In an online article on February 1, Minister of Agriculture Han Changfu laid out China's grain strategy for the twelfth five-year plan. The plan is ambitious, complex, multi-pronged, innovative in some ways, entails significant government intervention and essentially aims to reshape Chinese agriculture from a primitive peasant activity to an industrial sector.
Han describes the next five years as a crucial period for transforming the Chinese economy. He reports that Party leaders have clearly stated that grain security is of the highest importance for national security and maintaining peoples' livelihoods. Han reports that China faces many resource constraints--shrinking land and water resources--and cannot rely on international markets to feed its massive population.
According to Han, "The Chinese peoples' rice bowl cannot be in the hands of others." Han says that China must rely on the principle of basic self-sufficiency to maintain grain security. He acknowledges that "some comrades say importing grain is like importing land and water," but Han insists that China cannot become dependent on imports; China can only use imports "as an adjustment mechanism." He maintains that China must adhere to the basic strategy of 95% self-sufficiency in basic grains like rice, wheat and corn.
Han then launches into a long report on China's grain development strategy for the next five years.
The basic supply-demand situation, as reported by Han: wheat is in surplus, corn is in balance, rice is "tight," japonica rice is in deficit. The japonica rice deficit is being addressed by converting land into rice paddy in the northeast and switching from indica to japonica rice in provinces like Jiangsu and Anhui. Other projects include spreading high quality wheat varieties, raising corn yields and spreading special-use varieties, increasing high oil content soybean varieties, preventing loss of soybean area in the northeast, developing soybean production in the Yellow-Huai River region, and spreading intercropped soybeans in the south.
Cultivated land area is to be held at the "red line" of 1.8 billion mu and grain area at 1.6 billion mu. Most of the increase in production will come from raising yields and productivity. There is an ambitious set of projects listed that include breeding, spreading technology, upgrading fields and infrastructure, mechanization, and subsidies.
Traditionally, southern China was the country's breadbasket, but now the focus is on the north--especially the northeast and Inner Mongolia--to feed the rest of the country.
The 31 provinces are classified into 13 grain-surplus provinces, 7 grain-deficit, and 11 balanced provinces. Efforts will be concentrated on the surplus provinces and on about 1,000 grain-surplus counties. But none of these areas can relax grain production, "grain production must not be allowed to fall again."
One strategy underway is to create 400 million mu of "high-standard" fields. By improving fertility, building irrigation channels, using water-saving irrigation equipment, small-scale rain-collection facilities, building roads for cultivation and harvesting machinery, returning organic matter to the soil, leaving straw and stubble on fields, and treating continguous plots as a big field authorities think they can raise yields 100-200 kg (per mu?).
Since "seed is key to increasing grain production" an overhaul of China's weak and chaotic seed industry is planned. This entails more regulation and government guidance to create a set of large companies as industry champions with large subsidiary production bases, combined production and research, nurturing an integrated modern crop system, with national seed industry science and technology innovation capability. Note "national" seed industry--multinationals need not apply unless they plan to turn over their technology to a Chinese partner who will breed seeds with Chinese characteristics and Chinese patents.
The strategy calls for big development of a new professional pest control and prevention system that was launched last year. It seems to involve setting up pest control stations that disseminate biological pest control techniques. Authorities reckon China loses 6-to-7 million metric tons of grain to pests each year.
There is a new farmer training program designed to retrain elderly farmers left in villages emptied of young people. They can get a "green certificate" from free training. The program aims to develop "new-style farmers" that include larger-scale farmers, machinery entrepreneurs, and science experts. training will support farmer cooperatives and dragon head enterprises and encourage migrants to return home "with technology and capital" to start rural business ventures.
Mechanization is another mainstay of the modernization strategy. Subsidies for machinery purchases will be strengthened. The focus is on mechanizing rice-transplanting, corn harvest, and subsoil preparation.
Han concedes that science and technology alone cannot raise grain production. They have to pay attention to the price mechanism. In the past administrative methods were used to push farmers to plant grain; now farmers must be enticed by subsidies and high prices.
Han says prices are most important to enticing farmers. Authorities have to balance the interests of farmers and consumers to find a suitable price. The price for grain is to be raised steadily year after year, following costs, but not rising so much it ticks off urban consumers. Some new policies may be on the horizon: Han says "we should learn from foreign countries' experience and explore target price policies."
The "four subsidies"--direct payment for grain producers, quality seed subsidy, general input subsidy, and machinery purchase subsidy--will be strengthened and improved. The direct payment will be raised and adjusted to mobilize farmers' enthusiasm; the seed subsidy will be raised and spread to more crops. Subsidies will be "tilted" toward larger farms and cooperatives.
Chinese authorities are also using intergovernmental transfers to entice local officials to make sure grain production doesn't fall off. The financial awards to grain-surplus counties will be increased, and government investment funds should be "tilted" toward grain-production counties. Officials are setting up an interregional compensation mechanism that will match up grain-deficit and -surplus counties and ensure that production areas "don't eat losses." Officials are to get both political recognition and financial awards for making sure their farmers "grasp" grain production.