that suits actual conditions. We'll continue to make progress and keep vigilant to any risk signals. Thank you.
Go to Forum >>0 Comment(s)