Dim Sums: Agricultural Markets in China

Two of China's top grain-producing provinces announced subsidies for buyers of corn and soybeans layered on top of generous subsidies for growers. For some corn, it is possible that three different subsidies could amount to 38 percent of the farm price, and subsidies could add up to nearly half of the purchase price for soybeans. On March 23, Heilongjiang and Jilin Provinces announced a subsidy for processing plants and feed mills that buy corn and soybeans harvested in the provinces during 2017. The subsidy for corn purchases is 100 yuan per metric ton purchased in Jilin Province and 150 yuan in Heilongjiang . The subsidy for soybeans purchased is a whopping 300 yuan/mt in both provinces. The corn purchase subsidy is aimed at industrial processors that make starch and alcohol products from corn with at least 100,000 mt of annual capacity and feed mills with at least 50,000 mt of capacity. The soybean subsidy is aimed at companies that make food products from soybeans, such as...

Two recent Chinese commentaries reveal commonly-held beliefs about American farm subsidies that are behind Chinese antidumping and countervailing duty investigations of U.S. farm products like chicken, distillers grains, sorghum, and maybe soybeans. A March 7 article, " Influence of U.S. agricultural subsidies on world agricultural trade " from the State-supported Futures Daily was posted on the Ministry of Commerce's WTO information web site and a number of other Chinese sites. The unidentified author asserted that imports of sorghum from the U.S. "receive subsidies from the U.S. government," which allow them to be exported to China at a price lower than the "normal value," and "there is a significant degree of dumping." The implicit assumption is that the Chinese price is the "normal" value, and any price lower than the Chinese price must be abnormal--the "middle kingdom" is the center of the world, after all. A M...

At a March 7 press conference two African journalists asked China's Minister of Agriculture what Africa can learn from China about agricultural development. The Minister assured the journalists that China is a good friend to Africa and hopes for even more cooperation in agriculture. His answer focused on China's technical aid to Africa: opening rice-growing demonstration centers in Africa, sending numerous technicians to Africa, and training thousands of African technicians and officials in China. He celebrated China's success in addressing its food security problems and noted that Africa still has a food security problem. China's Ag Minister said he was eager to share China's rural development experience, but he was vague and equivocal on exactly what advice or guidance China could give to African countries. His response boiled down to an admission that China has no transferable formula for agricultural development. China's experience is peculiar to its ow...

At a March 7 press conference , China's Minister of Agriculture warned farmers not to "blindly" expand planting of corn this spring, pointing out that government reserves are still high and international prices are still relatively low. Other analysts attribute a suddenly-tight corn market to rapid disposal of corn stockpiles. Minister Han Changfu advised listeners that China's strategy in agriculture is to let the market have a decisive role in resource allocation. He then ordered farmers not to respond to recent increases in market prices that are prompting them to expand corn planting this spring. Minister Han warned that an expansion of corn-planting--especially in regions that don't have a comparative advantage in growing corn--would reverse the Ministry's "supply side structural adjustment" designed to reduce excess corn production capacity. Minister Han urged farmers to continue the structural adjustment by planting crops that are "dema...

Illustrating the country's slide into Orwellian totalitarianism, China's communist party has been holding "democratic life meetings" that are the antithesis of democracy: attendees pledge loyalty to the undisputed leadership of Xi Jinping and repent of any ideological deviation from Xi's thoughts. A central "democratic life meeting" for the Politburo was held by Comrade Xi on December 25-26, 2017 to study "Xi Jinping's Thought for Socialism With Chinese Characteristics in a New Era." The Politburo pledged to preserve the centralized authority of Comrade Xi Jinping as core leader of the central communist party committee and to fully implement each item decided by the 19th party congress. The December meeting is a model for lower levels of the communist party. On February 2 the communist party organization of China's Ministry of Agriculture held a "democratic life meeting " chaired by the Minister of Agriculture and Party S...