New National Policy Boosts Grain and Oil Processing Industry Development

Published: August 8, 2023Category: Policy Analysis

Policy Background

On August 1, 2023, China's Ministry of Agriculture and Rural Affairs, together with six other ministries, jointly released the "Guidelines for High-Quality Development of Grain and Oil Processing Industry (2023-2025)." This comprehensive policy framework represents the most significant government support for the sector in the past decade, with total investment of 45 billion yuan ($6.5 billion) allocated over three years.

The policy addresses critical challenges facing the industry including outdated processing capacity, quality control issues, environmental concerns, and international competitiveness. It aims to transform China from a large grain and oil producer to a high-quality processing powerhouse by 2025.

Policy Objectives

Short-term Goals (2023-2024)

• Capacity upgrade: Modernize 30% of existing processing capacity
• Quality improvement: Reduce processing losses by 15%
• Technology adoption: Install advanced processing equipment in 500 facilities
• Environmental compliance: Achieve 90% compliance with new environmental standards

Medium-term Goals (2024-2025)

• Industry consolidation: Reduce number of small-scale processors by 25%
• Value addition: Increase value-added products by 35%
• Export growth: Double export value of processed products
• Technology leadership: Establish 10 internationally competitive enterprises

Long-term Vision (2025+)

• Global leadership: Become top 3 globally in processing technology
• Quality standards: Establish international quality standards leadership
• Sustainability: Achieve carbon neutrality in processing operations
• Innovation hub: Create global innovation center for grain and oil processing

Key Focus Areas

Technological Innovation

• Smart manufacturing: Subsidies for IoT and AI integration (30% of investment)
• Equipment upgrades: 40% subsidies for advanced processing equipment
• R&D support: Tax credits up to 200% for qualifying R&D expenses
• Patent incentives: Additional 50,000 yuan per international patent

Quality Assurance Systems

• Traceability systems: Full funding for blockchain-based traceability
• Testing equipment: 50% subsidies for advanced quality testing equipment
• Certification support: Full reimbursement for ISO 22000, HACCP certifications
• Standard development: Participation in international standard development

Environmental Protection

• Green manufacturing: 35% subsidies for energy-efficient equipment
• Waste management: Zero-interest loans for waste treatment facilities
• Circular economy: 40% subsidies for by-product utilization systems
• Carbon credits: Trading platform for carbon credit monetization

Industrial Integration

• Vertical integration: 25% subsidies for supply chain integration projects
• Cluster development: Infrastructure support for industrial clusters
• Logistics optimization: 30% subsidies for cold chain and logistics systems
• E-commerce platforms: Support for B2B platform development

Support Policies

Financial Support

• Low-interest loans: 2% interest rate for qualifying projects (vs. 6% commercial)
• Equipment financing: 100% financing for imported advanced equipment
• Working capital: Enhanced credit lines for raw material procurement
• Export financing: 1.5% export credit insurance premium subsidies

Tax Incentives

• Corporate tax: Reduced to 15% for qualifying enterprises (vs. 25% standard)
• Import duties: Zero tariffs on advanced processing equipment
• VAT rebates: Enhanced VAT rebates for export products
• Technology transfer: Tax exemptions for technology transfer income

Land and Infrastructure

• Land allocation: Priority allocation of industrial land at preferential rates
• Infrastructure: Government investment in supporting infrastructure
• Utilities: Subsidized utilities for qualifying enterprises
• Transportation: Dedicated logistics corridors for grain and oil products

Talent Development

• Training programs: Government-funded training for 50,000 technicians
• University partnerships: Joint programs with leading universities
• Expert recruitment: Special visas and incentives for international experts
• Innovation teams: Funding for research team development

Technology Development Direction

Advanced Processing Technologies

• Cold pressing technology: Support for premium oil extraction
• Supercritical extraction: Funding for advanced extraction methods
• Membrane separation: Investment in precision separation technologies
• Enzymatic processing: Support for biotechnology applications

Digital Transformation

• Industry 4.0: Complete digital transformation support
• Artificial intelligence: AI applications in quality control and optimization
• Blockchain: Full traceability and transparency systems
• IoT integration: Smart sensors and monitoring systems

Quality Control Systems

• Real-time monitoring: Continuous quality parameter monitoring
• Predictive analytics: AI-driven quality prediction and control
• Automated testing: Robotic quality testing systems
• Laboratory networks: National quality testing network establishment

Sustainable Technologies

• Zero-waste processing: Complete utilization of raw materials
• Energy recovery: Advanced energy recovery and reuse systems
• Water conservation: Closed-loop water recycling systems
• Biodegradable packaging: Sustainable packaging solutions

Industry Impact Analysis

Market Structure Changes

• Consolidation acceleration: Smaller players will exit or merge
• Technology gap: Widening gap between technology leaders and followers
• Export competitiveness: Significant improvement in international competitiveness
• Value chain evolution: Shift toward higher-value products and services

Investment Patterns

• Foreign investment: Increased foreign direct investment expected
• Private investment: Surge in private sector investment
• State investment: Strategic state-owned enterprise participation
• Joint ventures: International joint venture opportunities expanding

Employment Effects

• Direct employment: Creation of 150,000 new direct jobs
• Indirect employment: Estimated 500,000 indirect jobs in supply chain
• Skill upgrading: Massive skill development programs
• Regional development: Balanced regional development through cluster formation

Technology Spillovers

• Upstream effects: Technology transfer to agricultural sector
• Downstream effects: Enhanced food processing capabilities
• Cross-industry: Technology applications in other processing industries
• Innovation ecosystem: Comprehensive innovation ecosystem development

Enterprise Response Strategies

Immediate Actions (2023)

• Policy application: Submit applications for all applicable subsidies
• Technology audit: Comprehensive assessment of current technology levels
• Strategic planning: Develop 3-year strategic response plan
• Team building: Establish dedicated policy response teams

Medium-term Investments (2023-2024)

• Equipment upgrades: Prioritize high-impact equipment investments
• System integration: Implement comprehensive quality and traceability systems
• Certification: Obtain all relevant quality and environmental certifications
• Partnership: Establish strategic partnerships for technology and market access

Long-term Positioning (2024-2025)

• Market leadership: Position for market leadership in premium segments
• Export expansion: Develop comprehensive export market strategies
• Innovation focus: Establish sustainable competitive advantages through innovation
• Global expansion: Prepare for international market expansion

Shengshi Hecheng Response Plan

Our Strategic Response

As a leading oil press equipment manufacturer, Shengshi Hecheng has developed a comprehensive response strategy aligned with the new policy framework:

Technology Investment Program

• R&D expansion: 50% increase in R&D investment over 3 years
• Smart manufacturing: Complete IoT and AI integration in new equipment
• Quality systems: Implementation of blockchain-based traceability systems
• Green manufacturing: Development of energy-efficient and environmentally friendly equipment

Customer Support Initiative

• Policy guidance: Free consultation service for policy application
• Equipment financing: Partnership with banks for preferential equipment financing
• Technology transfer: Knowledge sharing and technology transfer programs
• Training programs: Comprehensive training programs for customer technical teams

Market Development Strategy

• Export support: Special programs for international market development
• Cluster participation: Active participation in government-planned industrial clusters
• Innovation partnerships: Joint development programs with customers and research institutes
• Service network: Expansion of service network to support policy implementation

Support Services Available

• Policy consultation: Free initial consultation on policy opportunities
• Application assistance: Complete support for subsidy applications
• Technical evaluation: Comprehensive technology assessment and upgrade planning
• Financing arrangement: Partnership with financial institutions for optimal financing solutions

Contact for Policy Support

For detailed guidance on leveraging these new policy opportunities, please contact our policy support team:

• Phone: +86 199 0636 5856
• Email: policy@shengshihecheng.com
• Consultation: Free initial consultation available
• Full service: Complete support from application to implementation

We have established a dedicated policy response team to help our customers maximize benefits from these new opportunities.