The minimum purchase price policy provides a guarantee for food security

Farmers are the main force in grain production. Only by ensuring that farmers do not lose money and make a profit from growing grain can we stimulate their enthusiasm for farming. At present, the minimum purchase price policy for grain is still an important institutional arrangement to protect the interests of farmers and maintain national food security. It plays an important role in providing bottom support for market grain prices, stabilizing farmers' grain expectations, ensuring stable and increased production, and maintaining grain price stability.

As autumn harvest and planting are busy, the National Development and Reform Commission and other departments have issued a notice clarifying that the country will continue to implement the minimum purchase price policy in major wheat producing areas in 2024. The minimum purchase price for third class wheat produced in 2024 is 118 yuan per 50 kilograms. The release of this policy and the increase in the bottom price are conducive to stabilizing the expectations of grain farmers, mobilizing their enthusiasm for grain planting, stabilizing the wheat planting area, and laying a solid foundation for next year's high yield and harvest of summer grain.

Farmers are the main force in grain production. Only by ensuring that farmers do not lose money and make a profit from growing grain can we stimulate their enthusiasm for farming. The minimum purchase price of wheat is an institutional arrangement to ensure farmers' income from grain production, which forms a "three in one" agricultural policy system with agricultural subsidies and insurance. It plays a driving role in guiding farmers to plant reasonably, strengthening field management, and promoting stable and high-quality wheat production and efficiency improvement. With the minimum purchase price policy for wheat as a support, farmers will have enough confidence to stabilize and expand the wheat planting area, strengthen field management, and ensure stable and increased production next year.

According to the published price data, the minimum purchase price for wheat has been raised again this year. In fact, since 2021, the country has raised the minimum purchase price of wheat for four consecutive years, from 1.12 yuan per kilogram in 2020 to 1.13 yuan in 2021, 1.15 yuan in 2022, 1.17 yuan in 2023, and 1.18 yuan in 2024. After considering various factors such as the increase in grain production costs, the evolution of market supply and demand, and changes in domestic and international wheat price differences, the country raised the bottom price. Although the increase was not significant, it provided strong bottom support for the later operation of the wheat market.

The minimum purchase price for wheat is a "bottom line" price, not a market price. The government has slightly raised the price to make room for market price adjustments. With the establishment of a market-oriented mechanism for grain storage and procurement in China, wheat procurement has shifted from policy based procurement to market-oriented procurement as the main approach and policy based procurement as a supplement. The minimum purchase price for wheat has transitioned from "market support" to "bottom support". In recent years, with the high volatility of wheat prices and market prices far exceeding the minimum purchase price, China has not initiated a minimum purchase price for wheat for three consecutive years. However, the minimum purchase price is the "anchor" for stabilizing grain prices. During the summer grain purchase period, if the market price of wheat falls below the minimum purchase price, the government will activate the minimum purchase price to avoid the impact of price drops on farmers' grain income.

In addition to the minimum purchase price policy for wheat, China also implements the minimum purchase price policy for rice. Wheat and rice are the two major staple foods in China, and whether they can harvest well directly affects the stability of China's rice bowl. In history, the phenomenon of 'cheap grain harms farmers' has repeatedly occurred, leading to fluctuations in grain production and affecting national food security. In 2004, China fully opened up its grain market. In order to safeguard the interests of grain farmers and national food security, the government has continuously implemented the minimum purchase price policy for wheat and rice in the main production areas. It has been nearly 20 years since then, and although there have been adjustments during this period, they have remained true to their roots, protecting the interests of grain farmers to the greatest extent possible and making important contributions to ensuring national food security. Since 2004, there has been no significant fluctuation in China's grain production. The grain has been harvested year after year, with sufficient inventory, achieving basic self-sufficiency in grains and absolute food security. It effectively resists the impact of various uncertain factors such as extreme weather, epidemics, and regional conflicts on China's grain market, which is closely related to the implementation of the minimum protection price policy for grain.

At present, the minimum purchase price policy for grain is still an important institutional arrangement to protect the interests of farmers and maintain national food security. It plays an important role in providing bottom support for market grain prices, stabilizing farmers' grain expectations, ensuring stable and increased production, and maintaining grain price stability. Currently, China's food security is facing severe challenges from various factors such as high incidence of extreme weather and continuous regional conflicts. Maintaining the continuity and stability of the minimum purchase price policy for grain is of great significance. Relevant departments should implement and promote the policy of minimum wheat purchase price, fully leverage the effect of grain price support policies, mobilize farmers' enthusiasm for planting grain, and better ensure national food security, especially absolute food security.