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1. Project Summary and Relationship to China's Agenda 21

This project seeks to enhance the safety and efficiency of grain distribution. By establishing the information system for national grain distribution, the project will modernise bulk processing of grain, which includes packing, distribution, storage, and transportation. The project will improve grain distribution, management, allocation and transportation. In addition, the system will guarantee grain is distributed in a rational, orderly and efficient manner and is stored safely. The project will ensure the sustainable development of grain distribution, demand and supply of grain market.

This project is based on programme areas of 11B and 7C of China's Agenda 21, and is related to programme areas of 3A, 4B, 4C and 12D.

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2. Background

At present, post-production loss of grain is 12-14.8% of total grain output in China. If one third of the loss is retrieved, it can satisfy the grain consumption of ten million people for five years. The retrieval can be considered as millions of invisible croplands, thereby saving enormous resources and agricultural investment.

One of the causes of the loss is the delay of grain information on the grain marketís supply and demand and on control and regulation of grain storage. It is believed that the delay is one of the key factors of inflation. Such delays are caused by the lack of a uniform Information System of Grain Distribution for national, local and regional grain storage and wholesale market. Currently, information systems are developed repeatedly, disparately, separately and at a low level. They provide little information because they are not scientific and standardised. Furthermore, these systems provide insufficient assistance in decision making. The scattered networks have hindered the provision of accurate information and analysis on grain prices and the marketís supply and demand.

Developed countries such as Australia, France and Canada have developed grain storage information system such as Expert Consultation System, Early Prediction System of Insect Infestation and Simulation of Ecosystem for Grain Storage, and Monitoring System of Grain Safety Storage. They have also developed comprehensive prevention and control techniques for grain pest for various ecological zones. These experiences are stored within the information system and can solve more than five hundred questions from farmers on grain storage. These information systems are important in retrieving the loss in both grain quantity and quality.

At present, China produces 450 million tons of grain annually, with 33% of it in distribution. With the huge distribution system, less than 30% of the total grain are stored and only 10% of distributed grain is mass-processed. If the mass processing of grain is increased to 20%, the efficiency would be doubled, 1.8 million tons of the loss in grain can be recovered and can save RMB 300 million to 500 million in material, packaging and transportation cost. Furthermore, the processing and distribution facilities are far behind international level. Many countries, such as Australia, US, France and Canada, have all adopted the distribution techniques of bulk processing since the '70s. This project aims to deal with the above difficulties in order to give impetus to establishing an efficient system for national grain distribution.

The grain distribution problem has become a priority at various levels of government. It has been incorporated into the Ninth Five-Year Plan for Commodity Distribution and the Long-term Targets for the Year 2010 of Ministry of Domestic Trade. The techniques of grain distribution has become one of research items carried out by grain experts organised by the Ministry of Internal Trade and State Grain Storage Bureau.

Relevant agencies have gained enormous experience after fifteen years of research in grain storage, collection and analysis of grain information, and grain distribution directed by the Ministry of Domestic Trade. The government will formulate China's Grain Law, a strategy in development of grain distribution, and regulations in related technology and equipment during the 1996-2000. The experience and the documents mentioned above would help the Ministry of Domestic Trade and the State Grain Bureau to finish this project. The two agencies are organising corresponding personnel, material, and techniques for this project.

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3. Objectives

3.1 Long-term Objective

The project aims to establish an Information System for Grain Distribution, which could provide up-to-date grain information on supply and demand. This information can provide a reference for production and consumption of grain. The project will develop, implement and promote modern grain distribution techniques. In addition, the project aims to enhance the managing ability and technology knowledge of relevant personnel.

3.2 Immediate Objectives

• To establish an information network of grain storage. The network will collect and analyse information on grain markets, and update the changes in storage, transportation and sales. The system will self-adjust according to the changes.
• To establish mass processing distribution and to demonstrate specific techniques of chain allocation and transportation. This would apply new technology in electronics and mechanics in grain distribution.
• To train relevant managers and technicians in advanced technology of grain distribution. This will enhance their qualifications and productivity.

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4. Outputs and Activities

4.1 Establishing a national information system for grain storage

• To establish a subsystem for monitoring information of grain markets. The work involves the development of an information system on the demand and supply situation at the national, local, and regional grain wholesale market levels. The system will optimise scheduling policy decisions for grain storage according to the conditions of demand and supply, storage, geographical position, routes and reserves.
• To develop a subsystem for expert consultation on grain storage safety. The system involve the establishment of an image-recognition computer system for various kinds of insects. The system will determine comprehensive techniques in prevention and control of insect infestation by putting timely control of mechanical ventilation, aeration and chemical pesticides into practice.
• To establish a subsystem for monitoring of grain safety in storage. The item involve introducing and developing several kinds of sensors which can monitor various key factors such as moisture, insects and gas (including CO2, O2, pH) which play an important role during grain storage. The system can operate real-time or at random.
• To carry out computer remote management on a basis of 2000 storehouses, 100 transportation enterprises and 50 wholesale and stock markets of grain in the network.

Monitoring Indicators: systems design and implementation of the Information System for Grain Distribution; 5 types of sensors for monitoring grain storage safety.

Implementing Agencies: Ministry of Domestic Trade and State Grain Storage Bureau.

Time Schedule: January 1997 - December 1998

4.2 Establishing demonstration engineering of mass processing distribution

• To develop distribution techniques and equipment for bulk grain, which include distributing through train, truck and inland shipping. The item also aims to develop safety explosion-proof technology and equipment, and a multi-media monitoring control and data scattering system (SCADA).
• To develop quick sampling devices and instruments for monitoring grain quality. The project also intends to formulate a set of detection method.
• To promote and employ new technology during grain storage, such as storage at low temperature, cooling and dehumidification by secondary mechanical ventilation and killing insects by chemical or biological method.

Monitoring Indicators: accomplishing two demonstration projects. The loss of grain distribution will be decreased by 2 percent within project areas. Ten different types of discharging devices (below 300t/hr) for bulk grain and fifteen kinds of detecting instruments for grain quality will be developed with an increase of bulk processing rate by 20 percent within demonstration areas.

Implementing Agencies: grain Bureau of Jiangsu province and Grain Bureau of Henan province.

Time Schedule: January 1997 - December 1999

4.3 Establishing a demonstration centre for wholesale grain sales, with chain management in allocation and transportation. .

• To introduce new technology in grain information systems such as: POS, EOS, EDI, management IS and bar code in 100 selected enterprise in Beijing and Zhengzhou respectively.
• To establish grain distribution centres in Beijing and Zhengzhou, which mainly deal with grain and oil, but which handle 3,000 other types of commodities as well.
• To establish a specialised kitchen in Beijing for several production lines such as steam bread (3t/d), fresh noodles (5t/d) and frozen foods (10t/d).

Monitoring Indicators: a computer system will be installed to meet the demands of retail chain operations in grain trade and which will be connected to 200 chain stores; build two mating centres of grain and oil; develop three production lines for specialised kitchen.

Implementing Agencies: Municipal Grain Bureau of Beijing and Municipal Grain Bureau of Zhengzhou.

Time Schedule: January 1997 - December 1999

4.4 Training engineering management staff and technical workers with new technology of grain distribution

• To formulate a training plan and organise compilation of manuals for technical training. The manuals include details in Information System for Grain Distribution, Insect Prevention and Control During Grain Storage and Control of Quality Standards and Inspection Methods.
• To establish training centres for grain distribution. The centres will be used to train management staff with engineering technique as well as technical workers with necessary fundamental knowledge in project areas. The training will be in either lecture or audio-visual teaching. The item also aims to develop feed-back network information and technology.
• To generate a database for grain distribution technology at home and abroad. The project will train tutors in the theory of grain distribution, which includes patterns and structure of trade, radiation strength, regulation of commodity classification, and technological development for distribution. Lastly, it will evaluate effectiveness of the transfer of responsibility for decisions from foreign experts to national personnel.

Monitoring Indicators: a training program, 6 vocational training manuals and a database for distribution technology; 50 trainers and 500 technical staff trained on grain storage techniques.

Implementing Agency: Zhengzhou Grain College

Time Schedule: January 1997 - December 1999

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5. Inputs

5.1 Chinese Inputs

Chinese inputs will be used for expenses on prior preparation, investigation and research, travelling expenses for national experts and other corresponding personnel, expenses for testing and trial operation and management and office facilities for its staff.

5.2 International Inputs

International inputs will be used for consulting foreign experts, part of basic construction, key devices and instruments, introduction of technique and staff training.

5.3 Budget

The total capital needed for this project is US$ 13.2 million. The Chinese participants will raise US$ 6.8 million from domestic source, while foreign aid and investment will cover the other US$ 6.4 million.

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Table 1. Budget by Item (in million US dollars)

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Table 2. Budget by Output (in million US dollars)

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6. Benefits

The implementation of the project will improve grain distribution, stabilise grain prices and provide for rational grain distribution in China. The system will assist regions in satisfying their varying supplies and demands in various grains. In addition, it will enhance the efficiency of grain distribution, market operation, storage as well as exports and imports of grain. It will decrease the loss in grain distribution to less than 5 percent and save 2 percent of packaging costs. Producers will obtain profits in the long-run and the consumers will enjoy a guaranteed supply of grains at a reasonable prices.

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7. Risks

Because the Information System of Grain Distribution is a huge network, the implementation of this project requires a large number of technical staff. Furthermore, because the demonstration projects on mass processing for grain distribution are numerous while the mechanisms and instruments of China are lagging, the implementation requires agencies with strong organising ability. Therefore, the implementation agencies should introduce foreign advanced techniques and equipment and train engineering technicians on the basis of international cooperation. Experience with this project will provide a basis for follow-up development and promotion. Agencies in charge must establish a multi-channel fund-raising system to overcome the shortage of funds, and especially to win over the support of international organisations and business circles at home and abroad, and to strive for successful implementation as scheduled.

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