The Chinese Government has turned up the volume on its food security propaganda this month as the country faces shrinking output of major farm commodities while the United States and Brazil are turning out monster crops.
On August 24, the chief of the National Bureau of Statistics rural office issued a proclamation that national grain production is basically doing well. Noting that the issue of maintaining the food supply for more than 1.3 billion people is a "first class issue" for governing the nation, he recited the creed of the necessity of relying on domestic production in a new era with changes in the agricultural sector.
The same day, the chief statistician from the same office explained that their estimate of a 4.3-percent decline in this year's early rice crop is not a concern since the country's inventory of rice is relatively large.
On August 27, a spokesperson for the Administration of Grain and Commodity Reserves assured listeners that the plummeting volume of wheat purchases this summer is not a threat to food security. From June through August 20, purchases of wheat by all types of enterprises totaled less than 42 million metric tons, 21 mmt less than last year at this time. This spokesperson also assured the public that there is lots of wheat in inventory to keep the supply stable.
August 22, Ministry of Agriculture and Rural Affairs director of rural institutional management noted that grain is a large country's powerhouse and declared that the inventory of farmland must be the protected at all times. He warned that the stock of farmland must never cross the "red line" of 1.8 billion mu (120 million hectares) in any place or any time, and land must not be diverted to other uses or brought into real estate development. He recited the same food security rhetoric and added some flourishes about "rural revitalization."
Maybe the food security propaganda blitz was prompted by "Northeast Corn and Soybeans Encounter Drought Over Wide Areas; Will Grain Supplies be Reduced?" published August 20 in Securities Times. In a rare departure from the party line, Securities Times said a reduction in corn yield is likely this year due to widespread drought in northeastern regions, plus damage by army worms and hail storms. Additionally, the article estimated that China's soybean area is down 1.7 percent this year: farmers were discouraged by poor returns from soybeans and difficulty selling last year's soybean crop and the announcement of fat soybean subsidies came too late to change planting decisions, Securities Times said. The article cited the 33-percent decline in wheat purchases and reported observations from news media that output in parts of Henan Province had declined sharply this year. One wheat trader quoted by Securities Times said, "As I went from county to county in Henan, I heard about unprecedented declines in production." Farmers expecting wheat prices to surge are holding on to their crop instead of selling it. Flour mills are not able to procure adequate amounts of quality grain.
Could it be that government officials have other information showing their farm policies are not working? The Ministry of Agriculture and Rural Affairs official's stern warning about loss of cropland to development could reflect the discovery that local officials have not been reclaiming enough new land to replace land lost to the vast real estate developments, industrial parks and highways.
The National Bureau of Statistics rural survey official also pointed to the importance of preserving land in his remarks, but it was the only item for which he reported no statistics. He reported statistics on tractors, irrigation facilities, and new-type farm operators from the agricultural census conducted last year, but nothing about cropland area. In fact, it was previously announced that the census will NOT report a new inventory of cropland--the piece of information that is most fundamental to farm production statistics--instead they will rely on a dicey number reported by the Ministry of Land Resources that has been suspiciously stagnant for years at a level just above the so-called "red line" of 120 million hectares.
Is it possible that the scaling-up of farms is not going well? The initial set of ag census results released last year showed a 2-million jump in the number of large-scale farms, but it also reported that the number of agricultural households had increased by 7 million over 10 years. The census found just half the 1.8-million farmer cooperatives officially registered were actually in operation. And why would anyone expect several million farmers with no experience farming on a large scale to be immediately successful in growing crops on hundreds or thousands of acres? Why would anyone be motivated to grow vast tracts of wheat or soybeans that bring skimpy returns when they could grow vegetables, tree saplings to sell to real estate developers, or watermelons that bring much higher profits?
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