Wednesday, October 14, 2009

Grain marketing under the microscope

Each April local teams conduct surveys of a sample of farmers' grain sales, income, and on-farm stocks for the preceding 12-month period. The samples are small and results are released for only a few prefectures, but the surveys provide a small window into what's happening in grain markets. Like Chinese grain farmers under a microscope.

I came across two articles--one from Suyu in northern Jiangsu and a second from Wenling in eastern Zhejiang. Farmers in both areas grow long-grain indica rice and short-grain japonica rice. In Suyu they also grow some wheat.

The Suyu article emphasizes the effect of improved indica rice varieties. Traditionally, farmers here prefer japonica rice, but a new indica variety with high yield and improved taste has made inroads. Farmers have been switching to indica because it has lower production cost and the price is now about the same as for japonica. They're eating more indica rice too.

The Suyu article also emphasizes the social changes. Most families have someone who either works in a city or a township enterprise. With fewer people at home, rice consumption is down. People mainly consume rice they grow, but more are buying rice in the open market.

In 2008-09, the district’s household average grain production was 5494.36 kg per farm, up 6% from last year. Grain used for food averaged 1049.49 kg, down 94.12 kg from the previous year. Sales averaged 4927 kg per farm, up 427.87 kg from the previous year’s.

In Wenling, grain sales were down, but there was a diversification of sales channels. Both surveys cite the farmers' enthusiasm for the minimum price purchase policy. In Wenling, a little more rice was sold to state-owned grain purchasing units due to the policy. The survey says there was a big increase in the share of rice sold to private traders who go door to door, making it easy and convenient to sell. Sales to big companies were down due to the effects of the financial crisis (and public purchases "crowding out" private purchases?).

In Wenling, average grain production per household was down 2.1% due to less planted area. Average sales were down 7.48 kg and inventory increased. On April 1, 2009, average grain inventory was 772 kg, up 46.83 kg (an increase of 6.46%). Late indica rice inventories accounted for 57%, early indica 4%, japonica 37%. The main food is late indica rice inventory, about half. Inventories mainly were for food, feed until new grain arrives. Sales are just 17.5% of production in Wenling.

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