Skip to main content

Counties Mono-cropping to Get Subsidy?

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.

Comments

Popular posts from this blog

China's Vanishing Soybean Self-Sufficiency Rhetoric

Chinese propagandists appear to have given up on soybean self-sufficiency now that China has gained the upper hand over the U.S. on the soybean trade war front. The barrage of Chinese articles about finding soymeal substitutes, low protein animal diets, corn-soy intercropping, etc. has quietly faded from Chinese media. China's plan to bolster soybean self-sufficiency actually failed, but Brazil's bottomless soybean supplies nevertheless enabled China to snub U.S. soybean producers during last year's trade war. Xi Jinping now is free to make offers of soybean purchases to President Trump in trade negotiations without appearing to do so from a weak position. Mission accomplished, but not in the way Chinese strategists planned. Back in 2019--at the height of the first U.S.-China trade war--China's "Number 1 Document" announced a "soybean revitalization plan" to increase self-sufficiency in soybeans. Soybeans were pronounced to have strategic significanc...

Xi Jinping's Doctoral Thesis

Xi Jinping is the vice president and presumed next president of China but little is known about him. In this post the dimsums blog offers its contribution to the genre of Xi Jinping-ology by conveying Xi's decade-old views on agricultural markets. Ten years ago Xi Jinping wrote a thesis, "Tentative Study of Agricultural Marketization" (中国农村市场化研究) for a Doctor of Law degree at Tsinghua University in Beijing, a top breeding-ground for Chinese officials. The dimsums blogger has spent several hours poring over the 200-plus page tome to see what it reveals about Dr. Xi. The thesis is remarkably close to what China has been doing lately in agricultural policy, suggesting that Xi (or the person who actually wrote the thesis) has a major say in policy or is at least in agreement with what's being done. There is nothing adventurous, controversial (or insightful) in the thesis. It seems to be the work of a wonkish technocrat who is not prone to talk out of turn or wander from...

Divergence in U.S. & Chinese egg prices

High egg prices are a hot topic in the United States. China, in contrast, has a glut of eggs and depressed prices.  The March 14, 2025 USDA Agricultural Marketing Service weekly eggs market overview reported that U.S. egg prices continued declining during the second week of March as the supply situation improved. No significant highly pathogenic avian influenza (HPAI) outbreaks have occurred in March and U.S. egg demand is relatively light. The average U.S. wholesale price for Grade A large white eggs was $4.15 per dozen, down sharply from their February peak.  Until 2021, Chinese and U.S. wholesale egg prices had been roughly equal at about $1-to-$2 per dozen with no trend. U.S. prices fluctuated more than Chinese prices, so the U.S. price was sometimes higher, sometimes lower than the Chinese price after converting them to dollars per dozen.  Chinese prices converted using monthly exchange rate and assuming 0.6 kg per dozen. Sources: USDA and China Ministry of Agricult...