China Works On Grain Pricing Reform

China, prominent importer and exporter of grain, discussing some measures to reform the country’s minimum procurement price system by making it more flexible and letting the market play a more decisive role in the pricing of grain.

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China’s political advisors met on the 16th of November to discuss ways to reform the country’s grain pricing system. The bi-weekly consultation session was chaired by Yu Zhengsheng, chairman of the National Committee of the Chinese People’s Political Consultative Conference, reported Xinhua. Political advisors said grain security is an issue of strategic importance. China has achieved steady growth in grain production in recent years and its food security has been effectively safeguarded. However, the current grain pricing and storage policies must be improved to address many problems, such as the weakened role of the market, a large inventory build-up, and high fiscal burdens. The advisors put forward proposals including measures to reform the country’s minimum procurement price system by making it more flexible and letting the market play a more decisive role in the pricing of grain, stated Xinhua. Measures should also be taken to improve ways to subsidize the grain growers in order to prevent a drop in their income, they suggested, while saying reforms should also be conducted on grain procurement and storage enterprises.
China has cut its minimum purchase price for the grain for 2018 to help whittle its mammoth stockpiles and adjust to the market in October, the first time a downward revision was made since the policy began in 2006. As the world’s one of the leading importer and exporter of grain, China influences the world grain market in many ways even with its policy of grain self-sufficiency.

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