Issues and Recommendations on Supply-Side Structural Reform of Maize in China

The background of supply-side structural reform of maize in China to solve the problems caused by the temporary purchase and storage policy of maize. The eight years of the policy’s implementation leads to issues related to maize’s excessively temporary inventory, manifested as the significant increasement in numbers of its planting area, its output, it and its substitutes’ import have. The key concept of maize’s supply-side structural reform is to replace the previous policy with the “marketized acquisition with subsidy” in order to allow the market to be a more important role in the determination of maize’s producing, consuming and purchasing, which contributes to solve current issues. In the practice of the reform from 2016 to 2017, the influence is notable that the number of the planting area and output have decreased to a certain extent, and the government’s inventory has decreased accordingly. But there are still some concerns in the maize industry to be addressed, including balancing the interests in the short term and long term, reducing the effect of auction on inventory, balancing the relationship between the product price and planting income, reducing the potential negative effect of new processing capacity on the whole industry, taking other unfavorable factors into account, and considering the related enterprises’ lack of risk awareness. Given the above analysis, six suggestions are put forward by the author, including to design the policy on the basis of breaking the contradiction cycle, to ensure the market’s effective operation, to promote the marketization of maize price with full use of the tool of insurances and futures, to prudently implement maize processing projects, to improve farmer’s management ability, and to improve the enterprises’ risk management ability by perfecting market system