February 15, 2013

China to increase spending to achieve grain self-sufficiency

China will increase farm subsidy spending to improve the country's grain self-sufficiency, among other measures to modernise farming and tackle a growing divide between urban and rural incomes.

National plans highlight rural issues for the tenth year running - a sign that the government wants to be seen as taking firm action on problems such as rural poverty and food insecurity.

However, while agricultural support and protection figure prominently in the government's plans, they are not the only tools to do so.

Proposals cover issues ranging from grain supply, migrant workers' rights, reforms to rural land expropriation, rural land registration, and the consolidation of small farms into larger ones.

The government will continue to raise minimum support prices for wheat and rice. Beijing will also initiate temporary purchasing and storage of corn, soy, canola, cotton, and sugar.

Chinese farm spending has expanded dramatically in recent years - although it remains very low on a per capita basis, and is mostly reported as causing not more than minimal trade distortion.