Dim Sums: Agricultural Markets in China

The overseas Chinese news service, Epoch Times, has reported a serious epidemic of swine fever in the northeastern part of Heilongjiang Province, centered in and around Shuang Ya Shan city. The Chinese press is not reporting it and officials will not talk about it. Gruesome video from New Tang Dynasty TV available here: 新唐人電視台 http://www.ntdtv.com In Jixian County, Yong’an Town, Lianming village previously had over 200 sows that started dying in July, and now there are about 20 left. A villager named Lin said, "Most of the pigs in this area have died. In particular, breeding hogs have nearly all died. There are piles of dead pigs and their rotting offal pollutes the river water. The whole village stinks and it’s hard to breathe." The epidemic is also serious in areas of Jiamusi and Suihua muncipalities. One post on Baidu said, "There is a serious epidemic among pigs near Harbin. Could this be African Swine Fever?" The government is not reporting it, and phone call...

A summit on corn harvest mechanization was held in Shandong Province's Weifang City on September 20. The meeting lauded the great progress, but charged local officials with working hard to achieve the goal of mechanizing at least half of the corn harvest by 2020. Chinese authorities began giving subsidies for agricultural machinery in 2004. The value of output in the farm machinery industry rose from 75.3 billion yuan in 2003 to 230 billion yuan in 2009 (makes one wonder whether the subsidy is for farmers or for farm equipment makers). The degree of mechanization is uneven. Wheat harvesting is said to be almost entirely mechanized. According to the article, corn cultivation is 83.5% mechanized, sowing is 72.5% mechanized, but corn harvest is only 16.9% mechanized. It varies by region. Shandong Province has the highest rate of mechanized corn harvest, covering 70% of corn area. Henan's rate increased to over 40%, an increase of 12 percentage points. Hebei is at 25%. The rate is ...

In comments at a press conference on September 14 , Zhang Xiaoqiang, vice chairman of the National Development and Reform Commission, emphasized China's resolve to keep its grain markets insulated from the world market. While soybean imports continue to soar, Zhang's comments suggest that the leadership intends to keep imports of rice, wheat, and corn at minimal levels. Look for China's corn imports to dry up soon if this fall's corn harvest is good. Vice Chairman Zhang said, "Currently, the country's grain supply and demand are in balance...so we can be assured that no big fluctuation in grain prices will occur." He said this summer's grain harvest is about the same as last year's, and the fall grain harvest will be a little higher. If there are no major natural disasters, China should have an increased grain harvest for the seventh year in a row. Zhang emphasized that grain reserves are very high and the ratio of inventories to consumption is far...

The theme of this year's Shanghai expo is "better city, better life." This slogan also reflects China's growth strategy which concentrates huge investments in magnificent new cities built with the cheap labor of rural migrants who are not allowed to settle down in China's cities. Perhaps feeling somewhat guilty about the massive concentration of wealth in Shanghai and other Chinese cities, a conference on rural income inequality was held in Shaoxing --a couple hours down the road from Shanghai--to dissuage the guilt by at least discussing the widening inequality of income between rural and urban residents. To show how great their concern is, they invited a Nobel laureate, Eric Maskin from Princeton. Maskin noted that "China's fast economic growth has come with side effects, the most notable of which has been an increase in income inequality, especially that between cities and the countryside." The rising inequality is not just incidental to China...

China's agricultural production statistics come out with a one-year-plus lag. However, local surveys are often available in a more timely fashion that open a window on what's happening now. The Nanyang City statistics bureau's planting area survey shows that grain area has risen sharply but vegetables, potatoes, and cotton area down. The data are based on a survey of just 360 farmers in this region of Henan Province, smack in the middle of China, but it seems to be consistent with other pieces of information out there. Sown area in Nanyang City was just under 29 million mu this year. Somehow the farmers in this region increased planted area by 4% this year. I don't know how you increase crop area with cities expanding and roads being built at the current rate in China. Wheat was stable, with area just under 10 million mu, up 0.7%. Corn was planted on 5.47 million mu, up 38.8%. Rapeseed was planted on 4.7 million mu, up 2.6%. Vegetable plantings were 3.46 million mu, do...

On August 27, the National Bureau of Statistics (NBS) released its estimate of early-season rice production . This is the rice crop planted in the early spring (in southern provinces) and harvested in summer. After harvest the fields can be planted with another rice crop or other crops to be harvested in the fall. This year's early rice harvest was affected by the severe drought in southwestern provinces, low temperatures in early spring, and flooding this summer. NBS estimates the early rice crop at 31.32 million metric tons, down 2.04 mmt from last year. That's a decrease of 6.1%. Given all the problems listed above, this is a relatively modest decrease. NBS says 1.6-mmt of the decrease was due to lower yields. Reduced planted area accounted for the other 400,000-mt of the decrease. The early rice yield was down 4.9% from last year. The yield averaged 5,405 kg/ha, down 276.8 kg from last year. In Jiangxi the yield was down 11.1%, in Zhejiang it was down 8.7%, and in Hubei it ...

Hubei Province has plans for cities to store up a 5-to-7-day supply of vegetable reserves . This bright idea, intended to "stabilize" vegetable prices, was inspired by rising vegetable prices this spring and summer. According to the article, there was a shortage of vegetables this spring due to drought and floods in the south, and vegetable prices are 84% higher than in 2007. In the peak seasons of April-May and August-September, Hubei has to bring in 6 million tons of vegetables from other provinces at higher prices than local prices. This program is part of the "vegetable basket" program that has been in place since the early 1990s. Muncipal leaders are responsible for ensuring that their cities have sufficient supplies of vegetables, fruits, and meats. A provincial "vegetable basket risk fund" will be established to finance interregional vegetable sales at certain times. Strict plans will be made to guarantee that cities have minimum supplies of vegetab...