China to eliminate open air grains storage to cut losses

04.11.2016
China will eliminate more than 95 percent of its open air grains storage by 2020, according to a government document, as it seeks to clamp down on waste and modernize its agriculture sector.
 
Top grains grower China produced 621 million tonnes of crops last year but by some estimates as much as 100 million tonnes may be stored outdoors, leading to losses that threaten the nation’s food security.
 
Beijing wants to “optimize the grain storage capacity” and “improve the modern grain logistics system and efficiency,” said the 13th five-year plan for the grain industry, published on the website of China’s State Grain Administration on Wednesday.
 
The target is easy to achieve, said Ma Wenfeng, an analyst at Beijing Orient Agri-business Consultant Co Ltd, as the volume of grain needing storage is set to fall following this year’s reform of the country’s stockpiling system.
 
“Farmers hopefully will grow less,” said Ma, as prices fall closer to global levels and are no longer set by the government.
 
China added 82.5 million tonnes of grain storage capacity between 2011 and 2015, more than 300 percent above government targets, said the document, as the former stockpiling policy encouraged farmers to plant more grain than was needed.
 
For the next five years, Beijing will maintain its grain storage capacity at a “reasonable” level, added the document, without adding a specific target.
 
The document also urged state-owned grain enterprises to form large-scale conglomerates and expand overseas. By 2020, it wants to have a “considerable number” of major grain enterprises among the global leaders.
 
State-owned agriculture trader COFCO has pioneered the push overseas, investing over $3 billion to buy Noble Group’s agribusiness and recently taking full ownership of Dutch grain trader Nidera.
 
“The government should also encourage private enterprises and apply the same policies to support them,” added Ma.
 

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