Dim Sums: Agricultural Markets in China

In a press conference this week , Vice Minister of Agriculture Zhang Taolin admitted that agriculture's contribution to water pollution in China is "relatively serious." Zhang cited the communique from the first census of pollution sources which showed that agriculture accounted for 43.7 percent of chemical oxygen demand emissions in 2007. Agriculture also accounted for 57 percent of nitrogen and 67 percent of phosphorus pollution entering bodies of water. Mr. Zhang said the volume of emissions from agriculture and their contribution to overall emissions are controversial among scholars. The pollution communique was released in February 2010. It apparently took more than a year to compile and release the brief report on data for 2007. The dimsums blog reported the agricultural pollution numbers  February 17, 2010, more than two years ahead of Vice Minister's pollution confession. Vice Minister Zhang explained that nonpoint pollution from agriculture comes from o...

The early rice crop now coming on the market in southern China has been hit by weather and pest problems. A July 30 posting on China Grain Net's " 360-degree early rice purchase " microblog said, "early rice output is not optimistic." The problems are attributed to cool, wet weather during the key growing period of May and June. The Ministry of Agriculture held training sessions earlier in July to provide guidance for dealing with the pest problems but the crop appears to have been hurt by the unusual pest pressure. There are differing reports on early rice prices. One microblog post said the price started out high and is stable. Another post said prices are on a rising trend. He says the price in Hunan is 135 yuan/50kg, well above the government's minimum of 120 yuan and could go higher. This year's 120-yuan minimum was already 17 percent higher than last year. The microblogger recommended that buyers pay attention to quality. Another posting from ...

On July 20-21 Chinese agricultural officials from all over the country assembled in Jiamusi, Heilongjiang Province, to hear Vice Premier Hui Liangyu give a speech urging them to push forward with "agricultural modernization." The speech seems to be a signal that China is moving toward high-tech capital-intensive agriculture. This was reinforced by the post-meeting visit to the nearby high-tech "Friendship Farm" where huge fields are tended by airplanes, helicopters and massive tractors. Chinese officials have been talking about "modernizing agriculture" since the 1980s when Deng Xiaoping proclaimed the mantra of "four modernizations" to guide the country post-Mao. The idea was to get away from ideological excesses that produced the disastrous cultural revolution and great leap forward to an era of pragmatism in which technological improvement would replace ideological purity. The rhetoric in Chinese documents hasn't changed that much since...

The 2012 survey of 600 farms in Henan Province reports that profits from wheat production are rising slowly and complains about rising input prices. Misleading calculations suggest that Chinese farmers are impoverished. However, if the calculations are done correctly one finds that Chinese farmers actually do pretty well since they only spend a few days a year in their wheat fields. The survey identifies three major cost components: material inputs, services (mainly mechanized ploughing, seeding and harvest), and labor. Most of the cost increase was due to rising prices of fertilizer, seed, and pesticides. Labor costs went down slightly and service costs went up slightly--basically offsetting each other. The cost of material inputs was 226 yuan per mu, up 39 yuan from 2011. The price of all inputs was up. Fertilizer accounted for most of the increase in cost, rising 27 yuan this year. Seed costs were up 9 yuan and pesticide was up 2 yuan per mu. The price of seeds at planting time...

A 10,000-head pig farm may also support 7,000 rats, according to an article in Southern Rural News last week. The article is an advertisement for pest control companies disguised as journalism, but it raises another potentially serious problem related to the complex business of raising livestock. The article suggests that Chinese pig farms lose large volumes of feed to rats. They chew holes in feed bags and eat significant quantities of grain. Moreover, the holes in the bags can promote growth of mold and toxicity in feed that's not eaten by rats. A representative from a rat control company estimates that a 10,000-head swine farm could be feeding rats 200 kg of grain daily or 73 metric tons a year if each of 7,000 rats eats 20-to-30 grams a day. He warns that rats also chew up pipes, wires and heating equipment. A more troubling prospect is the potential for rats to spread disease. They carry parasites and their droppings can contaminate feed, fodder, equipment and barns. T...

The drought in the United States has created a lot of buzz in China and has been pushing up feed prices there. The landed cost of imported corn is reported to be about 2500 yuan/metric ton, comparable to domestic Chinese corn prices . Chinese corn at northeastern ports is 2410 to 2430 yuan per mt and the price at ports in southern China is 2540-2560 yuan/mt. According to one report, the quality of corn coming from the northeast has declined and there is upward pressure on domestic prices. The most significant impact is a surge in Chinese soy meal prices that began in early June and accelerated this month. The futures price rose from 3100 yuan/mt to 4100 yuan/mt over that period. Feed production has been booming this year. Recently-released feed statistics show that compound feed production in China during the first six months of 2012 was 53.2 million metric tons, up 20.8 percent from last year. This large increase partly reflects a low base last year due to disease problems in t...

According to data collected from 733 plots in Shandong Province, wheat planted using conservation tillage had yields that were 8.7% higher than wheat using traditional methods. The yield from wheat under conservation tillage was 490.5 kg/mu (7357 kg/ha), 39.5 kg higher than traditional methods. There was a big campaign to introduce conservation tillage last year. Techniques include subsoiling, ploughing wheat straw into the soil, no-till with precision seeding, stratified fertilization and treating seeds with fertilizer. There is a subsidy for subsoiling which typically requires expensive equipment. Agricultural bureaus have been giving training to members of agricultural machinery cooperatives. The provincial agricultural machinery bureau and agriculture department distributed suggestions for spring that included topdressing with fertilizer and spraying pesticides and herbicides. Experts check on wheat under "conservation tillage" in Shandong.   Source: Shandon...

Chinese retail prices for peanut oil are up about 10 percent from last year. One industry analyst cited increased consumption of peanuts as snack food for the higher prices. This leaves fewer peanuts available for  cooking oil. Normally, about 60 percent of peanuts produced in China are crushed to make cooking oil and 40 percent are consumed directly as food. However, now the ratio is about 50:50. Another reason cited is rising production costs for peanuts. Peanut oil is an expensive oil in the Chinese market and its share of the market is small. One lady interviewed at a supermarket said she would substitute other oils for peanut oil. Another said she would cut back on her purchases of cooking oil, a decision she described as good for her health. Meanwhile, rising prices of imported soybeans have been pushing soy oil prices higher since June. In early April, the National Development and Reform Commission asked vegetable oil processors to keep their prices steady. However, ...

A journalist's investigation of organic food products reveals the confusion and cheating that undermine confidence in "organic" foods that are now commonly on offer in Chinese supermarkets. The journalist visited supermarkets, interviewed farmers, traders and regulators in Shandong and Guangxi and found that consumers have only a vague idea of what "organic" means, supermarket labels play fast and loose with "organic" labels, and fraud is common. When the journalist asked twenty shoppers in a supermarket what "organic food" means, he received a variety of answers: "the package is marked organic," "the price is higher," "healthy, nutritious, without contamination." The journalist suggests that consumers' sketchy understanding of what organic means makes it hard to verify that foods really are organic. Sign on shelf says "organic vegetables" but no certification label on package. Some foods...

The Chinese news media seems to be laying down a propaganda barrage about professional farmers, land rentals, cooperatives and large-scale farming. Could this be preparing the way for a change in rural land policy? On July 10, the Chinese central broadcasting service reported on the difficulties agricultural cooperatives encounter in renting land --land holders will only rent land short-term, which means cooperatives are at risk of losing access to the land they rent. The article focuses on a district in Taizhou, Zhejiang Province, a region where many villages have rented most of their land to large-scale farmers or cooperatives. The leader of one cooperative points to a hillside which he says used to be covered with grass but the cooperative has "put a lot of thought" into building infrastructure and roads to transform it into a productive farm. However, the cooperative's rental agreement is about to expire and the villagers plan to rent the land to someone else. ...

China's National Grain Bureau last week announced that it will carry out a special statistical survey of companies that process corn. Presumably, this is another measure designed to rein in the aggressive expansion of corn consumption by industrial processors. The survey will cover enterprises that produce starch-based products and alcohol made from corn in major corn-producing provinces: Hebei, Inner Mongolia, Shandong, Jilin, Heilongjiang, Liaoning, Henan, Anhui, Shanxi, Shaanxi, and Ningxia. Companies have to report their processing capacity, volume of output, exports, average prices, profits, planned expansions, and use of corn per unit of final product. They have to report energy use and environmental impact--two factors that are often cited in government documents as criteria for shutting down plants in order to trim excess capacity. The survey apparently is intended to address problems with inaccurate (perhaps falsified) statistical reporting. The survey is described as...

In January, the dim sums blog reported on the campaign announced by  nine Chinese departments to conduct a national audit of pork slaughterhouses to clean up the industry. According to authorities, the program is progressing nicely. But the process of cleaning up the industry is more complicated than it seems. China's pork industry shows a strong tendency for "unsafe" food to crowd "safe" food out of the market. At a meeting in June, Vice Minister of Commerce Jiang Zengwei gave an update on the audit program . He said 4141 slaughterhouses had passed their audits, 994 are undergoing rectifications, 71 lost their qualification as a "designated slaughterhouse," and 93 had been closed. There were another 563 that had not yet been checked. The audits are checking on sources of water, equipment for processing and cutting pork, disposal of carcasses and waste, and making sure that animal inspection certificates are in order. Shanxi Province reports stati...

Chinese officials have lost patience with ignorant, lazy farmer/peasants who farm in a lackadaisical manner. This year's "Number 1 document" called for replacing these "traditional" farmer/peasants with "new-style professional farmers" ( 新型 职业农民)  who have education, training, and commercial skills. An opinion article published last month in Farmers Daily described this as a new change related to the increase in off-farm employment, aging of the farming population and the urbanization-industrialization-modernization of agriculture (the new "san hua" slogan). The Farmers Daily writer explains that most people engaged in farming don’t rely on agriculture for their income, have low education, often leave land untended and are not motivated to become sophisticated managers. Professional farmers who specialize and operate on a larger scale are more inclined to adopt new technologies, have lower production costs, higher yields and better feed-co...