Dim Sums: Agricultural Markets in China

A team from the China Grain Net reported on a tour of rice-producing areas in Hunan and Jiangxi Provinces last week. The team found that rice supplies are tight in the region. At a grain depot in Hunan's Xiangtan County, a trader said that there is only a little late-season rice from last year in the market that is bought sporadically at 1.38 yuan per 500g. In northern Jiangxi Province rice mills complained that the business is very tough this year. Prices they pay for paddy rice are up and profits are virtually nil. Rice mills in Jiangxi and Hunan have been buying modest amounts of cheap rice from Vietnam and Pakistan as a cost-saving measure to mix with local rice. However, the quality and taste of the cheap imported rice--mostly from Vietnam--is poor and is not well-received by consumers. They use no more than a 20% proportion of imported rice.  According to the reports, rice mills are afraid to use a lot of it because it might harm their brand's reputation. In Jiangxi, th...

The National Bureau of Statistics (NBS) reports that 245 million rural people are employed in nonfarm activities , up 10 million from last year. Their average monthly earnings from nonfarm employment were up 21% from last year, suggesting rapid growth in wages (average hours of work decreased). The numbers reflect an exodus out of agriculture and rising opportunity cost of labor in farming. Each year NBS surveys 200,000 rural laborers from over 7500 villages in 899 counties to ascertain the number and characteristics of rural people engaged in nonfarm employment. The survey total includes rural people engaged in a nonagricultural job or business for at least 6 months of the current year. It includes migrants working outside their home township and people employed near home (in their home township). Source: Dimsums chart created using data from National Bureau of Statistics.  Nonfarm jobs are primarily in urban areas, prompting a huge migration of itinerant worker...

One of the "dirty" secrets of China's pork industry is the widespread degradation of water quality. The advantage of pigs--and the reason they are the source of over 60% of meat in China--is that they can and do eat just about anything. Their disadvantage is that their digestive system is inefficient. Lots of undigested matter comes out the other end. In past decades pig manure was spread on fields as organic fertilizer. But in the age of concentrated pig production--hundreds of pigs in a single location--the manure is concentrated. Plus, you have to clean out pig facilities to keep them sanitary and prevent disease. This requires lots of water which has to go somewhere after the cleaning is done. This blog reported on pig pollution last year , again exactly one year ago , and in 2010 . Many localities have tightened up regulations on pig farms  and the Ministry of Environmental Protection called attention to the problem in 2010 . Officials show visiting delegations nic...

An article in a journal for communist officials ( Chinese Cadres Tribune ) offers a policymaker’s view of China’s commodity supply and demand situation and outlook. The article includes some worries but seems to be relatively optimistic. The author anticipates that rice consumption and production will remain in balance, China will have an excess supply of wheat and a modestly-growing deficit in corn and vegetable oils. The author, Cheng Guoqiang, is an agricultural economist with the State Council’s Development Research Center. The article, “current situation and medium and long-term trends in our country’s grain supply and demand,” is a tutorial for communist party officials on China’s food security situation. The article reports a massive 140-metric ton increase in grain output over the past 8 years, an average increase of 17.5 mmt per year. Cheng says the annual growth in grain output averaged 3.1%, faster than the average growth from 1978 to 1999 and faster than the world ...

In 2004, China introduced a price support program for rice. Later this "minimum price procurement" was extended to wheat. In 2008 and 2009 intervention plans were introduced for corn, soybeans and rapeseed. Under these programs, companies commissioned by the government buys up commodities when the market price falls below the support price set by the government each year. The government pays the company to buy and store the grain and it is later auctioned off, always at a higher price than the company paid. Initially, the state-owned reserve-management company, Sinograin, was the single buyer of grain and oilseeds under the price support program. In 2010, the government decided to give Sinograin some competition by allowing three other state-owned companies--COFCO, Chinatex, and China Logistics--to participate in price support purchasing. However, this year that decision has been reversed. Sinograin will again be the sole buyer of grain and oilseeds for the price-support pr...

When China joined the WTO, its leaders designed a "decoupled" grain subsidy policy. Because the subsidies are handed out on the basis of a fixed land-holding (in most cases) and theoretically do not "distort the market," WTO rules allow China to exclude these payments when they calculate how much government support they are giving to agriculture. While the government hails its policies for boosting grain production 8 years in a row, on the ground the payments are widely acknowledged as ineffectual and act as a tiny entitlement for the rural population. After nearly a decade the subsidies have some perverse outcomes. In 2011, a Chinese researcher and commentator on rural affairs called for eliminating grain subsidies. His article, " Grain Subsidies Are Not as Good as Raising the Minimum Procurement Price ," takes journalists to task for reporting marvelous benefits of subsidies when in fact they have virtually no impact on grain production or farmer incom...

Since last year China's swine farms have been having serious problems with diarrhea. A recent article describes the symptoms and treatment in much more detail than you want to know (unless you are a veterinarian working on a pig farm in China). The description of the disease is an example of the trend toward more complex diseases that are not only increasing in prevalence but are hard to treat. The highest incidence and highest mortality rates of diarrhea are among young piglets. Newborn pigs stop nursing, become listless, and then their body temperature drops. They develop serious diarrhea: yellow, white, yellow-green, gray and watery, smelly. Some pigs have vomiting, weight loss, pale skin. Some get purple orchid-shaped spots on their skin and purple ears. Piglets can start dying two days after exhibiting symptoms. Piglets 15 days older or less have a very high death rate, some pig farms 100%. Diseased pigs are thin, their hair is dull, and their skin is white. Sows ...

One of China’s flagship farm programs is a subsidy to encourage farmers to purchase improved seed strains. Officials and news media depict it as a glowing success that has encouraged backward farmers to buy commercial seed that raised yields and standardized products. However, the news media seldom report widespread complaints about the program from farmers, seed merchants and village officials. It seems that in many areas the seed subsidy was hijacked to become a honey pot for local agricultural officials and the seed companies historically associated with the agricultural bureaucracy. Some critics accuse the program of hindering the spread of quality seeds and even raising costs for farmers. The Ministry of Agriculture made adjustments to the program but problems seem to persist in some regions. An Investors News 《投资者报》 article, “ Fine Seed Subsidy Pulled into the Quagmire of Competing Interests ,” posted on an agricultural news site in February (although it seems to have be...