Chinese farmers are looking for more clarity about promises of higher subsidies for corn and soybeans so they can decide whether it's worth renting land for upcoming spring planting.
Chinese officials hoping to carry out a policy directive to expand soybean production this year recently announced that this year's subsidy payment for soybeans would exceed the corn subsidy by 200 yuan per mu this year, but they did not announce the amount of the subsidy for either crop. In Heilongjiang Province--the largest producing region for both crops--last year's payments were 320 yuan per mu (about $280 per acre) for soybeans but the corn subsidy was slashed to 25 yuan per mu ($22 per acre). There are also "land rotation" payments for farmers who switch land from corn to soybeans or other crops. Officials in Heilongjiang also recently announced they would buy up 200,000 metric tons of soybeans for provincial reserves to bolster soybean farmers' confidence.
An article in Chinese news media speculating on how the subsidy announcement would affect soybean planting reported that land rents are up sharply this year, presumably because of news of higher subsidies. According to the article, rental contracts for farmland in China give prospective farmer/renters two choices: pay a higher rent of 400 yuan per mu (about $350 per acre) if the farmer receives the subsidy payment or a lower rent of 200 yuan per mu (about $175 per acre) if the landlord gets the subsidy. With these kinds of land contracts farmers are urgently seeking information about the subsidies, the article explained.
Officials typically don't announce exact amounts for these subsidies until the fall months when the crop is harvested.
Factoring subsidy payments into Chinese land rental contracts is common practice. Official documents on farm subsidies frequently insist that farmers must have a written contract specifying which party is entitled to subsidies to head off disputes over the payments. An article on a farm real estate web site last year explained that investors and farmers renting rural land must be aware of crop subsidies, poverty alleviation subsidies and subsidized loans attached to the land and gave examples of how to incorporate these payments in land rental contracts. In past years, the "temporary reserve" program that supported corn prices also inflated land rents in northeastern corn-growing regions. Rents declined sharply in 2016 when officials removed the "temporary reserve" for corn, allowing the corn price to fall by about 30 percent.
No comments:
Post a Comment