China's farm subsidy program targets local officials as well as farmers. Since 2005, top grain-producing counties have been eligible for subsidy "award" payments for the county treasury. The payments generally amount to 7-to-10 million yuan (about US$1-to-1.6 million). Initially this was a payment to fill in financial holes in poor agricultural counties, but later officials added criteria that include the amount of grain produced, commercial sales, and planted area to motivate local officials to boost production. There is an extra payment for the top "super" grain counties. More grain output increases the chances of getting these payments.
An article from the China Management Net, "The Flip Side of Ten Straight Increases in Grain Production: Pollution and Imports," implicates this county subsidy for motivating local officials to push out soybeans in favor of corn mono-cropping.
According a Ministry of Agriculture report quoted by the article, "Some counties in Heilongjiang Province enthusiastically push production of corn instead of soybeans in order to get the cash award. The corn yield is 425 kg/mu while soybeans yield just 125 kg/mu. Switching land from soybeans to corn increases the 'grain' yield by 300 kg." The report says it is common among county officials in northeastern provinces to induce farmers to switch crops in pursuit of pure volume in order to improve their chances of getting the grain county "award" payment. The potential impact on the environment is ignored.
The pursuit of grain volume damages the environment in other ways, said the article. In Heilongjiang much land that used to be planted in soybeans and spring wheat--which require little or no irrigation--is now being planted in japonica rice paddies which require large amounts of water to flood and irrigate. Thus, Heilongjiang's agriculture used to worry about floods but now farms are putting stress on the province's water resources. In southern regions, farmers use large volumes of chemical fertilizer to maintain high rice yields, but the crops absorb only about 35 percent of the fertilizer with the other 65 percent going into the soil and water systems.