Chinese farmers say subsidies unfair

"Backyard" livestock farmers in China favor eliminating subsidies that go primarily to large livestock farms, according to a commentary posted on many Chinese web sites earlier this week.

The article appeared on swine industry and social media sites with varying titles such as, "The reason backyard farmers oppose subsidies is shocking!" "Upper levels of government were shocked," and "The truth! Why does poverty increase at the same time the State gives more subsidies?" The author was not identified.

The commentary criticized livestock farm subsidies as unfair because the money goes mainly to big farms or disappears in the bureaucracy while poor farmers who need the money get nothing. Small farmers' resentment is magnified when they see expansions by subsidized large farms depressing prices and forcing the small farms out of business. "Although [the money] is for industry [development] and environmental protection, they are tears for poor people," the article complained.

Distribution of subsidies is not open or transparent, the article said, and there is no way for poor farmers who need them to get subsidies. Subsidies are "heard, not seen" and farmers suspect that the money is collected by "a few fat people." The writer complained that livestock farmers need to achieve a certain scale of operation and have personal connections or favor with the government to collect subsidies. Therefore, subsidies should not function as "a road to riches for those people."

The article wondered if the subsidies were a method for squeezing small farmers. Subsidies function as "training for landlords" rather than poverty alleviation, the writer complained. "Since we [small, poor] farmers don't get them, let's eliminate the subsidies for all farmers," the anonymous writer suggested.

The article focuses mainly on subsidies for swine farms that differ from crop subsidies which are usually annual payments based on the land-holding. Most of the livestock subsidies are one-time grants or loans to build farms or acquire animals and equipment. Subsidies for livestock are often proportionate to the size of the operation. They include:

• A one-time grant for construction of large-scale livestock farms of 500 head or more, ranging from 200,000 yuan ($29,000) for 500-999 head to 800,000 yuan ($115,000) for 3000 head or more.
• An annual transfer payment  of no less than 1 million yuan ($143,000) to major pork-surplus counties which the author says is "mostly paid to large farms." Regulations say these funds should be used for support of the local pork industry, including subsidized loans for farms and slaughterhouses, breeding and veterinary support.
• Breeding animal acquisition and subsidies of 30 yuan per head for farms that maintain stocks of native-breed animals
• Subsidies for automated feeding and water-conserving equipment
• Subsidized immunizations and insurance for sows and finishing hogs
• Compensation for culling animals during an epidemic and for safe disposal of carcasses
• A subsidy for new types of feed (which appears to be for microbial feed additives) that is only available in a few places.

China appears to have kept these subsidies mostly hidden in its notifications of farm subsidies to the World Trade Organization. In its latest notification for 2016 submitted early this year, China listed only 73 million yuan ($1.3 million) in pig-specific subsidies and an additional 179 million yuan for cattle and sheep. These were a tiny fraction of its 1.3 trillion yuan ($186 billion) in total support for its agricultural sector declared in its WTO notification. No one really knows where this money goes or who gets it.