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You can't grow more of everything

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, down 3.6%.
Cotton was planted on 1.54 million mu, down 3.4%.
Potatoes were planted on 858,000 mu, down 8.7%.
Tobacco was planted on 309,200 mu, down 9.3%.

According to the report, the general trend is for grain to go up, and "economic crops" to go down. It cites subsidies and rising prices for increasing grain production. Per-mu returns from grain are about equal to returns from "some" economic crops this year and higher than some others. Corn prices are up about 20% this year. The report doesn't mention it, but rapeseed also had a support price and a fungus was found on Canadian canola to keep it out of the market.

On the other hand, declining cotton prices and its high labor requirements have discouraged farmers from planting it.

The surge in grain area is probably linked to the big concern about lack of vegetable supply and rising vegetable prices that led to the State Council's call for policies to support vegetable production. If you plant more grain, you have to give up something else.

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