Monday, December 26, 2011

Heilongjiang: The National Granary

Propaganda from Xinhua News Service describes Heilongjiang Province as "granary under heaven" and provincial champion in grain production. The article refers to the recent "economic work conference" and describes Heilongjiang's production and sale of grain as a bright spot in the economy and a base for economic growth.

Heilongjiang is a sprawling province in the far northeastern corner of China that has a relatively low population density (since it was settled much later than other parts of China) and a rich black soil that makes it an agricultural powerhouse. Heilongjiang has a system of large mechanized state farms -- known as "reclamation areas" in Chinese government-speak -- set up in the 1950s as a buffer against Russian incursions. Two prominent state-owned agribusiness companies emerged from the province's state farm system: Beidahuang--the "great northern wilderness"--and the vegetable oil company "Jiusan" which is short for "management bureau no. 93."

According to Xinhua, Heilongjiang's progress in raising crop yields contributed a substantial share to China's unprecedented string of increases in grain production in recent years. According to the chairman of the Provincial agricultural commission, Heilongjiang's grain output rose from 34.65 million metric tons (mmt) in 2007 to 55 mmt in 2011. A target of 75 mmt is set for 2015.

The article also emphasizes that a high proportion of Heilongjiang grain is sold to the market. The chairman of the provincial agriculture commission claims that 50 mmt of grain was sold into the market this year. This is an unusually high proportion in China where farmers generally retain most of the grain they produce for their own consumption on-farm.

Chinese authorities view Heilongjiang as a source of grain that can meet the demands in other regions of China where demand exceeds the local supply. The vice director of the provincial statistics bureau estimates that Heilongjiang's grain can support 240 million people nationwide. He says Heilongjiang uses one-tenth of China's grain area to produce one-fourth of the commercially-sold grain, supporting one-sixth of the Chinese population's grain consumption.

The Xinhua article describes Heilongjiang as the stabilizer that guarantees food security. It says the province has  supplied 45 mmt of grain to the rest of the country since 2006. According to the article, three days after the 2008 earthquake in Sichuan, Heilongjiang milled 2.4 mmt of rice to supply the earthquake-ravaged region with food.

The article emphasizes the contribution of science and technology to Heilongjiang's increase in grain output, signaling the strategies being pushed by authorities in the current five-year plan.

Mechanization is one of the factors emphasized. Heilongjiang has 558 agricultural machinery cooperatives which purchased large tractors and combines and signed contracts to provide services to farmers. According to Xinhua, the total power of agricultural machinery has increased 45.7% since 2007. According to the article, mechanization breaks the bottleneck of traditional man- and animal-power and allows a "rush" to plough, sow and harvest at the time when temperature and soil conditions are best. A related campaign has been to promote deep-ploughing in the fall which facilitates early planting in the spring.

Irrigation is another emphasis of the article. The reporter describes a large framework of pipes in the fields that deliver water to corn plants at key periods of the growing season. In a model farm district, they claim that irrigation has raised  yields by about 50%. According a provincial official, Heilongjiang has initiated a major water project that includes 38 large pumping stations.

The article claims that improved seed varieties are planted on 98% of Heilongjiang's land. The article also refers to pest control advisors and "precision" cultivation.

Chinese authorities seem to remain in crisis mode over commodity price inflation even though food prices seem to have stabilized or dropped since October. They rushed out a massive grain production statistic (normally the grain production statistic is not announced until January) and the official media have been putting out cheerleading articles like this one to announce their great success in grain production. At the same time, rumors say that a series of large purchases of U.S. corn were made to refill state reserves. Are the grain bins emptier than officials are letting on?

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