Dim Sums: Agricultural Markets in China

As the 2009 harvest finishes, China's northeastern region has a glut of grain coming on the market, so the central government has announced another round of subsidies to bribe companies to buy the grain at minimum prices. The Farmers Daily announced on November 30 that minimum price procurement policies for northeastern soybeans and corn will be continued. Companies can get a subsidy for each kilogram of soybeans they process, and companies in other parts of the country can get subsidies to transport corn or japonica rice out of the northeastern region. This year, corn's temporary reserve purchase price will be 0.76 yuan/jin in Inner Mongolia and Liaoning, 0.75 yuan/jin in Jilin, and 0.74 yuan in Heilongjiang. The soybean temporary reserve purchase price will be 1.87 yuan/jin [3740 yuan/mt, up from 3700 yuan last year]. The purchase period is December 1, 2009 to April 30, 2010. The notice said the peoples’ government in the northeastern provinces chose soybean crushing enterpri...

The Ministry of Agriculture held a training session for over 100 personnel engaged in dairy quality and safety monitoring. The article describes recovery in the industry. By October, the inventory of dairy cattle had risen 7 months in a row and reached 12.71 million head. Fresh milk output was 2.77 million metric tons, up 6.68%. Since last year 6,377 milk purchase stations have closed or been shut down. There are now 14,016 nationwide. Now there are 11,412 mechanized milking stations, 81.4% of the total, up 31.4 percentage points from last year. In 11 provinces, including Beijing, Henan and Jiangsu, accreditation of milk purchasing has been completed. The Ministry of Agriculture organized 13,129 checks of fresh milk and none had melamine over the specified limits, leather hydrolyzed protein, starch, alkalinity. Since the end of 2008, each level of veterinary stations have cracked down on adulterative substances. Around milk purchase stations and trucks, the two key points, deep launch ...

According to a posting on the China veterinary association site , the Chia Tai Company, known as Zhengda in China, is planning to de-emphasize its poultry business to emphasize its food processing and feed operations. The company plans to reduce the share of its revenue derived from chickens and ducks from 47% to 33%. The company plans to increase the food processing share of sales from 18% to 30-33%. The feed share of sales will be maintained at the current 35% share. The measure is motivated by fears of market risks due to avian flu. Zhengda is one of the biggest players in the meat and livestock businesses in China. The 2004 outbreak of avian influenza had a major effect on Zhengda. It plans to keep its poultry farm in Thailand and purchase additional poultry from outside the company. Zhengda has been operating in China for about 30 years and has over 20 poultry-raising enterprises that have capacity to raise about 100 million chicks annually. The company typically raises chicks on ...

China plans to promote use of crop biomass (straw, stalks, leaves, etc.) as a clean source of energy, for animal feed, and organic matter for the soil, according to an official of the National Development and Reform Commission at a conference held in Anhui Province, November 9. According to the article from Xinhua , last year the State Council issued a document calling for increased utilization of crop residues--the target is to utilize more than 80% by 2015. According to the official, a nationwide plan with a rational regional layout will be set up in accordance with each region's crop biomass residue resources and market demand. Practical pricing, subsidy and tax policies will be studied to promote incentives for different uses of crop residues. "Breakthroughs" in scientific research, use of processing equipment, and energy generation technologies will be developed. The strategy includes companies as the "dragon head," forming a harvest, storage, transportatio...

China still has a system of massive state farms, mostly in desolate border regions like Heilongjiang, Xinjiang, and Yunnan, and on the outskirts of cities. In Chinese, they are known as "reclamation" farms (nong ken) since many are established in desolate areas or on reclaimed marsh, jungle or mountain land. These are holdovers from the central planning period that have now morphed into big agribusiness enterprises. Since they have large scale and access to government resources, they are on the vanguard of many trends. The state farm system held a conference in Beijing this week to publicize its traceability system that involves 50 state farm enterprises and 6 local enterprises in 23 provinces. According to Farmer's Daily , it is an early implementation of the objective of bringing into play a “record-keeping in production, product-tracing in distribution, information retrievability, accountability” system. During November 7-14, the Ministry of Agriculture’s state farm bu...

Wage statistics are one of China's "dim sums" that don't reflect reality. Farmer's Daily says The National Bureau of Statistics announced that it will begin to include private firms and small businesses in its survey of wage statistics. Current statistics are based on surveys that include only government, quasi-government service units, state-owned and collective enterprises. In 2008, the average urban salary was reported as 29,299 yuan, but a survey of private enterprises found their average was just 17,071 yuan, 58% of the reported average. The statistics clearly don't reflect actual earnings of "the masses." The former survey only covered 110 million urban employed persons. At the end of 2008, it was estimated by NBS that private enterprises employed 66.76 million. It is estimated that there are 50 million small merchants (ge ti hu). The change is being made partly because the common people ("old hundred names") don't believe officia...

China is emphasizing large-scale production that standardizes varieties and techniques, introduces branded products, and consolidates scattered plots into big fields. The latest big project is to create large-scale vegetable farms. Watch out California! The Ministry of Agriculture launched a new plan to set up a nationwide network of 400 standardized vegetable farming areas over the next two years. At a rally held in Yinchuan, capital of Ningxia Hui Autonomous Region in northwestern China, the director of the MOA's crop production office said MOA will set up 200 standardized vegetable farming areas (the Chinese word is "yuan," or garden) that have fields of 200 mu (33 acres) or more, and another "open-field" vegetable farms with fields of 1000 mu (165 acres) or more. In these projects the production will be standardized (using same varieties and production methods), pest and disease control will be unified, and all vegetables will be grown for the market (not fo...

An article entitled, " Main characteristics of our country’s new-style grain reserve system ," seems to be aimed at assuring the Chinese citizenry that plenty of grain is on hand and the government is wasting much less money on storing it than in past years. The article says China must have "grain reserves with Chinese characteristics": massive grain reserves that are getting even bigger, stored in bins all over the country, and owned by the government. The article tells us that China needs these massive grain inventories because it has a big population, is in the midst of rapid industrialization and urbanization and because of the small-scale pattern of grain production. Reserves are needed to guarantee food security and intervene in the market to stabilize prices. Reserves are held by two levels of government: central and local. The central grain reserves are used to make interregional adjustments in grain markets under the State Council's instructions to cent...