Keeping and Storing the Grains for You

Entering Granary in Heilongjiang Province - Diversification of Equities Facilitates the "Development and Blooming" of Warehouse Bases

When the spring arrives, the Great Northern Wilderness (Heilongjiang) is busy preparing for farming.

Recently, Li Qiu, a rice grower in the Xitonghe Management Zone of Raohe Farm under the Hongxinglong Administration Bureau in the Heilongjiang Agricultural Reclamation, goes to the seedling raising base every day for cleaning up accumulated snow and covering the greenhouse with plastic film. He said: "In the past, all the grains we grew could hardly be sold out even until March or April. They were piled up in the sunning ground or by the ditch to avoid going moldy in the hot temperature. Nowadays, upon threshing, the transport van will come for logistics. We're relieved now.”

Raohe Farm, located on the banks of the Ussuri River, is very remote and suffered from the inconvenient transportation. It was difficult to deliver the grains due to the rugged mountain roads. In the past three years, the farm has attracted 217 million yuan RMB in capital and built three storage bases with the capacity of 322,000 tons. Therefore, the difficulties in selling the grains have been solved.

According to Zhu Baohua, the director of Raohe Farm, "It is the equity diversification that allows us to obtain financing for the construction of storage bases and to manage grains soundly."

Thanks to equity diversification, Hongxinglong is capable of building 39 grain storage bases with the storage capacity of more than 3.44 million tons.

Reforming the Ownership Structure and Revitalizing the Investment Mechanism- Better Storing the Grain

In the "Jun'an Grain Storage Cooperative" on the 291 Farm, the fragrance of grain permeates.

According to Liu Baojiu, a member of the cooperative, there was no storage center in the farm in the past, so the cooperative had to wait and then sold the grains to Sinograin in Jixian County. At busy time, it could not deliver or sell even a cart of grains within a week, especially for those grains with higher water content. In order to prevent them from being rotten in the field or sunning ground, the grains had to be sold to food dealers at a low price. Now, farmers build grain processing plants through joint stock-holding partnership. As the grains can be stored and dried now, great trouble has been spared.

Hongxinglong is a state-owned enterprise with more than 7.2 million acres of arable land and a food production capacity of more than 4.3 million tons. However, as it used to be featured by "public ownership" and "state investment", it could only build 8 storage bases with the storage capacity of 490,200 tons. Its limited capacity could not meet the needs of the fast-growing grain productivity and the grain could not be well managed.

In response to these practical problems, Hongxinglong decided to break the shackles. It started to provide socialized services and instilled the vitality into the storage bases through equity diversification.How to realize equity diversification? How to achieve revitalization? Hongxinglong has its own solutions: under the unified construction standards, it has diversified funds and equity, and expanded the service scope in a planned and orderly manner. It has been dedicated to avoiding low-level repetitive construction, or the rival for the resources. According to the new mindset, it is clear that the storage base must be comprehensively constructed and drying, and storage must be realized simultaneously; Before the planning and construction of the base, the storage capacity must be declared. Therefore, Hongxinglong can rationally calculate the stock of the storage base based on the production.

In order to pragmatically improve the utilization of social funds, Hongxinglong has launched the policy of "four unrestricted aspects and four encouragements": no restrictions on investment ratio, financing forms, storage capacity and the number of major members; and mobilizing the construction through sole investment, joint-stock cooperation, stock-holding system and cooperatives.

Shuangyashan Farm was trapped in the shortage of resources and economic hardships, so it met great difficulties in seeking financing. Through diversification of equity, Beidahuang Grain Group has built a storage base with the storage capacity of 125,000 tons. Also, it has set up three storage bases with the capacity of 166,000 tons in the form of cooperatives. In this way, it ensures the sound management of grains in the farm and provides effective services to surrounding villages.

At present, Hongxinglong has set up 31 private storage bases with the storage capacity of more than 2.95 million tons. The years 2013 and 2014 have witnessed the rain season for two consecutive years. The rain lasted until October 1st. The drying device was operating for 24 hours. The warehouse was opened to ensure ventilation. 100% of the grains were stored before October 15th. No grains went moldy.

Fully Playing the Role of Storage as the Bank to Invigorate the Market Mechanism- Keeping and Increasing the Value of Grains

"Place the grains here, rest assured! After depositing the grains for more than three months, the price of grains has increased by 5 cents per jin (0.5 kilo), so I have earned over 30,000 yuan RMB more at a time." Jin Yongshun, a rice grower from the Eighth Management Zone in the Youyi Farm said hilariously upon receiving the payment for the grains of the previous year from "Dingxi" storage base.

According to Lv Hongjun, who is in charge of the "Dingxin" storage base, "Our storage base is a deposit bank for grains. We have the right to manage grains while storing the grains. The growers can deposit grains in our storage base and sell whenever they want. We'll pay for them based on the spot price.”

Hongxinglong has provided the storage base with the rights to manage grains. "Three market mechanisms" have been mobilized: 1) If both parties voluntarily agree, producers and operators will obtain the trading rights; 2) Under the prerequisite of unified management and distribution, storage bases will have the development and operation rights in the market; 3) Under the prerequisite that they shall provide better local services and successfully complete local projects, storage bases can expand their service scope.

After the mechanism has been revitalized, Shuangyashan base held by Beidahuang Grain Group and three storage bases jointly built with cooperatives have been integrated for the collective management. The annual grain transaction exceeds 400,000 tons, and the value of grains has been increased. The increase in annual income has exceeded ten million yuan RMB and the growers in Baoshan District, Shuangyashan City have their income growth of more than 3 million yuan.

Seven storage bases in Jiangchuan Farm, including Guangzhou Grain Group, have built a brand-sharing combination, established Jiangchuan Rice Industry Co., Ltd., and developed the rice brand of "Jiangchuan". "Jiangchuan" brand has been rated as a well-known trademark in Heilongjiang Province, propelling the production for 80,000 mu [1 mu = 0.076 ha.] of organic rice, and increasing 320 yuan RMB of income per mu for growers. The combination processes and transforms 468,000 tons of grains annually and has established 12 sales points nationwide.Nowadays, the storage base under the regulation of Hongxinglong manages and sells more than 1.3 million tons of grain on behalf of growers and has increased over 100 million yuan of income for growers.

The Integration of Warehousing and Logistics - Letting the Grains to be Transported Smoothly

During the Spring Festival, trains filled with grains depart from the industrial park of 597 Farm for Dalian Port.

According to Liu Yongming, director of the Bureau of Commerce in Hongxinglong, in order to improve the circulation capacity for the grains, Hongxinglong Administration Bureau has vigorously promoted the integration of warehousing and logistics. At the same time, it has encouraged the extension of railway and development of logistics platforms. Hongsheng Food Co., Ltd. has invested to extend the railway line into the industrial park and obtained the right to trade by river and sea. Hongsheng Food Co., Ltd. transports more than 1 million tons of grains each year.Hongxinglong encourages the storage base to utilize the logistics industry, grants the right to the logistic companies to operate business in the planned industrial park, and gives preferential policies of "four accesses and one leveling", that is, access to the roads, water, electricity, communications free of charge and leveling the site; Also, it dispatches personnel in charge of project construction to provide one-stop services on the spot. The local management department is responsible for the communication and coordination affairs.

Hongsheng Food Co., Ltd. in 597 Farm, begins to operate its business successfully, including the grain farming, acquisition, storage, and logistics and transportation, under the preferential policies and help from relevant authorities. Furthermore, it has established Hongfeng Specialized Cooperative for the Rice Growers and operated 1 million acres of land from 14,000 members. The company has established a total of 63 sheds, in-process warehouses for grain futures, central and temporary storage warehouses and supervised warehouses for structured trade. With the daily drying capacity of 3,000 tons and a total warehouse capacity of 1.5 million tons, it is the largest Chinese private enterprise for grain storage in terms of the capacity of a single warehouse. It enjoys the autonomy of trade, hence building a river-and-sea coordinated transport system and providing one-stop modern grain services for purchase, storage, processing, transportation, and sales.Hongxinglong has taken the advantage over the geological location of the agricultural reclamation area: it is located in the center of Sanjiang Plain. A grain storage and logistics center has been set up in the industrial park and enjoys the preferential treatment for the development of the provincial industrial park. Shuangyashan Park extends three railway lines into the industrial park through a joint-stock system, with an annual delivery capacity of more than 500,000 tons.

The integrated development of warehousing and logistics has greatly improved the grain circulation capacity. Currently, the whole region can transport more than 3 million tons of grain annually.

A Small Step in Technology Advancement, a Big Step in Grain Storage Level

"On one hand, we put large efforts in improving food production, on the other hand, however, the grain we harvest may be wasted because of the lack of warehouses or bad conditions. It's not right." said Yan Bo, the Director of Department of Policies and Regulations under the National Food and Strategic Reserves Administration. According to Director Yan Bo, China has been promoting new facilities, technologies and equipment to reduce grain losses. By promoting scientific grain reserve technology, the authorities distribute the latest grain storage equipment with instructions. Such efforts have been translated into good results.

To ensure food security for consumers, the advanced grain storage technologies are widely applied in grain storage of grain processing enterprises at all levels throughout China. The new technology has been effectively adopted for grain preservation, pest control and the prevention of growth of mold and mildew.

With the upgrading of grain storage technology, the quality of grain reserve in China has improved greatly. The "four-in-one" grain storage technologies-- mechanical ventilation, recirculation fumigation, grain cooling and grain inspection are widely adopted by grain reserves at all levels from central to local as well as food processing factories as it effectively prevents decline in grain quality. It is estimated that the use of "four-in-one" technology has resulted in the reduction in the loss of reserves from 4% down to under 1%, an increase in the deposit rate from 70% up to 99%, and an 80% reduction in the consumption of grain storage chemicals.

With the continuous advancement in grain storage technologies, the country's concept of grain storage is also evolving gradually toward eco-storage. Grain reserves at central and local governmental level as well as those owned by enterprises are promoting non-chemical pest control technology to lower the use of grain storage chemicals. China Grain Reserves applies technologies such as heat insulation, recirculation fumigation under film and slow-release ventilation in self-owned storages, proving to be effective and efficient.

A Stable Food Supply Depends on Good Grain Reserve

Recalling last year's grain purchasing season, carts and trucks transporting grains lined up in front of the grain storage. The farmers, despite the harvest, were not happy. For them, not only a lower grain price was disturbitng, but also the fact that grain had no place to reserve was upsetting. Some local grain storage facilities have limit capacity to store new harvests while in other places, the old grains are not consumed, let alone to store new grain ... Such cases expose the problems in grain storage system.

High crop yields are the cornerstone of national food security. However, if we fail in the process of grain warehousing, lose the food we harvest, it is very unlikely to secure our food supply.

At present, many grain storage facilities in China fall into disrepair for several years with limit storage capacity and few functions. It is difficult to consume old grain while the new harvests have no room to store. These problems affected the quality of grain either directly or indirectly, resulting in food losses that could have been avoided. On the face of it, these problems slow the speed of grain purchase and selling, lower the storage quality. But scratch deeper, it hurts the motivation of grain storage entities and farmers. For grain purchasers, without effective stimulus, grain purchasing, and warehousing become burden preventing them from accepting new harvests, and for farmers, they may be unwilling to grow grain if they cannot receive their payment and their grain cannot "move into" the warehouse.

Only when the grain is well reserved, can the food supply be self-sustained. Only when the grain storage facilities are significantly improved, can the food security be really secured with extra insurance.

It is necessary to attach equal importance to grain production and storage to avoid unnecessary loss of grain. Whether in the main grain production area or the consuming area, we must invest heavily in food storage infrastructure construction including retrofiting old facilities and enlarging storage capacity. Equipped with high-tech equipment, grain will be well kept under high quality storage conditions. It is also necessary to mobilize different forces in the society, such as formulating policies to revitalize the companies' self-owned warehouses and increase the storage capacity of commercial grain.

We are happy to see the smiling face of farmers who come in with grain loaded with happiness of harvest and left with money payment and satisfaction during harvest seasons.