Some Chinese soybean farmers have not been getting paid for their crop, according to an article in China Business Reference News that was reposted on numerous sites last week. According to investigations in Heilongjiang Province, bankrupt crushing plants have failed to pay traders who, in turn, were unable to pay for soybeans they purchased from farmers. Farmers say they call the traders over and over to collect on their IOUs, but the traders claim to have no money to pay or they just disappear.
The article says quite a few soybean farmers have been unpaid during the last two years. In many cases, traders from other provinces like Hebei and Henan contact farmer cooperatives in Heilongjiang to buy soybeans. They promise payment in 2 or 3 days and transport the soybeans to a warehouse in a coastal location. There, the soybeans are used as collateral to obtain loans. When those loans fall into arears, traders are unable to pay farmers on time. One farmer said he had been promised payment in 2 or 3 days but has been waiting for over a year to be paid for last year's soybeans. Some farmers contacted police for help, but police said they are not responsible for economic disputes.
One trader who acknowledges owing farmers 2 million yuan (about $285,000) said China's soybean market is a buyers' market, and money from buyers in distant provinces doesn't always arrive. He said the payment delays are common in the industry, due to "triangular debt" and bankruptcy of processors.
In November, China's Grain and Commodity Reserves Administration issued a circular on fall grain work that prohibited issuing IOUs to farmers, downgrading grain, and other practices that would harm farmers' interests.
The article says quite a few soybean farmers have been unpaid during the last two years. In many cases, traders from other provinces like Hebei and Henan contact farmer cooperatives in Heilongjiang to buy soybeans. They promise payment in 2 or 3 days and transport the soybeans to a warehouse in a coastal location. There, the soybeans are used as collateral to obtain loans. When those loans fall into arears, traders are unable to pay farmers on time. One farmer said he had been promised payment in 2 or 3 days but has been waiting for over a year to be paid for last year's soybeans. Some farmers contacted police for help, but police said they are not responsible for economic disputes.
One trader who acknowledges owing farmers 2 million yuan (about $285,000) said China's soybean market is a buyers' market, and money from buyers in distant provinces doesn't always arrive. He said the payment delays are common in the industry, due to "triangular debt" and bankruptcy of processors.
In November, China's Grain and Commodity Reserves Administration issued a circular on fall grain work that prohibited issuing IOUs to farmers, downgrading grain, and other practices that would harm farmers' interests.
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