No. 53

Procedures of Shanghai Municipality on the Management of Local Grain Reserve Security were adopted at the 134th Routine Meeting of the Municipal People’s Government on July 26, 2021 and are hereby promulgated. They shall be effective as of September 1, 2021.

Mayor Gong Zheng

July 29, 2021

Procedures of Shanghai Municipality on the Management of

Local Grain Reserve Security

(Promulgated by Decree No. 53 of Shanghai Municipal People’s Government on July 29, 2021)

Chapter I  General Provisions

Article 1 (Purpose and Basis)

With a view to strengthen the management of local grain reserve in this Municipality, ensuring that the quantity is true, the quality is good, the storage is standardized, and the grain security is guaranteed, these Procedures are formulated in accordance with the relevant laws and rules and in the light of the actual circumstances of this Municipality.

Article 2 (Scope of Application)

These Procedures apply to planning guarantee, reserve operation and related supervision and management activities of local grain reserve in this Municipality.

The local grain reserve in these Procedures includes government reserve and enterprise reserve. Government reserves are divided into city-level government reserves and district-level government reserves, and enterprise reserves are divided into social responsibility reserves and commercial inventories.

The "grain" in these Procedures mainly includes wheat, rice, corn, miscellaneous grains and their finished grains, as well as soybeans, oil plants and edible vegetable oils.

Article 3 (Management Principles)

The local grain reserves security management work shall adhere to the leadership of the party committee, the government dominance, and the planning guidance, implement hierarchical management and classified storage, and follow the principles of the best storing and demand meeting, safety and efficiency, and green development.

Article 4 (Government Responsibilities)

This Municipality shall implement the grain security responsibility system, strengthen the organization and leadership of local grain reserve safety management, incorporate local grain reserve safety management into the scope of the annual performance appraisal of the leadership team and the annual appraisal of leading cadres of each district, coordinate the resolution of the major issue in the local grain reserve security management work and effectively guarantee the security of local grain reserves.

Town/Township people's government and sub-district offices shall assist in the promotion of local grain reserve security.

Article 5 (Department Responsibilities)

The departments of development and reform, grain material reserve shall be responsible for the macro-control of the scale, variety, overall layout and utilization of local grain reserves. The grain material reserve department shall take charge of the security management of local grain reserves,  establish a sound local grain reserve management system, and supervise and inspect the quantity, quality, storage security, and implementation of the reserve policy of local grain reserves.

The finance department shall take charge of the budget arrangement, and timely and full appropriation of local grain reserve financial funds, and supervision and inspection of the use of funds.

State-owned assets departments shall take charge of urging relevant regulatory enterprises to strengthen the assessment of their subordinate key enterprises undertaking storage tasks, and cooperating with industry authorities to urge regulatory enterprises to implement relevant local grain reserve laws, rules, regulations and policies.

The departments of agriculture and rural areas, market regulation, emergency management, transportation shall, in accordance with their respective responsibilities, do a good job in the security management of local grain reserves.

Article 6 (Regional Linkage)

This Municipality shall strengthen cooperation and exchanges with the Yangtze River Delta region and other major grain producing areas, establish an emergency guarantee supply coordination mechanism, carry out grain storage in places other than corresponding area, production and marketing docking, and realize the exchange of grain storage information, supervision interaction, mutual assistance in law enforcement, and mutual recognition of testing results, and shall improve grain security guarantee capability.

This Municipality shall encourage the expansion of international cooperation and exchange channels for grain reserves and the establishment of a grain circulation system in line with international standards.

Article 7 (Publicity and Education)

The Municipality shall strictly enforce economy, oppose grain waste, strengthen grain-loving and -saving publicity and education, advocate scientific consumption, and raise the awareness of grain security in the whole society.

Chapter II  Planning and Guarantee

Article 8 (Planning Preparation and Funding Guarantee)

The municipal and district people’s governments shall, in accordance with the requirements of overall coordination, integrated development, and priority of grain security, formulate plans for local grain and material reserves, and incorporate them into national economic and social development plans, and clarify the functional positioning and regional layout of local grain reserves.

The funds required for local grain reserves shall be included in the fiscal budget of the government at the corresponding level to be guaranteed, and specific tasks such as the declaration and review of budget funds shall be undertaken by the grain material reserve department.

Article 9 (Infrastructure Guarantee)

This Municipality shall strengthen the construction of local grain storage infrastructure, and coordinate the use of land for grain storage, logistics, emergency protection and other facilities in the land and space planning to ensure that the local grain storage infrastructure matches the supply guarantee requirements such as the scale of purchase and storage, and emergency processing.

No unit or individual may embezzle, misappropriate or dismantle without authorization the local grain reserve infrastructure and valuable quality inspection equipment funded and constructed by the government, and may not change their functions or uses at will. If it is necessary to demolish or relocate the local grain storage infrastructure or change its function or purpose due to urban construction or the adjustment of the layout of the local grain storage plan, the construction shall be carried out first and then demolition. When rebuilding or renovating the local grain storage infrastructure, the allocation standards, building area, etc. shall not be reduced.

Article 10 (Local Grain Reserve Plan)

The municipal departments of development and reform, grain material reserve, together with the municipal finance department, shall study and put forward a local grain reserve plan based on the total local grain reserve plan issued by the State, report to the Municipal People’s Government for approval and organize the implementation thereafter, and implement dynamic adjustments.

The local grain reserve plan must reflect the principle of focusing on municipal-level reserves supplemented by district-level reserves, and meet the actual needs of this Municipality’s grain supply and demand, government regulation, and emergency guarantee, including the scale of reserves, variety structure, overall layout, quality standards, financial subsidies, social responsibility reserve scale and layout, etc.

The district people's government may, in accordance with the local grain reserve plan, refine the contents of the district's grain reserve layout and financial subsidies.

Article 11 (Priority to Local Reserves)

In principle, the city-level government reserves are stored within the administrative area of this Municipality. If it is necessary to store it in a place other than this Municipality, priority shall be given to areas with sufficient grain sources, convenient transportation, and a good foundation for the grain processing industry to ensure that grain can be obtained, transferred quickly, and used right away.

District-level government reserves must be stored within the administrative area of this Municipality, and in principle, stored within the administrative area of the corresponding district.

Article 12 (Requirements for Finished Grain Reserves)

This Municipality’s finished grain reserves shall be higher than the size required by the State.

This Municipality shall gradually increase the number of finished grain reserves and increase the proportion of small-package finished grain reserves.

Article 13 (Scientific Grain Storage)

This Municipality shall strengthen research on grain storage technology, promote the application of green and environment- friendly new technologies, new processes, and new equipment of grain storage, improve storage conditions, promote the storage of high-quality grains, and meet the market's demand for high-quality grains.

Article 14 (Grain Seed Reserve)

This Municipality shall establish a sound grain seed reserve system. The agricultural and rural department shall coordinate the layout of seed storage infrastructure, regularly inspect and update the stored seeds, and ensure the safety of seeds used for grain production.

Article 15 (Government Reserve Rotation)

The government reserves implement balanced rotation to ensure good food quality.

The grain material reserve department shall, in conjunction with the fiance department, formulate an annual rotation plan and arrange grain rotation based on the characteristics of the government’s reserves, indicators of storage quality in rotation and storage life, according to the needs of macro-control, financial affordability, grain quality improvement, and grain market supply and demand.

Unplanned government reserve rotation can be carried out independently in conjunction with normal business circulation, but the prescribed number of reserves must be maintained.

Article 16 (Emergency Guarantee)

This Municipality shall establish a sound grain emergency guarantee coordination mechanism. When responding to major events that affect food supply such as natural disasters, accidents, disasters, public health incidents, and social security incidents, the grain material reserve department shall, in accordance with the grain emergency plan, coordinate relevant departments to take measures, and use social responsibility reserves and government reserves in sequence. After the emergency situation is eliminated, the local grain reserves used shall be restored in time with the same quantity and quality.

The grain material reserve department shall, in conjunction with relevant departments such as transportation, implement emergency grain sources, processing enterprises, logistics enterprises, and supply outlets, and conduct regular grain emergency drills and training.

Article 17 (Financial Subsidy and Credit)

This Municipality shall implement financial subsidies for local grain reserve management expenses and loan interest. The specific subsidy standards and management methods shall be determined by the finance and grain material reserve departments.

The grain material reserve department shall, in conjunction with the finance department and policy banks, establish a regular consultation mechanism to manage the budget review, implementation, liquidation, and assessment of local grain reserve financial subsidies, and coordinate and resolve specific matters related to local grain reserve financial subsidies and credit funds.

The reserve management fee subsidy of the city-level government shall exercise quota package, and the loan interest is subsidized according to the facts.

Applicants for government reserve loans shall open special accounts, under close operation of credit funds, and subject to policy bank credit management. The loan amount is linked to the value of grain stocks.

Chapter III  Government Reserves

Article 18 (The Entity of Government Reserve Storage)

The grain material reserve department shall, in accordance with the principles of openness, fairness and justice, select the best from the market entities that meet the following conditions to determine the entity of government reserve storage:

1.The warehouse conditions comply with national and municipal standards, technical specifications and management provisions;

2.Have its own storage facilities and equipment matching the scale of grain storage, and meet the requirements of information-based management;

3.Have professional and technical personnel in grain storage, inspection, prevention and control, and informatization suitable for the scale of grain storage;

4.Have grain quality testing equipment that meets national standards; and

5.Standard operation and management, and no serious bad credit records.

Article 19 (Storage Contract)

The grain material reserve department shall sign a storage contract with the determined entity of government reserve storage .

The storage contract shall specify the storage address, storage period, and storage variety, quantity, quality and rotation, emergency protection and other requirements, and specify the rights and obligations, liability for breach of contract, and termination of the contract.

Article 20 (System Construction)

The entity of government reserve storage shall establish a sound standardized management system, implement internal control over the quantity, quality, warehousing, rotation, and use of funds of government reserves, and prevent and control reserve operation risks. The relevant management system shall be reported to the grain material reserve department for the record.

The entity of government reserve storage shall clarify the personnel responsible for the safety of grain reserves, conduct self-inspection of the situation of grain reserves, and if finding any violation of laws and rules, promptly make rectification and report to the food material reserve department in accordance with the provisions.

Article 21 (Requirements for the Entity of Government Reserve Storage)

The entity of government reserve storage shall implement the separation of policy functions and operational functions.

The entity of government reserve storage carrying out government reserve storage business shall meet the following requirements:

1.exercise separation from the personnel, physical objects, finance, accounting, and storage facilities of commercial business;

2.carry out special warehouse storage, special person custody, special account record;

3.through the grain information management platform, conduct real-time monitoring and truthful reporting of grain quantity, variety, quality, storage, and exit and warehousing situation to achieve information interconnection;

4.regularly carry out grain quality inspections to ensure that the grains meet the national and municipal food safety standards; and

5.comply with the relevant laws, rules and regulations, as well as mandatory standards and technical specifications.

Article 22 (Out-of-area Storage)

If the entity of the city-level government reserve storage needs to store outside the administrative area of this Municipality, it shall report to the municipal grain material reserve department for approval; if the entity of the district-level government reserve storage needs to store outside the administrative area of the district, it shall report to the district grain material department for approval.

Article 23 (Rotational Transaction)

Government reserve rotation is mainly carried out through open bidding on grain trading platforms. The starting price of the open bidding bid shall be reviewed and drafted by the expert committee organized by the grain trading platform and reported to the grain material reserve department for determination.

If it is necessary to carry out government reserve rotation through other means, it shall be reported to the grain material reserve department for approval in advance.

Government reserve rotation shall not be carried out through connected transactions, false transactions, and insider trading.

Article 24 (Loss and Spoilage)

The entity of government reserves shall improve grain storage conditions and reduce grain losses. The loss and spoilage caused by mismanagement shall be borne by the entity of government reserves.

Article 25 (Prohibited Acts)

The entity of government reserves shall not perform the following actions:

1.entrust other enterprises to reserve government reserves without authorization;

2.lease storage facilities to store government reserves without authorization;

3.store unqualified grains as government reserves in warehouses; and

4.other violations of laws and rules.

Article 26 (Exit Mechanism)

The grain material reserve department shall establish and improve the exit mechanism of the entity of government reserves. If the entity of government reserves is in any one of the following situations. the grain material reserve department shall terminate the storage contract with it:

1.dissolution or bankrupt declaration;

2.serious loss of grains due to poor management;

3.occurrence of a major safety production accident or major food storage accident;

4.sale or mortgage of facilities such as the warehouse that stores government reserves;

5.failure to annual assessment; or

6.other violations of relevant provisions on grain reserves and the circumstances are serious.

Chapter IV  Enterprise Reserves

Article 27 (Entity of Social Responsibility Reserve)

Grain processing enterprises, large supermarkets, grain wholesale markets, and catering enterprises above designated size in this Municipality (hereinafter collectively referred to as "social responsibility reserve entities") shall establish social responsibility reserves in accordance with the law and maintain daily minimum stocks of grain. The specific applicable scale, daily minimum inventory, etc., shall be formulated by the municipal grain material reserve department in conjunction with the municipal market regulation and other departments, and shall be implemented after being approved by the Municipal People’s Government.

Article 28 (Requirements for Social Responsibility Reserve)

The social responsibility reserve entity shall perform the warehousing duties for the social responsibility reserve it assumes, establish a ledger, ensure that the variety, quantity, and quality safety meet the requirements, and obey the government's regulation in accordance with the law.

The types, quantity, and quality of reserves undertaken by the entity of social responsibility reserves shall be specifically verified by the grain material reserve department in accordance with the needs of the grain market regulation, and adjusted according to the actual situation.

Article 29 (Minimum and Maximum Inventory Quantity under Specific Circumstances)

When grain prices fluctuate significantly or in a state of grain emergency, social responsibility reserve entities shall implement the minimum and maximum inventory standards determined by the Municipal People's Government.

Article 30 (Policy Support)

The finance and grain material reserve departments can give policy support to the social responsibility reserve entities by preferentially entrusting the purchase and sale of policy-based grains.

Article 31 (Guiding the Society to Store Grain)

This Municipality shall encourage grain business enterprises to establish reasonable commercial stocks.

Encourage the canteens of state organs, schools, hospitals, large and medium-sized enterprises and households to store a certain amount of finished food according to their needs.

Relevant departments of the people's governments at all levels shall do a good job in the administrative guidance of grain reserves. Encourage relevant scientific research institutes to provide public welfare technical services for grain reserves.

Article 32 (Transfer and Compensation)

When responding to major events that affect grain supply such as natural disasters, accidents, disasters, public health incidents, and social security incidents, the municipal and district people’s governments and their grain material reserve departments may, in accordance with the legal procedures, transfer enterprise reserves and provide compensation and rewards in accordance with the provisions.

Chapter V  Supervision and Management

Article 33 (Daily Supervision and Inspection)

The grain material reserve department shall formulate and organize the implementation of the annual supervision and inspection plan for local grain reserves, and supervise and inspect the quantity, variety, quality, rotation, storage safety, and implementation of grain reserve policies. The inspection results shall be disclosed in accordance with the relevant provisions.

The grain material reserve department, conducting quality inspections, may entrust a quality inspection agency that meets the relevant conditions to conduct sampling and test.

Article 34 (Annual Assessment)

The grain material reserve department shall, in conjunction with finance, emergency management, state-owned assets, market regulation and other departments, and policy banks, conduct annual assessments of the grain reserves and capital use of the entity of government reserves. The results of the annual assessment shall serve as an important basis for adjusting the entity of government reserves, the number of reserves, and the frequency of inspections increase and decrease.

Article 35 (Interview)

In any of the following situations, the municipal grain material reserve department may, in conjunction with relevant departments, interview the person in charge of the district people’s government:

1.store government reserve grains outside the administrative area of this Municipality;

2.insufficient planning and layout of local grain reserves;

3.inadequate protection of state-owned grain storage facilities and equipment, dismantling or relocating infrastructure or changing its use without authorization;

4.the occurrence of grain reserve issues that are strongly reflected by the public and affect social stability; or

5.other situations that seriously affect grain security.

Where the entity of government reserves or the entity of social responsibility reserves fails to strictly perform the reserve duties, the grain material reserve department may interview its chief person in charge.

Article 36 (Informatization Supervision)

The municipal grain material reserve department shall establish a sound grain information management platform, and implement dynamic remote monitoring of the grain varieties, quantity, quality, and storage conditions of the municipal and district people's government reserves.

Article 37 (Credit Supervision)

The grain material reserve department shall establish the credit files of the entity of government reserve and the entity of social responsibility reserve, record the results of daily supervision and inspection, the investigation of illegal acts, and other information, and collect it to the public credit information service platform of this Municipality in accordance with the law.

The grain material reserve department shall promote the implementation of hierarchical and classified supervision, and shall implement key supervision on government reserve storage entities and social responsibility reserve entities that have untrustworthy behaviors, and shall, in conjunction with relevant departments, take measures such as restricting subsidies and policy-based grain business in accordance with the law.

Chapter VI  Legal Liability

Article 38 (Guiding Provisions)

If relevant laws and rules have provisions for punishment for violation of the provisions of these Procedures, such provisions shall be applied.

Article 39 (Punishment for Violation of Out-of-area Storage Requirements)

If the entity of government reserves stores in this Municipality or outside the corresponding area without authorization, in violation of the provisions of Article 22 of these Procedures, the municipal or district grain material reserve department shall order correction within a time limit; if the correction is not made within the time limit, a fine of not less than 50,000 yuan but not more than 200,000 yuan shall be imposed.

Article 40 (Punishment for Violation of Rotational Transaction Requirements)

For violation of the provisions of Article 23 of these Procedures, failing to do open bidding as required or setting the starting price without authorization, the municipal or district grain material reserve department shall give a warning and may impose a fine of not lees than 50,000 yuan but not more than 200,000 yuan.

Article 41 (Punishment for Relevant Prohibited Acts)

For violation of the provisions of Article 25 of these Procedures, entrusting other enterprise as agent to store government reserves, renting storage facilities to store government reserves without authorization, or storing unqualified grains as government reserves, the municipal or district grain material reserve department shall order for correction within a time limit, and may impose a fine of not less than 20,000 yuan but not more than 100,000 yuan; if the correction is not made within the time limit, a fine of not less than 100,000 yuan but not more than 300,000 yuan shall be imposed.

Article 42 (Punishment on Persons Responsible)

Where the entity of government reserves that violates the provisions of Articles 22, 23, and 25 of these Procedures and the circumstances are serious, the municipal or district grain material reserve department shall impose on its principal and personnel directly responsible a fine of not less than 10,000 yuan but not more than 50,000 yuan.

Article 43 (Administrative Liability)

Where relevant departments and their staff violate the provisions of these Procedures by committing one of the following acts, their competent department or supervisory authority shall order corrections; if the circumstances are serious, the person in charge and other persons held directly responsible shall be punished according to law; the said persons whose behavior constitutes a crime shall be investigated for criminal responsibility in accordance with the law:

1.failure to perform duties in accordance with the provisions of these Procedures;

2.failing to investigate and deal with illegal acts discovered, complained or reported in accordance with the law;

3.violation of administrative punishment; or

4.other abuse of power, negligence of duty, and malpractice for personal gain, causing loss of local grain reserves.

Chapter VII  Supplementary Provision

Article 44 (Effective Date)

These Procedures shall be effective as of September 1, 2021.