Wednesday, April 13, 2011

Reports from Rapeseed Fields

Rapeseed is planted all over central China along the Yangtze River. It produces flowers in the spring and its seeds are crushed to make vegetable oil. April is a key period for the rapeseed crop's growth, and field reports from Hunan, Hubei, and Anhui Provinces on the crop offer a window into how the growing economy is affecting agriculture.

Lack of labor for farm work and rising wages are a major theme in all the reports. In northern Hunan most young people have left the villages and wages are up. A reporter noticed that the fields were full of weeds and rapeseed plants were uneven. A farmer explained that the old people still doing farm work don't want to spend the time and labor to transplant seedlings in straight rows, so they had been broadcasting the seed in the fields. Transplanting gives a higher yield, but it takes more labor.

In a major producing-region in southwestern Anhui big fields are planted in straight rows, but labor is an issue here too. The nearby city had built an industrial park that consumed large tracts of farmland. Many farmers had gone into the city to earn 80 to 100 yuan per day. Net earnings from planting a mu of rapeseed are estimated at 100 to 200 yuan, about the same as could be earned by renting out the land and slightly more than a day's wages.

Rapeseed fields in Anqing, southwestern Anhui Province

Farmers often choose to plant the crop that has the least labor requirement. In Hunan the farmers like to plant rapeseed because it doesn't take much labor. Once it sprouts it doesn't need much care. Cotton prices are high, but it also requires more spraying of pesticides than does rapeseed.

Wuhu, a region of central Anhui, is a major region for growing rapeseed, rice, and wheat. Farmers say rice grows well when it's planted after a rapeseed crop, but many are switching to wheat because it is mechanized and requires even less labor--3-to-4 days per mu versus 6-to-7 days for rapeseed. In the Wuhu area, rapeseed is often grown to make oil for home cooking--farmers don't earn much profit by selling it. Another influence is the subsidy--about 47 yuan per mu for wheat versus only 10 yuan for rapeseed in the Wuhu area.

Rapeseed planting last fall was down in most areas, an average of 19% according to one estimate. This reflects relatively low prices last year. The government set support prices for rapeseed the last three years and commissioned local companies to buy rapeseed and oil and store it in reserves. Reserve purchases totaled 2.4 million metric tons (mmt) in 2010, 4.4 mmt in 2009, and 1.5 mmt in 2008. With production down this year and vegetable oil companies expanding, a scramble for rapeseed and rising prices are expected this spring. The government is not expected to offer a support price. The rising market price will push the price of rapeseed oil higher, to over 11,000 yuan/mt by one estimate.

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