Wednesday, February 26, 2020

China Rice Procurement Ordered to Resume

Chinese officials have ordered state-owned companies to resume purchase of rice from farmers in northeastern provinces as they juggle the priorities of coronavirus prevention and forestalling a rice-marketing disaster.

Sinograin, the Chinese government's grain reserve corporation, says purchase of rice is about 20 days behind schedule in the northeastern provinces due to the coronavirus epidemic. Sinograin promises to place no limit on buying rice that meets quality standards. Sinograin's Heilongjiang branch says it has opened 12 purchasing points, and others have been directed to reopen soon. The risk of unsold rice molding and sprouting rises as the weather warms, and farmers need cash to plant new crops in the spring.

China's National Administration of Grain and Commodity Reserves issued a notice yesterday extending the season for purchasing rice at minimum prices in northeastern provinces to March 31, 2020 to ensure farmers are able to sell the crop they harvested last fall. The circular directs Sinograin to play its leading role as the main buyer of rice at minimum prices, improve services to farmers, and ensure there are plenty of purchasing points for rice. The document is also addressed to other state-owned companies who are instructed to act as models in buying rice: COFCO; Supply and Marketing Cooperatives; Dabeihuang and the Heilongjiang State Farm Bureau; and Sinochem, the state-owned chemical and seed giant.

The circular orders provincial and local government officials to take their provincial food security responsibility seriously while also carrying out their coronavirus prevention duties. They are commanded to launch purchases of grain for provincial and local reserves and to stick to the bottom line of ensuring that "farmers who plant grain can sell it." Local authorities are instructed to "support and guide" enterprises to buy grain. Grain must be added to the list of necessities tagged by the State Council for resuming business and production during the coronavirus crisis.

Sinograin says it has launched services to help farmers sell their grain more conveniently and to avoid waiting in long lines of trucks at warehouses. These include sales arrangements between villages and warehouses, a cellphone app farmers can use to make an appointment at the warehouse, and T.V. announcements and text messages that publicize locations of warehouses. A Wechat promo distributes standards for rice color, smell, and brokens to farmers to help them avoid wasted trips hauling rice that fails to meet quality standards. Grain depots have waiting rooms, cafeterias, and offices. Facilities check the temperature of visitors and workers, require masks, and are disinfected (probably to ease farmers' fears of infection from visiting the grain depot).

Neither the notice nor the Sinograin publicity mention that parts of Heilongjiang had an unusually poor-quality rice crop this year, and the region's rice market seized up as local mills purchased cheaper rice from southern provinces.

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