Global credit crunch affects China's farmers

The global financial crisis has taken a toll on China's agricultural industry, with farmers suffering major losses.

 

State media, citing government economists said on Wednesday, 22 October 2008 that China's 800 mllion farmers are affected by the global credit crunch as commodity prices plunge with a worse scenario for next year.

 

Rural China is suffering because soy prices have fallen by about half on international markets in recent months, while the price of wheat is down by as much as 30% percent, reported China Daily.

 

Farm product prices are falling in the domestic market and this in turn will hurt farmer's income, say Song Hongyuan, an economist with the agriculture ministry.

 

China has made it a primary priority to raise income levels in rural areas so as to bridge the wealth gap between the rich cities and the poor countryside.

 

As part of this effort, the government has targeted 9 percent growth in peasant incomes this year, but the objective seems out of reach now.

 

An economist with the Development Research Center, Chen Guoqiang said the organization would be happy if the rate reaches 7 percent.

 

China's farmers will suffer an even greater setback next year due to the financial crisis.

 

The rural population is also being affected in other ways as the crisis has been especially hard on small enterprises that employ migrant workers from the countryside.

 

Chen also added that China's labour-intensive sectors, such as textile has also been hit hard and they are the major employers of migrant workers.

 

This could have long-term implications for basic policy goals set in Beijing and the country will have a tough time achieving its target of doubling farmer's income by 2020, said the paper, citing Song.