China's corn farmers can expect to continue receiving their subsidy payments in the future as subsidies tied to acreage planted in specific crops become one of China's main subsidy strategies, according to a recent online article posted on numerous agricultural news sites in China. It is clearly tied to the amount of corn grown, unlike the first round of grain subsidies that began in 2004.
The article provided answers to 10 questions to help farmers understand the corn subsidy payment.
1. Will this be the last year for the corn subsidy?
A: This is the third year of the subsidy's 3-year trial, but it is likely to continue in future years. Indeed, it may become a common subsidy measure that covers all crops (it already covers corn, soybeans, and rice).
2. When is the land area for the corn producer subsidy verified?
A: Each year by June 30. The subsidy funds are distributed by September 30.
3. How much is the subsidy?
A: The amount varies by province and year. During 2016, Heilongjiang had a province-wide corn producer subsidy of 153.92 yuan/mu; in 2017 it was 133.46 yuan; and it is rumored to be cut to 100 yuan or less in 2018. Jilin, Inner Mongolia, Liaoning Provinces have subsidies that vary by county.
4. What regions are covered by the corn producer subsidy?
A: Counties and municipal districts where corn is grown in the three northeastern provinces (Jilin, Liaoning, Heilongjiang) and Inner Mongolia.
5. Are the corn producer subsidy and the cultivated land fertility subsidy the same?
A: No. Corn producer subsidy recipients are producers with land actually planted in corn. Land fertility subsidy recipients in principle are those engaged in growing grain crops, including rural people, state farms, forestry districts, and state farm employees. For contracted cropland that is transferred or subleased, in principle the subsidy is given to the contracting household.
6. Who gets the corn producer subsidy?
A: Producers who legally grow corn on cultivated land, including local farmers, family farms, farmer cooperatives, and outsiders who legally rent land. For land transferred, subsidy funds must be given to actual corn growers.
7. Is the subsidy paid for land planted in corn for silage or corn as a vegetable (sweet corn)?
A: Not corn for silage, but sweet corn is covered by the subsidy this time.
8. What is the basis for determining a farmer's subsidy payment?
A: The area of cultivated land planted in corn during the current year.
9. If a contract to transfer land has been signed but does not specify who gets the subsidy, what happens?
A: It is suggested that the two parties negotiate a settlement according to law.
10. If I have transferred my land to another party this year, does my land area have to be verified again next year if I take my land back?
A: The area planted in corn must be verified each year.
Wednesday, June 13, 2018
Monday, June 11, 2018
China's Hope: Unmanned Farms
China hopes its farms will eventually be run by machines who do the work and the thinking. The vision of unmanned Chinese farms is an astounding great leap from its present highly labor-intensive fragmented farming model.
At a "fully automated agriculture" pilot kicked off last week in Jiangsu Province's Xinghua municipality, a central government official remarked that agricultural field work is rapidly becoming digitized, automated, and linked to the Internet as fusion sensors, precision navigation, artificial intelligence, cloud computing and big data increase in popularity. The pilot kick-off featured unmanned tractors, rice transplanters, pesticide applicators, and fertilization equipment. Many use sensors, controllers, and a Chinese satellite for navigation.
The official said tractors on autopilot, intelligent drip irrigation, variable application of fertilizer and other new intelligent technologies are already in use by advanced countries like the United States and Israel. These technologies can help China cope with its aging work force, low productivity, polluting farming methods, and low value added in farming, the official remarked.
The 7-year pilot for automated agriculture is sponsored by an automobile industry technology alliance and the Xinghua local government. The pilot aims to build a foundation for a new Chinese agricultural production model by demonstrating advanced farm operation models and technologies, step by step bringing digitization, artificial intelligence, and online connections to cultivation, planting, field management, harvest, storage, and transportation. They hope agriculture will become a wealthy industry and that farming will become a new high-tech profession.
According to the president of Jiangsu University, unmanned farming equipment has been adapted to Chinese conditions and will bring earth-shaking changes to agriculture, both in China and in the world.
A commercial attaché from Ukraine's embassy attending the event said he hoped China would set up agricultural machinery factories in his country. An official from a Russian company said digital technology is the wave of the future, and she expressed interest in cooperation with Chinese companies.
At a "fully automated agriculture" pilot kicked off last week in Jiangsu Province's Xinghua municipality, a central government official remarked that agricultural field work is rapidly becoming digitized, automated, and linked to the Internet as fusion sensors, precision navigation, artificial intelligence, cloud computing and big data increase in popularity. The pilot kick-off featured unmanned tractors, rice transplanters, pesticide applicators, and fertilization equipment. Many use sensors, controllers, and a Chinese satellite for navigation.
The official said tractors on autopilot, intelligent drip irrigation, variable application of fertilizer and other new intelligent technologies are already in use by advanced countries like the United States and Israel. These technologies can help China cope with its aging work force, low productivity, polluting farming methods, and low value added in farming, the official remarked.
The 7-year pilot for automated agriculture is sponsored by an automobile industry technology alliance and the Xinghua local government. The pilot aims to build a foundation for a new Chinese agricultural production model by demonstrating advanced farm operation models and technologies, step by step bringing digitization, artificial intelligence, and online connections to cultivation, planting, field management, harvest, storage, and transportation. They hope agriculture will become a wealthy industry and that farming will become a new high-tech profession.
According to the president of Jiangsu University, unmanned farming equipment has been adapted to Chinese conditions and will bring earth-shaking changes to agriculture, both in China and in the world.
A commercial attaché from Ukraine's embassy attending the event said he hoped China would set up agricultural machinery factories in his country. An official from a Russian company said digital technology is the wave of the future, and she expressed interest in cooperation with Chinese companies.
China Chooses Feed Imports to Compete with Soymeal
China has waived inspection and quarantine requirements on a list of obscure animal feed ingredients, apparently as a strategy to reduce reliance on soybean meal as an ingredient in the country's feed industry. The move illustrates China's practice of manipulating such rules to manage trade.
China's Administration of Customs 2018 Bulletin No. 51 announced that inspection and quarantine certificates will no longer be required for a list of 71 items as of June 1, 2018. The list includes 18 items that are by-products of agricultural processing used as animal feed--all but a few of the items under the broad Harmonized System (HS) category 23. The items include rapeseed meal, peanut meal, cottonseed meal, palm and coconut meal, fish meal, sugar beet and bean pulp, the residual from sugar cane processing, wine dregs, and feed additives. Other products on the list are obscure types of fats, oils and fibers, also residual material from processing industries.
What is notable are the three categories under HS 23 NOT included: soybean meal, distillers dried grains, and wheat bran. Imports of these excluded items will still be subject to rigorous inspection and quarantine inspections at the border.
While the Customs notice claims that the items were selected on the basis of risk evaluation, the choice of items appears to be based on strategic considerations of protecting domestic industries and fostering alternatives to soybean meal. Imported soybean meal, distillers grains and wheat bran imports would compete with products of important domestic processing industries in China.
A commentary on the announcement interprets the Customs waivers as a strategic measure to diversify sources of high protein meal to reduce reliance on soybean meal--the dominant source of protein meal used in China's animal feed. The article quotes an unnamed industry analyst who notes that imports of alternative protein meals are currently very small and the analyst speculates that easing the way for imports of rapeseed, peanut, cottonseed, palm, and sugar-derived meals could diversify China's sources of high protein feeds.
The analyst also observes that distillers dried grains--the most popular alternative to soybean meal--was not included in the "liberalization." Last year China imposed antidumping duties of distillers dried grains. Its exclusion from the customs announcement appears to be another indication that Chinese authorities want to keep imported DDGS out of the market.
The commentary did not notice that wheat bran (HS 230230) was also one of the few items in the HS 23 category omitted from the customs announcement. The preservation of quarantine certificate requirements for wheat bran is likely intended to protect China's flour mills which derive significant supplementary revenue from selling bran (the by-product of milling wheat) for use in animal feed. Wheat bran prices have already been under downward pressure in China.
The customs announcement also appears to dovetail with China's strategy of promoting imports from "One Belt One Road" countries. Palm kernel and sugar cane residual products are imported mainly from Southeast Asia. China began importing peanut meal from Sudan and fish meal from Mauritania in 2016. Imports of sunflower seed meal from Kazakhstan began last year.
If challenged on the exclusion of soybean meal, DDGS, and wheat bran, China's Customs Administration will likely produce some sort of "risk analysis" that claims these three items pose a threat of introducing weeds or contaminants to China. It seems more likely that opening trade with new partners in Africa, Central and South Asia poses a risk of introducing foreign material, invasive weeds and pathogens, but customs authorities are welcoming this trade and likely rushing through approvals in the interest of promoting trade with "belt and road" countries.
This liberalization echoes another attempt to engineer trade using the same group of products two decades ago. During the 1990s China slashed tariffs on imports of items in HS 23 and waived the value added tax on imports of these items. That move was intended to fill deficits of protein in animal feeds without directly competing with grain products produced by China's farmers. It also represented a goodwill gesture of trade liberalization as China negotiated its accession to the WTO two decades ago.
The immediate result of the 1990s tariff cuts was a flood of soybean meal imports during a downturn in grain and pork markets that led to huge losses for Chinese soybean crushers. The VAT was reinstated for soybean meal to protect the crushers, and China has never been a major importer of soybean meal since then. But other items in HS 23 remained exempt.
Imports of DDGS from the United States was another unforeseen outcome of the 1990s liberalization but it took a decade to develop. Distillers dried grains were a fairly obscure commodity during the 1990s. After the U.S. ramped up its ethanol industry during the first decade of the 21st century, China's feed mills discovered imported DDGS could be a useful and cost-effective feed ingredient. Imports didn't get going until 2009, but China's imports of DDGS spiked at over 7 million metric tons and $2 billion during 2015.
China's Administration of Customs 2018 Bulletin No. 51 announced that inspection and quarantine certificates will no longer be required for a list of 71 items as of June 1, 2018. The list includes 18 items that are by-products of agricultural processing used as animal feed--all but a few of the items under the broad Harmonized System (HS) category 23. The items include rapeseed meal, peanut meal, cottonseed meal, palm and coconut meal, fish meal, sugar beet and bean pulp, the residual from sugar cane processing, wine dregs, and feed additives. Other products on the list are obscure types of fats, oils and fibers, also residual material from processing industries.
What is notable are the three categories under HS 23 NOT included: soybean meal, distillers dried grains, and wheat bran. Imports of these excluded items will still be subject to rigorous inspection and quarantine inspections at the border.
While the Customs notice claims that the items were selected on the basis of risk evaluation, the choice of items appears to be based on strategic considerations of protecting domestic industries and fostering alternatives to soybean meal. Imported soybean meal, distillers grains and wheat bran imports would compete with products of important domestic processing industries in China.
A commentary on the announcement interprets the Customs waivers as a strategic measure to diversify sources of high protein meal to reduce reliance on soybean meal--the dominant source of protein meal used in China's animal feed. The article quotes an unnamed industry analyst who notes that imports of alternative protein meals are currently very small and the analyst speculates that easing the way for imports of rapeseed, peanut, cottonseed, palm, and sugar-derived meals could diversify China's sources of high protein feeds.
The analyst also observes that distillers dried grains--the most popular alternative to soybean meal--was not included in the "liberalization." Last year China imposed antidumping duties of distillers dried grains. Its exclusion from the customs announcement appears to be another indication that Chinese authorities want to keep imported DDGS out of the market.
The commentary did not notice that wheat bran (HS 230230) was also one of the few items in the HS 23 category omitted from the customs announcement. The preservation of quarantine certificate requirements for wheat bran is likely intended to protect China's flour mills which derive significant supplementary revenue from selling bran (the by-product of milling wheat) for use in animal feed. Wheat bran prices have already been under downward pressure in China.
The customs announcement also appears to dovetail with China's strategy of promoting imports from "One Belt One Road" countries. Palm kernel and sugar cane residual products are imported mainly from Southeast Asia. China began importing peanut meal from Sudan and fish meal from Mauritania in 2016. Imports of sunflower seed meal from Kazakhstan began last year.
If challenged on the exclusion of soybean meal, DDGS, and wheat bran, China's Customs Administration will likely produce some sort of "risk analysis" that claims these three items pose a threat of introducing weeds or contaminants to China. It seems more likely that opening trade with new partners in Africa, Central and South Asia poses a risk of introducing foreign material, invasive weeds and pathogens, but customs authorities are welcoming this trade and likely rushing through approvals in the interest of promoting trade with "belt and road" countries.
This liberalization echoes another attempt to engineer trade using the same group of products two decades ago. During the 1990s China slashed tariffs on imports of items in HS 23 and waived the value added tax on imports of these items. That move was intended to fill deficits of protein in animal feeds without directly competing with grain products produced by China's farmers. It also represented a goodwill gesture of trade liberalization as China negotiated its accession to the WTO two decades ago.
The immediate result of the 1990s tariff cuts was a flood of soybean meal imports during a downturn in grain and pork markets that led to huge losses for Chinese soybean crushers. The VAT was reinstated for soybean meal to protect the crushers, and China has never been a major importer of soybean meal since then. But other items in HS 23 remained exempt.
Imports of DDGS from the United States was another unforeseen outcome of the 1990s liberalization but it took a decade to develop. Distillers dried grains were a fairly obscure commodity during the 1990s. After the U.S. ramped up its ethanol industry during the first decade of the 21st century, China's feed mills discovered imported DDGS could be a useful and cost-effective feed ingredient. Imports didn't get going until 2009, but China's imports of DDGS spiked at over 7 million metric tons and $2 billion during 2015.
Monday, June 4, 2018
China Says Ag Imports from U.S. Are Now Good
Last month Chinese officialdom decreed that imports of agricultural products from the United States are now a good thing, a reversal of past anxiety about unfair U.S. prices and threats to China's food security. A new round of tariff cuts scheduled for July 2018 backs up the rhetoric.
A May 17 Economic Observer article by a Ministry of Agriculture and Rural Affairs official proclaimed that "moderate imports" are a necessary feature of China's new stage of openness. With growing population, changing consumer demand, limited natural resources, and pollution constraints, agricultural imports are a necessity, the author said. He further asserted that agricultural imports do not conflict with domestic agricultural development as long as imports are steady, controlled, spread out over time, and spread over different sectors.
New in this article is its blessing of agricultural imports from the United States. The Ag Ministry author acknowledges that the United States is the leading agricultural exporter because of its abundant resources, large farms, and production capacity--without the usual complaints about U.S. farm subsidies, ABCD companies, trade barriers and hegemony over markets. The author concludes that agricultural trade between the United States and China benefits both Chinese consumers and American farmers.
The article was posted in various forms on dozens of Chinese news sites--including a May 19 version on the official Chinese Government web site--indicating that the new "ag imports are good" story is being pushed by propaganda authorities. A version of the article in the official propaganda mouthpiece Peoples Daily refers to China's commitment to import more U.S. products made in bilateral consultations completed May 19, suggesting the new rhetoric is at least partly a product of those negotiations. The Peoples Daily version emphasized that imports give China's consumers more choice, proclaiming China's "huge middle class" as the world's biggest market.
The rhetoric about opening the agricultural economy and giving consumers greater choice has been gaining momentum over the past year.
On May 31 Chinese officials announced a new set of tariff cuts for imports of consumer items that will take effect July 1, 2018. Among the products scheduled for cuts, the average tariff on a select group of fish and seafood products, mineral water, and processed foods will be reduced from an average of 15.2% to 6.9% in July. These are reductions in MFN tariffs that apply to all trading partners. The pro-import propaganda blast may have been meant to notify local officials of the new party line in advance of the new round of tariff cuts.
This is not the first move to cut taxes on imports. Authorities cut value added taxes on imported agricultural products from 13% to 11% last year and sliced the VAT again to 10% as of May 2018.
A May 17 Economic Observer article by a Ministry of Agriculture and Rural Affairs official proclaimed that "moderate imports" are a necessary feature of China's new stage of openness. With growing population, changing consumer demand, limited natural resources, and pollution constraints, agricultural imports are a necessity, the author said. He further asserted that agricultural imports do not conflict with domestic agricultural development as long as imports are steady, controlled, spread out over time, and spread over different sectors.
New in this article is its blessing of agricultural imports from the United States. The Ag Ministry author acknowledges that the United States is the leading agricultural exporter because of its abundant resources, large farms, and production capacity--without the usual complaints about U.S. farm subsidies, ABCD companies, trade barriers and hegemony over markets. The author concludes that agricultural trade between the United States and China benefits both Chinese consumers and American farmers.
The article was posted in various forms on dozens of Chinese news sites--including a May 19 version on the official Chinese Government web site--indicating that the new "ag imports are good" story is being pushed by propaganda authorities. A version of the article in the official propaganda mouthpiece Peoples Daily refers to China's commitment to import more U.S. products made in bilateral consultations completed May 19, suggesting the new rhetoric is at least partly a product of those negotiations. The Peoples Daily version emphasized that imports give China's consumers more choice, proclaiming China's "huge middle class" as the world's biggest market.
The rhetoric about opening the agricultural economy and giving consumers greater choice has been gaining momentum over the past year.
On May 31 Chinese officials announced a new set of tariff cuts for imports of consumer items that will take effect July 1, 2018. Among the products scheduled for cuts, the average tariff on a select group of fish and seafood products, mineral water, and processed foods will be reduced from an average of 15.2% to 6.9% in July. These are reductions in MFN tariffs that apply to all trading partners. The pro-import propaganda blast may have been meant to notify local officials of the new party line in advance of the new round of tariff cuts.
This is not the first move to cut taxes on imports. Authorities cut value added taxes on imported agricultural products from 13% to 11% last year and sliced the VAT again to 10% as of May 2018.
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