March 30, 2004

China's Heilongjiang Province To Raise Grains Output In 2004

Heilongjiang in northeastern China, one of the country's top grain producing provinces, plans to boost grains production by nearly 12% in 2004, a local newspaper reported over the weekend, but traders say that is too ambitious a target.
 
It remains to be seen if local farmers would plant more grain, such as rice and corn, at a time when high soybean prices are encouraging more farmers to switch to soybeans from grains, they said.
 
Over the weekend, the Heilongjiang government held a meeting to assess the current production, supply and demand situation, according to a report in Heilongjiang Daily.
 
The report cited Governor Zhang Zuoji as saying the province plans to lift grains production to 28 million metric tons in 2004. If realized, it would be 11.47% higher than the 25.12 million tons produced in 2003.
 
The local government has announced a package of measures to stimulate grain production and increase the income of grain producers, said the report.
 
For example, rice farmers in Heilongjiang will get 225 yuan ($1=CNY8.277) in direct subsidy for planting a hectare of rice this year.
 
In addition, the Heilongjiang government will also scrap all agriculture taxes and provide protective procurement prices for some key grains.
 
However, the government's effort to boost grain acreage may not succeed as farmers are keen to increase soybean acreage because of high oilseeds prices, analysts in China said.
 
Farmers in other major grain producing regions have also showed intentions to plant more cotton and soybeans, at the cost of wheat and corn, according to a survey conducted by China's Ministry of Agriculture in February.
 
The Chinese government may not be able to reverse the trend of grain consumption exceeding production despite new subsidies, lower agricultural taxes and other financial support for farmers, the latest report from the U.S. Department of Agriculture said, noting farmers appear to base their planting decisions on prices and profits rather than government directives.