Tuesday, November 27, 2012

Zhejiang Rice From Northeast Fields With Subsidies

Zhejiang Province is giving subsidies to ten business entities who grow rice in northeastern provinces. The Zhejiang Grain Bureau compiled a list that includes rice-milling companies, cooperatives and large-scale farmers who planted a combined total of 15,700 acres of short-grain rice in the northeast. According to the list, the production bases are in 14 villages in Jilin and Heilongjiang Provinces and most projects were set up in early 2012 or 2011. They are set to run for 5 to 20 years.

This is a new initiative by Zhejiang--China's richest province but also short of farmland--to encourage large farming entities to grow grain in other provinces and transport it back to Zhejiang. Each company has a quota of rice and gets a subsidy of 100 yuan per metric ton for within-quota rice and 120 yuan/metric ton for over-quota rice. The subsidy appears to be to cover the costs of transporting the rice back to Zhejiang. The producers are expected to sell the rice themselves in Zhejiang.

According to the Zhejiang Daily's explanation of the program, Zhejiang is deficient in rice and relies on other provinces for much of its supply. Hangzhou, the capital, consumes 3.5 million metric tons of rice annually, all of it coming from other provinces (34% from the northeast, 30% from Jiangsu, 28% from Anhui). The Zhejiang Grain Bureau says the province set up production bases of 500,000 acres outside the provicne last year.

The total program is capped at 60,000 metric tons and 6 million yuan of subsidy funds annually. The program is expected to bring 47,000 metric tons of rice to Zhejiang this year.

Zhejiang's Grain Bureau is also paying local farmers extra subsidies to deliver their rice to them. In Shaoxing, another Zhejiang city, the Grain Bureau has signed up over 190 farmers to deliver 7700 metric tons of local rice under contract this fall, a four-fold increase from last year. These farmers get a subsidy of 300 yuan per metric ton in addition to the sale price for rice sold to the local grain reserve.

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