In another sign that Chinese officials are eager to keep farmers happy during a year of low crop prices, the Agricultural Development Bank of China (ADBC) pledged to increase financing for purchase of summer grains. ADBC allocated 150 billion yuan (over $20 billion) to fund purchase of this year's winter wheat, rapeseed, and the early-season rice crop, an increase of 40 billion yuan (about $5.5 billion) from last year. The announcement was made at the ADBC's June 13 meeting to launch financing of summer grain procurement.
The ADBC is the Chinese government's rural policy bank that finances procurement of commodities for government reserves and other rural policies, viewed as a backstop to stabilize markets. The bank's most recent public report for 2023 said ADBC financed more than half of grain that year with funds totaling 323.7 billion yuan issued by the bank. The 2023 report also showed a 70-percent increase in nonperforming loans that year. As of June 2025 the ADBC has not issued an annual report for 2024. Yesterday, the ADBC issued 14 billion yuan (nearly $2 billion) in bonds to fund its operations.
The increase in the bank's credit funding is meant to prop up markets for summer-harvested crops. China's wheat and early-rice procurement prices in the first week of June are down about 4 percent from a year ago and the average rapeseed price is down 2 percent from a year ago, based on prices reported by China's National Food and Commodity Reserves Administration.
Earlier this month China's grain reserve corporation announced procurement of wheat at minimum prices in Henan Province. ADBC funds will finance these purchases. Early rice procurement at minimum price is also possible this summer (the average price is currently close to the minimum set for 2025), but rapeseed is not covered by a minimum price program. Chinese authorities maintain reserves of early rice, wheat, and rapeseed oil that are rotated year by year.
The ADBC's meeting held in Nanjing included the headquarters deputy director and officials from branches in summer grain-producing provinces. Officials were told that they must take the initiative in credit for summer grain purchases to ensure that farmers can sell their grain smoothly and to ensure market stability. The priority is to ensure funding for replenishing grain reserves and buying grain at minimum prices without cutting into private sector grain procurement. Officials said they would work with local authorities to address the problem of substandard grain procurement.
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