Dim Sums: Agricultural Markets in China

China's agricultural policies are getting a lot of criticism for corruption and their role in rendering Chinese commodities internationally uncompetitive.  A reporter recently interviewed some farmers and summarized the response as, "While the minimum procurement price policy is not bad, the price is generally low and farmers' income is not high." The National Development and Reform Commission recently bragged that it had raised the minimum price for rice 92 percent and the minimum wheat price 57 percent since 2008, and linked these price increases to the increase in grain output over the past six years. However, the NDRC also indicated last week that it plans to seek improvements in price support and subsidy policies to enlarge the role of the market mechanism, increase returns to farmers, and promote stable increases in grain output. A Xinhua News Agency analyst named Ma Wenfeng said the minimum price policy doesn't benefit grain producers that much--the b...

More Chinese people are growing their own food without pesticides and chemical fertilizer because that's the only way to avoid eating unwanted chemicals. Many rural families have a small garden plot where they grow vegetables for their own family's consumption using no chemical pesticides and applying only manure as fertilizer. One grandmother in Jilin grows greens, potatoes, onions, fruit trees and keeps chickens that eat only rice bran, corn meal, wild grass and insects. She explains that the garden plot is her family's "protection area" where she can grow food for her six-year-old grandson and other family members that they know is free of toxic chemicals. She knows that neighboring farmers make heavy use of dangerous pesticides and there is no guarantee that food bought in the market is safe to eat. Another farmer explains that vegetables grown with chemical fertilizer have no taste. Chickens raised on commercial feed lack their traditional flavor. Even ...

A commentary in the No. 1 Financial Daily newspaper says that international investors' concerns about China's government and "shadow banking" debt are misplaced. The real problem, says the paper, is corporate debt which totaled 6.5 trillion yuan at the end of 2012. The paper said corporate debt is the largest, fastest-growing, and most-risky segment of debt in China. Corporate debt is equal to 122-127 percent of China's GDP, a ratio that is double the 50-70 percent ratio in OECD countries. The paper called it a much more serious "hidden danger" than government or shadow banking debt. The run-up in debt since 2008 results from heavy investment in fixed assets with low net returns. The debt is concentrated in real estate and construction sectors. The debt-asset ratio for companies listed as A-shares on China's stock exchange rose from 53 percent in 2008 to 60 percent now. The debt of the largest companies has risen the fastest, more than 300 perc...

Just like people, animals need a healthy diet to grow muscles, give milk or whatever. China's dairy industry neglected this basic fact when it began expanding by 15-20 percent annually during the early 2000s decade, and the result was undernourished and often diseased cattle that gave low quality milk. Milk was watered down and laced with melamine to fool protein tests and babies died, undermining confidence in the product that still hasn't been restored. Now Chinese dairy farms and officials are paying more attention to the quality of feed for dairy cows. In 2012, the Ministry of Agriculture launched a program to boost production of alfalfa, a clover-like plant that is used primarily as a feed for dairy cattle. Compared with other types of hay/forage crops, it produces high yield and has rich nutritional content. On June 7,  China's Ministry of Agriculture held an alfalfa development promotion activity  in Jinzhou, Liaoning Province, to draw attention to the campaign. ...

Chinese authorities are trying to removed diseased and dead pigs from the food supply. This blog has reported on a number of local crackdowns on illegal butchers over the last few years and the problem is getting more attention following the appearance of dead pigs in Shanghai's Huangpu River earlier this year. In Zhangzhou, a small city in Fujian Province, authorities discovered a dead-pig-selling operation operated by two village ladies who were in charge of the "sanitary" disposal of dead pigs in their villages. According to allegations in a news media article, last August a lady named Lin began butchering and selling pork from the dead pigs she collected for disposal. In January of 2013 she joined up with another lady to sell dead pigs and they hired three migrants from Henan Province to work for them. They paid 0.2  to 1.6 yuan per kg for the pigs, butchered them, packed the pork in 20-kg boxes and stored it in a frozen meat locker. They quickly filled the 6,000-k...

The head of China's statistics bureau ordered statisticians to stop using methods that introduce innaccuracies in grain statistics. In doing so, he reveals some of the problems that plague China's statistical system. On June 9, 2013, Ma Jiantang--commuist party chief and director of China's National Bureau of Statistics--was inspecting the summer grain crop in Anhui Province when he called for local statistical survey personnel to ensure the correctness and truthfulness of statistics on grain output. His comments implicitly reveal some of the problems with the statistics. Actually, China's grain statistics are among the few agricultural data items that are estimated with statistically sound survey methods. Most agricultural data is still reported up from level to level using administrative methods. But for grain crops, the statistics bureau selects a national sample of villages and plots of land and sends out survey teams to collect cuttings from ...