Friday, April 27, 2018

Rice Province Plans to Reduce Crop

China's biggest rice-producing province has announced plans to cut production of the crop as the country copes with a rice glut. This is a reversal of now-forgotten policies aimed at expanding rice production in the same province six years ago.

According to State media, Hunan Province's communist party leadership announced an objective of reducing Hunan's area planted in rice by 3 million mu--equal to 200,000 hectares--during 2018. The province's "number one document" aims to reduce production of double-cropped rice and shift the land into high value specialty crops.

Hunan authorities plan to choose 10 counties for development of vegetable supply bases and another 10 counties will be targeted for development of specialty fruits and tea. A provincial communist party official explained that Hunan plans to focus on building up seven major agricultural industries by 2020: rapeseed, bamboo, grain processing, livestock and poultry, tea, vegetables, and cotton-flax-silk.

The move is part of a supply-side structural adjustment reform to reduce production of low-quality rice as China grapples with a rice surplus. The provincial communist party official said Hunan must shift its cropping structure away from uniform rice production toward a crop mix with higher quality crops based on regional comparative advantage to follow consumer demand, optimize returns for farmers, and build a Hunan provincial brand.

The cut in rice planting is a reversal of rhetoric sounded by Hunan officials ten years ago when they worried that rice producers were leaving their land idle, switching from two crops of rice per year to one, or converting the land to high-value crops. By 2011, officials had rolled out initiatives to revive production of two crops per year by giving out cash awards, ordering village leaders to prevent idling of land, and intervening to transfer idle land to farmers who would grow rice on it. In 2012, a subsidy program was launched to start specialized early rice seedling farms, rice-transplanting companies, and to mechanize transplanting.

According to Hunan statistics, area double-cropped in rice went up from 2010 to 2014, while single-cropped area fell. These were the years when officials were campaigning to revive production of the early rice crop, which is notorious for poor quality and is grown primarily to meet government production targets. The early crop posted the biggest increase in production: an increase of 92,000 hectares (suggesting numbers may have been padded) during 2010-14. The late rice crop rose 52,000 hectares, approximately equal to the 54,000-hectare decline in land where a single rice crop was planted per year.

Changes in Hunan province rice-planting
Double-cropped rice
Early crop
Late crop
Single-crop rice
1000 hectares
2016 area
Source: Hunan statistical yearbooks.

By 2014, it was evident that the campaign to boost early rice production had resulted in excess supplies of rice. The government was the main customer for the early rice crop, in particular. Officials reversed course, began discouraging early rice production, and cut the support price for the crop. From 2014 to 2016, the early rice crop fell by 32,500 hectares and the late crop fell by 35,200 hectares in Hunan, while planting of single-crop rice rose by 32,200 hectares.

Hunan still plants mostly double-cropped rice. In 2016, the province reported planting over 1.4 million hectares each in early and late rice, and 1.2 million hectares in single-season rice. (No data on 2017 rice production in the largest rice-producing province is available today -- two months after the completion of the rice marketing season -- despite China's enthusiasm for "big data" and "market information.")

Presumably, Hunan's 200,000-hectare reduction will reduce the 2.9-million-ha combined area planted in early and late rice crops. Thus, double-cropped area is presumably targeted for about 1.35 million hectares.

Why are Hunan officials announcing this objective of reducing double-cropped rice production in late April, about two months after farmers typically plant the early rice crop?

If they were wrong about early rice six years ago, why should we expect communist officials to correctly guide farmers this time on what they should plant?

1 comment:

Godfree Roberts said...

"If they were wrong about early rice six years ago, why should we expect communist officials to correctly guide farmers this time on what they should plant?"

Because, over the past 70 years, Communist officials have been right 90% of the time.