April 8, 2008

 

Droughts and population growth put pressure on China's grain supplies
 

 

China is feeling a rising pressure to grow enough grain to feed an expanding population amid droughts and rapid urbanisation, an agricultural economist at a leading university said.

 

Wen Tiejun, head of the School of Agricultural Economics and Rural Development at the Renmin University of China told Xihua that the pressure on the grain supply is rising in China, following meteorological reports that droughts in northern China, the worst in five years, is set to continue.

 

Chinese meteorologists forecast on Tuesday the worst drought in five years will continue in north China, including the capital.

 

Even as China saw a fourth consecutive rise in grain output last year that met over 95 percent of the population's needs, Wen said it is getting ever harder to keep the balance.

 

As farming became less profitable, many have turned to work in the cities.

 

Even as the government doled out lavish subsidies to its farmers and enacted price protection measures for some grains last year to protect farmers, actual proceeds dropped from 382 yuan (US$54.30) to 320 yuan (US$45.67) between 2004 and 2006 for growing each mu (a fifteenth of a hectare) of grains.

 

The low profitability has damaged farmers' enthusiasm for raising grain production, according to vice agricultural minister Yin Chengjie.

 

Meanwhile, local authorities and companies are buying up large tracts of arable lands for industrial development, further adding to the grain production pressure, said Wen.

 

Grain demand is growing in the cities where each year an estimated 15 million labourers arrive from the rural countryside.

 

This meant an addition 4.5 million tonnes of grains needed each year, Yin said.

 

While China has added 90 million people to its population, its grain supply per capita actually fell from 412 kg to 378 kg in 2006.

 

Even though the country's grain output crossed 500 million tonnes last year, it is still 15 million tonnes less than the total demand, official figures show.

 

Still, China continues to dole out money to keep a lid on the problem. Last week, the State Council decided to spend another RMB 25.25 billion (US$3.6 billion) in addition to this year's rural budget to subsidise seed purchases, fuel costs, fertilizers and other production materials for farmers.

 

The Ministry of Finance has also paid RMB 63.3 billion (US$9 billion) in subsidies to farmers ahead of schedule to better prepare them for the coming spring planting.

 

State purchasing prices for grains was also raised, the second time in two months.

 

So far, such subsidies, working with protective purchasing prices, has been effective in balancing the conflicting aims of grain production growth and higher farmers' income, according to rural policy researcher Li Chenggui with the Chinese Academy of Social Sciences.

 

China has vowed to find a long-term solution to close the rural-urban gap, increasing rural input and sending farm experts to boost agricultural productivity.