Ensuring Farmers Can Sell Grain While Keeping Prices at Reasonable Levels

Deep News
09/21

At a press conference held on September 21, the State Council Information Office addressed strategies for safeguarding the nation's grain reserves and securing food security. Liu Huanxin, a member of the Party Leadership Group of the National Development and Reform Commission and head of the National Food and Strategic Reserves Administration, highlighted that grain procurement directly impacts the welfare of farmers as well as consumers, making it a matter of significant public concern.

The overarching principle for organizing large-scale purchases is to balance market-oriented approaches with the protection of farmers' interests, integrating the efficiency of market mechanisms with effective government intervention. By coordinating market-based purchases with policy-based reserves, the goal is to maintain smooth grain sales channels and uphold the guarantee that farmers can always sell their harvest. This approach also aims to keep grain prices within a stable and reasonable range.

Looking ahead to the "15th Five-Year Plan" period, grain purchasing will primarily rely on four key channels. The first and most important channel involves diversified market entities purchasing grain independently. Tens of thousands of grain enterprises form the core force for these acquisitions, determining prices based on their own operations and procuring through market-based methods. This channel accounts for over 90% of total grain purchases, with its success depending on maximizing the role of these diverse players in boosting trade and circulation.

The second pathway leverages the leadership of major enterprises to drive purchasing activities. Central grain-related corporations and key regional companies bring significant strengths in storage capacity, funding, staffing, and supply chains. Their operations often set the pace for smaller players, positioning them as frontrunners in grain procurement. Engaging these major entities to amplify their exemplary and demonstrative influence is a central focus of the purchasing process.

The third pathway centers on government reserve enterprises replenishing their stockpiles. Governments at various levels maintain grain reserves through these companies, which operate regular rotation mechanisms to purchase new harvests, typically during peak collection periods. The core objective here is to harness government reserves as a tool for stabilizing market conditions and balancing supply and demand.

The fourth pathway involves implementing minimum purchase price policies to protect the market, which serve as a safety net for farmers. For wheat and rice, these policies have been actively used for over two decades, playing a vital role in securing farmers' income. Storage facilities are strategically deployed across provinces covered by these policies, and when market prices dip below set thresholds, emergency support buying is promptly activated. This pathway emphasizes the importance of executing minimum purchase price policies to stabilize expectations and provide a robust safety net.

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