The 2023 Central Rural Work Conference proposed to explore the establishment of an inter provincial horizontal interest compensation mechanism for grain production and sales areas, which is a new exploration based on the overall development of the national economy, focusing on ensuring national food security and promoting coordinated regional economic development. The 2024 Central Rural Work Conference further proposed the implementation of inter provincial horizontal interest compensation for grain production and sales areas under central coordination. The essence of inter provincial horizontal benefit compensation in grain production and sales areas is to ensure that the contributions of the main production areas in grain production are reasonably rewarded, and to strengthen the joint responsibility of the main production areas, main sales areas, and production and sales balance areas to ensure food security. In 2003, the Ministry of Finance issued the "Opinions on Reforming and Improving Several Policies and Measures for Comprehensive Agricultural Development", designating 13 provinces (autonomous regions) as the main grain producing areas. In 2004, the National Conference on Agriculture and Grain Work further determined the regional division of main production areas, balanced production and sales areas, and main sales areas. From then on, the regional map of the main production area, production and sales balance area, and main sales area was officially established. From 2004 to 2023, the proportion of grain production in the main grain producing areas to the total national grain production increased from 72.67% to 77.90%, with 88.77% of the increase in grain production during this period coming from the main grain producing areas; The planting area of grain in the main sales area has decreased by 26.93 million mu, and the proportion of grain production has dropped from 7.35% to 4.30%. In 2023, the per capita grain production of the permanent population is 396 kilograms lower than the national average. Due to the low returns from grain cultivation and the small contribution of grain to finance, the main production areas often face the dilemma of increasing grain production and lagging economic development. The relatively slow economic development also leads to a large number of outstanding debts and inability to keep up with the livelihood undertakings in the main production areas. The country has introduced a series of policy measures to support the main grain producing areas, but relying solely on national vertical interest compensation is not enough. It is necessary to continuously improve the vertical interest compensation mechanism while further increasing the compensation efforts and establishing an inter provincial horizontal interest compensation mechanism for grain production and sales areas. Implementing inter provincial horizontal compensation for grain production and sales areas is conducive to two-way interaction and joint guarantee of food security. The inter provincial horizontal interest compensation has further strengthened the responsibility of the main sales areas to ensure food security, gradually transforming the guarantee of food security into a conscious behavior of the local government. On the one hand, promote the main sales areas to focus on the production, circulation, and reserve of grain in the region, and strive to improve self-sufficiency and security capabilities; On the other hand, necessary compensation for the interests of the main production areas should be provided, and support should be given to the main production areas to produce a variety of grains and increase grain production. People may wonder why compensation should be given to the main production areas even though they have already paid for purchasing grain from the market? Grain is a commodity, and if the grain price can fully reflect its true value, there is no need for additional compensation. However, due to the fundamental and external characteristics of grain, its application scope is wide and its impact is significant. In addition, the whole society is sensitive to grain prices, and the state continuously regulates the grain market to maintain stable grain prices, resulting in a deviation between grain prices and values. At the same time, compensation for the main production areas is also compensation for the opportunity cost of grain cultivation. The transfer of grain from the main production areas to the main sales areas is equivalent to the transfer of arable land and water resources, as well as the removal of opportunities for the development of other efficient industries. Therefore, corresponding compensation needs to be provided to the main production areas. In the 1980s and 1990s, the coastal main sales areas emerged first in the reform and opening up. After years of development, the Yangtze River Delta and Pearl River Delta have become important economic growth poles in China, with advantages in capital, technology, and equipment, and the conditions for multi-faceted cooperation with the main production areas. At present, inter provincial cooperation in grain production and sales areas mostly adopts forms such as contract agriculture and off-site storage, with few deep level cooperation. The north-south paired assistance cooperation between the main grain consumption area of southern Jiangsu and the main grain production area of northern Jiangsu in Jiangsu Province is of typical significance. The exploration of inter regional grain production and sales cooperation can provide reference for inter provincial production and sales cooperation. The southern and northern regions of Jiangsu have utilized relevant assistance and cooperation platforms to establish a mechanism for grain production and sales coordination. They have established high-quality rice and wheat supply bases in northern Jiangsu, ensuring the supply of grain and improving the province's food security level. This cooperation model not only facilitates the integration of elements, but also promotes the restructuring of the industry. Suzhou and Suqian cooperate to build Suzhou Suqian Industrial Park, which forms an industrial cluster around the three leading industries of electronic information, precision machinery, and new energy and new materials. With 0.16% of Suqian's land, the park achieves 6.7% of the city's industrial added value above designated size and 37.5% of its high-tech industrial output. The industrial labor productivity, industrial added value rate, and energy consumption per unit of industrial added value rank first in the city. Suzhou Suqian Industrial Park has effectively promoted regional common development and accelerated the industrialization process in northern Jiangsu. China adopts inter provincial horizontal compensation in watershed ecological protection, but the flow of grain is divergent. The implementation of inter provincial horizontal compensation for grain production and sales areas involves significant adjustments in the interests of production and sales areas, which cannot be separated from the central government's overall planning and deployment, and promotes active interaction and cooperation between production and sales areas. Under the overall arrangement of the central government, we should guide the main sales areas to actively participate in the construction of grain production bases, storage facilities, processing parks, online marketing, and logistics transportation in the main production areas, and transform "supply and demand cooperation" into "supply chain cooperation". At the same time, expand the forms of compensation for interests between production and sales areas. Interest compensation is not equivalent to simple financial subsidies, but also includes cooperation compensation in various aspects such as technology, talent, medical care, education, etc. in the production and sales range. It is necessary to help the main production areas optimize their industrial structure and promote their all-round high-quality economic and social development. Author: Zhong Yu (Researcher at the Institute of Agricultural Economics and Development, Chinese Academy of Agricultural Sciences)