◆《Public grain and price protection and acquisition 》
At the beginning of Japanese reign, the government utilized the Farmers’ Association System in delivering and transporting rice grains. After Taiwan retrocession, the KMT government adopted the Japanese grain control and distribution policy. Later, “Land Property Tax levy in Return for Tangible Asset, Tax Levy Acquisition. Grain Lease in Public Land, Fertilizer Rendered in Exchange for Grain, Return on Rough Rice/Paddy from Grain Production Capital Loan, Loan granting on various agricultural machinery capital, and hydraulic facility capital return were methods used to acquire partial rough rice/paddy as “public grain.” The acquisition and storage of public grains were carried out by respective Farmers’ Associations in different areas. These public grains were mainly used for military consumption, grain consumption of family members of soldiers, grain consumption for public servant/teacher, grain for wine production, distribution and sales, as well as batch sales. In addition, grains in excess were exported.
In 1973, power and grain crisis broke out internationally. The natural disasters in Taiwan resulted to inadequate supply of rough rice/paddy. As the prices soared, the government encouraged increased production and ensured the rights of peasants. In 1974, Food Stabilization Fund was created to protect pricing. [At the time, 20% profit was added to the anticipated rough rice/paddy production costs] Rough rice/paddy produced by peasants was acquired and the government had greater control over public grain quantity. Later, public grain increased in quantity, and the pressure of excessive grain reserves arose. The government therefore not only constructed new storehouses but also appointed more private rice milling factories to undertake storehouse operations. Storehouses of private rice milling operators were used to store public grain. One thing worth mentioning, private rice milling operators were only requested to “Store” public grains not “sell” them. [Outsourced by Food and Agriculture Agency〕

◆《Example: Nutritive lunch》
Based on the actual example below, milled rice/polished rice in “nutritive lunch” is public grain. Schools need to purchase it from Food and Agriculture Agency. After the school sends out a purchase order, Food and Agriculture Agency will require the school to fill out which private rice milling factory or Farmers’ Association that stores public grain it wishes to have the rice delivered from. The rice milling factory or Farmers’ Association selected will then transport public grain in the storehouse to the school.
Take our school for example (Hsin Chia Elementary School), privately owned Lian-Fa Rice Milling Factory [public grain outsourced storehouse and milled rice/polished rice processing factory] used to transport milled rice/polished rice to our school from its storehouse. In the recent year or two, our school switched to Houbi Town Farmers’ Association for rice delivery to our school. At present, school rice consumption is provisioned by Houbi Town Farmers’ Association storehouse

　
Procedure

◆《Private grain》
As compared to “public grain”, rough rice/paddy flowing freely in non-government circles is called “private grain.” The free flows of rough rice/paddy are collectively called private grains. A small faction of these private grains is reserved by farming families while most of it is acquired by rice dealers. After processing, it is in turn sold by retailers. It is similar to logistics in the past; the only difference is that the present rice grain logistics are less complex. Most rice dealers have rice milling factories. In other words, they are both wholesaler agents and processors.
　
◆《Farmers’ Association also plays the role of the rice dealer》
In terms of Farmers’ Association, can Farmers’ Association that is in charge of public grain be responsible for private grain acquisition? The answer is yes. As long as Farmers’ Association has rice milling tools, it is in fact possible for it to act as price dealer and acquire rough rice/paddy from peasants. As a matter of fact, many Farmers’ Associations have long purchased drying, milling, and freezing barrel equipments and created their own brands. In short, Farmers’ Association also plays the role of the wholesaler agent and the processor.
An example of the above is Houbi Town Farmers’ Association. In recent years, Farmers’ Associations have released Nung Rice, Lan Li Rice, and Lan Li Hsiang Rice. These rice packages cannot be public grains; instead, they are acquired from peasant harvests. Also, Farmers’ Association also had drying, milling, vacuum packaging, and storage tanks at constant temperatures. The one-line operation methods and equipments are almost identical with private rice dealers’. In some cases, they go even farther than them.
　
◆《Farmers’ Association VS rice milling operator》
You may wonder if Farmers’ Association compete with rice milling factories for business. If you think that, you are right in a way. As mentioned in the previous page, conventional “soil grind room” operators were often land owners as well. They were the sources where peasants acquired loans from. They therefore had control over rough rice/paddy flow. Consequently, the Japanese government helped Farmers’ Associations to grow so as to shred the power of soil grind rooms.” Naturally, conflicts between Farmers’ Association and rice milling operator were inevitable. Currently, peasants acquire loans mainly from the credit section of Farmers’ Association. Modern rice milling factories do not grant loans. As for rice grain flow and processing, Farmers’ Association has gradually taken over. Unless it is a large rice milling factory, otherwise, it is rather difficult for factory proprietors to compete with Farmers’ Association.
　
◆《Current logistics flowchart》
Based on the above descriptions, and data from Rice Quality Information Network of Council of Agriculture, Executive Yuan , current rice logistics procedures are as shown in the chart:
　

Orange line: storage and processing are two separate operations. They may be categorized into: storehouse operator and processor. Rice grains may be stored at Vendor A which are then milled at rice milling the factory of Vendor B. However, Farmers’ Associations and private rice dealers today generally are equipped with storehouses and rice milling equipments. Many public grains are stored in outsourced storehouses. Storehouse operators are themselves outsourced milled rice/polished rice processors.〔such as Lian-Fa〕Generally, Rice grains are stored at the storehouse of vendor A, and milled at the rice milling factory of vendor A.