State Monopoly on the Purchase and Sale of Grain

After the founding of New China, due to acute shortage of supply, the central government implemented the policy of acquisition and centralized sale of grain, cotton, oilseeds and some other commodities, which were urgently important for the national economy and people's livelihood. On October 10, 1953, an Emergency National Conference on Grain Work was urgently held in Beijing, and after discussions, it was decided to name grain requisitioning as "planned acquisition" and grain distribution should be named as "planned supply" or simply to say "unified purchase and sale" due to acute shortage of supply. Chen Yun said: requisition, the name itself is terrifying, what term we should use can be discussed. But it has indeed such nature; why do we propose to implement compulsory purchase? The basic reason is that our demand is increasing day by day, but the supply of grain is lacking.

At the beginning of New China, a new situation of economic construction emerged with the gradual recovery of national economy and the unification of national financial and economic work. In order to ensure the people's livelihood and satisfy the needs of national construction, and to combat the acts of restricting unscrupulous merchants to rush to buy and hoard cotton yarn, the state authorities promulgated a series regulations one after the other: the “Decision of the Financial and Economic Committee of the State Council of the Central People's Government on the Unified Purchase of Cotton Yarn” on January 4, 1951, and the “Decision of Unified Purchase and Marketing of Cotton, Oilseeds and Grain” on August 25, 1955; and on August 25, 1955, it was issued the “Interim Measures for Quantitative Supply of Grain in Towns and Interim Measures for Rural Grain Purchase and Sale”, which further institutionalized the policy of the unified purchase and marketing of grain. The main contents of the policy of unified purchase and marketing included the planned unified purchase and supply of grain by the state in respect to the following goods: oil, cotton, sugar, flue-cured tobacco and pigs.

The grain purchase and sale policy stipulated the following: (1) The planned purchase of grain (hereinafter referred to as "unified purchase") included purchase of surplus grain that were produced and owned by farmer households; (2) The planned supply of grain (hereinafter referred to as "unified marketing") referred to sell grain mainly to urban people and to rural households in need of grain; (3) The state should strictly control the grain market, strictly control the privately owned grain industry and commerce, and prohibit the free trade of grain by private merchants; (4) Under the unified management of the central government, the central and local departments should be responsible for grain purchase and sale management.

The producers should sell the products which were regulated within unified purchase to the commercial departments designated by the state according to the variety, quantity and price stipulated by the state and in accordance with laws and regulations, and no unit or individual should be allowed to interfere in this trade operation; and all commodities subject to unified marketing should be distributed and supplied by the commercial departments designated by the state to the urban residents and the units in need in a planned way according to the specified varieties, quantities and prices.

The implementation of the policy of unified purchase and sale effectively guaranteed the needs of the socialist construction in urban and rural areas, the basic means of livelihood of the broad masses of the people, the stability of prices and the people's will, and it was also conducive to the consolidation of the alliance of workers and peasants, and the socialist transformation of agriculture, handicraft industry and capitalist industry and commerce.

With the development of economy, the CPC government abolished the policy of unified purchasing of grain, cotton and other agricultural products in March 1985.