Grain Gain
Comments Off on Grain Gain

Grain Gain

Posted by | November 26, 2014 |

In order to boost and protect its grain reserves, China has embarked on a program of upgrading its storage facilities and equipment. The new facilities are also improving working conditions, but some experts say that more still needs to be done.

On a sunny winter afternoon in a small county in northern China, Zhang Wenlong opened the door of a grain storehouse filled with wheat, and a gust of cold air came out.

Zhang, manager of the State Grain Depot in Qingyuan county in North China’s Hebei Province, took off his shoes and walked cautiously onto the wheat, which was covered with plastic film, to measure the wheat’s humidity and temperature.

“It has become easier to store the grain since we applied advanced new storage technologies,” said Zhang, who has been working at Qingyuan State Grain Depot for 10 years.

The Qingyuan depot was among the first batch of State grain depots to start using the new storage technologies, including ventilation and insecticide practices.

“Our working environment has also been improved,” Zhang noted.

Previously, the storekeepers would feel choked by dust when they transported grain into the warehouses, but now the grain can be moved directly into the warehouses by farm vehicles, according to Zhang.

Construction of the Qingyuan State Grain Depot started in 2000, and it now has 22 warehouses with a total storage capacity of 120,000 tons. It was one of a batch of State grain depots built after the central government decided to increase grain reserves in 1998.

To increase State grain reserves and deal with the Asian financial crisis at the end of the 1990s, the State Council, the country’s cabinet, released a notice in 1998 calling for construction of more grain depots. Since then, the State grain reserve has also played an important role in increasing farmers’ income.

When grain prices are low, the State reserve depots normally buy grain from farmers at prices that are higher than wholesale prices on the market, so as to ensure that farmers make a reasonable income. When grain prices rise, the State reserve depots are required to release grain into the market to stabilize the prices.

Given the growing amount of State reserves, there is an “urgent need to upgrade the facilities and management of the State grain depots to ensure the quality of grain,” Cao Yang, a professor at the Academy of the State Administration of Grain, told the Global Times Monday.

Improving security

According to a statement released by the State Administration of Grain (SAG) in October, total grain losses during the process of storage, transportation and processing in China have reached 35 million tons a year.

To reduce grain losses during storage, China will have more than 8 million items of grain storage equipment in 26 provinces by the end of 2014, the SAG said.

This equipment will help reduce grain losses by 900,000 tons and increase the income of farmers by 2 billion yuan ($326 million) each year in China, the SAG said.

“Maintaining low temperatures and good ventilation measures, as well as green and safe insecticidal methods, are necessary factors to ensure grain security,” Cao noted.

The storage period for wheat in State grain depots is four years, while the period for corn is two years.

“During this period, any carelessness can cause huge losses,” said Cao.

Accidents have happened in the past. A large grain storage center in Northeast China’s Heilongjiang Province caught fire in May 2013, and the fire damaged 78 barns that had total grain reserves of 47,000 tons, according to the Xinhua News Agency.

More spending needed

Cao said the central government should spend more on storage technology innovations.

“Government expenditure on storage technologies each year is less than 5 percent of the total spending on technological innovation in the agriculture sector,” Cao noted.

Generally, it costs around 4 million to 5 million yuan to upgrade and replace the old equipment and facilities at grain warehouses capable of storing 100,000 tons of grain, Ji Zhenjiang, director of Qingyuan State Grain Depot, told the Global Times Monday.

Ji said investment in technology will bring long-term profits for the depot.

To ensure its grain reserves, China will build a new batch of grain storage warehouses with a total storage capacity of 50 million tons, the SAG said Sunday.

Stricter regulations

In addition to technological innovation, Cao said stricter regulations for grain dealers are also needed to ensure grain security.

Normally in China, farmers don’t sell grain to the State grain depots, mainly because the fees they need to pay for transporting the grain squeeze their profit margins.

Sometimes they sell it to grain dealers instead, who then sell the grain to the State grain depots.

“Most of the grain in our State grain depots is purchased from the grain dealers rather than the farmers, who are eager to go to the cities to find work after harvest time,” Ji noted.

This process has some safety concerns because of a lack of regulations for the grain dealers, who sometimes add dangerous pesticide into the grain to keep pests at bay, said Cao.

Also, to increase the weight of the grain and make more profits, the dealers sometimes add straw or water to it, which then causes problems when storing the grain, Ji said.

“It always takes a long time for our storekeepers to clean up the grain,” Ji noted.

However, Zhang at Qingyuan State Grain Depot believes that things have improved a lot. It used to be hard to prevent grain from been destroyed by pests, but it is easier to protect the grain now and his working environment is also better thanks to the more modern facilities, he said.

Michael Boddington from Asian Agribusiness Recruitment Training Development (AARTD) has been involved in agribusiness in Asia since 2000. AARTD has office both in Vietnam Ho Chi Minh City and China Beijing. So AARTD has a thorough understanding of the Vietnam and China agribusiness industry and produces up-to-date research reports on the market. We can offer insights on supply and demand trends and comments on the future structure of Asian agribusiness. If you would like to know more please email: