Grain auditors on the lookout for fraud are targeting lower-level governments to see whether grain purchases match national agricultural loan records in a landmark nationwide check on stockpiles, an industry source said.
The source said an examination of the records was a more efficient way to expose fraud in state grain purchasing than the more complicated and time-consuming process of inspecting grain storage facilities.
'Mismatched records cannot directly clarify which party is responsible for a mistake, but they do show that at least one party had something to hide,' the source said, adding that if nobody admitted the mistakes voluntarily, a parallel inspection of grain stocks would provide the answer.
The State Administration of Grain formally launched a two-month nationwide grain stock inspection campaign on Wednesday. County, city and provincial governments will have to check their stocks this month, and national inspection teams will randomly pick places to test the accuracy of those checks next month.
About 100,000 personnel have been trained for the job and 10 government departments are involved.
The nationwide grain stock inspection is the third such inspection in the past 60 years and follows reports over the past year that many grain reserves did not exist.
Agricultural scientist Yuan Longping said on the sidelines of the meeting of the Chinese People's Political Consultative Conference last year that he knew of several city grain reserve depots that were empty.
Following Mr Yuan's lead, media investigations revealed that government-run stockpile centres in Jiangxi, Heilongjiang, Anhui, Sichuan and many other provinces were empty or being used for other purposes.
The State Council, and especially Premier Wen Jiabao, had called for attention to the issue and sent inspection teams across the country to assess the problem, the source said.
'Some inspectors did find that some lower-level governments stockpiled far less grain than they should have, given the loans they received from the Agricultural Development Bank of China.'
China Youth Daily reported last year that Fujin in Heilongjiang province faked its grain records to fraudulently claim 3.39 million yuan (HK$3.85 million) in state grain subsidies and 39.67 million yuan in bank loans. Major officials in charge of the stockpile were arrested.
An agricultural researcher at the Chinese Academy of Social Sciences, Yu Jianrong, said that heavy-handed punishment did not appear to be enough to reassure the central government about food security and the campaign was a clear sign the government wanted to fix loopholes.
Fudan University economics professor Zhou Dunren said: 'We have to make sure that no matter what happens, the bottom line of sufficient food reserves is 100 per cent secure.'