Dim Sums: Agricultural Markets in China

China spends an enormous amount of money on agricultural infrastructure, but a string of exposés in State media, government crackdowns, and "scared straight" meetings for rural officials reveal that spending is extremely bloated, consists mostly of showpiece projects, and nobody really knows for sure what's happening in the hinterland.  A China Central TV broadcast on April 14, 2026  got attention for exposing an extravagant complex built as a farmer training center in a Chinese county. CCTV journalists visited an 11-building "Jun'an County Modern Agriculture Public Practical Training Base" on a 9.2-hectare (137 mu) site sandwiched between a highway and an excavated hillside. The compound included swanky hotels, two apartment buildings for experts, office buildings, restaurants, a sports center with badminton courts and a fitness center, chess rooms, gardens, and decorative ponds, but no facilities or equipment related to agriculture. The small sign on the g...

China's agricultural subsidies are cloaked in the language of environmentally friendly benefits for small farmers, but their main purpose is to industrialize agriculture in order to maximize extraction of resources from the land, water, and people of the countryside.  As farmers prepare to plant their crops, China's Ministry of Agriculture and Rural Affairs (MARA) announced this year's list of 16 policy measures to "strengthen, benefit, and enrich the agricultural sector."  Land fertility protection subsidy. An annual payment to villagers who hold rights to plots of collective farmland.  Agricultural machinery purchase and use subsidy.  Wheat spraying with growth promoter, herbicide and antifungal chemicals in the Spring. Corn and soybean intercropping subsidy Corn, soybean and rice producer subsidies Crop rotation subsidy for rotating corn and soybeans in Northeastern region, double cropping winter wheat or rice with corn or oilseeds in other regions, growing so...

China's farm subsidies need to have stronger production incentives--that was the argument made in an Economic Daily commentary earlier this month. WTO rules, bureaucracy, and dual roles as rural entitlement vs. production incentive have kept China's subsidies surprisingly ineffectual despite their massive size--China reported about 1.4 trillion yuan (roughly $200 billion) in farm support in its most recent notification to the WTO filed last September.  The Economic Daily commentator criticized China's practice of announcing and distributing crop subsidies with a long lag, usually months or even a year or more after the crop has been planted. The commentator lamented that some farmers call the subsidies "blind boxes," like receiving a gift-wrapped box with little idea of what's inside.  The commentator asserts that subsidies are an important tool for the State's mobilization of agricultural production and its preservation of national food security. The c...

China is launching an anti-subsidy investigation against European pork --a brazenly cynical move since China itself probably has more pork subsidies and government intervention than any other country. An industry source estimated earlier this month that 22 Chinese hog-producing companies received a total of 4.7 billion yuan (about $650 million) in subsidies during 2023. According to the industry source, the objective of the government aid is to build up big companies with prominent brands on the premise that they will "pull along" farmers and cooperatives. Muyuan, the largest hog producer in the world, got 2.877 billion yuan in aid. Others got smaller amounts: 257 million yuan to New Hope Group, 242 million yuan to COFCO, 232 million yuan to Wens Group, and 202 million yuan to DBN. The industry source estimated that 29% of aid given to Wens was for production activities, 23% for R&D, 15% for buildings and equipment, and 8% for environmental protection (no mention of wher...

China's soybean-corn intercropping technique is promoted as a panacea for getting 2 crops from 1 field, but adoption of this complex technique faces multiple obstacles. It is only viable on large-scale mechanized farms with hefty subsidies.  China's soybean-corn intercropping program features alternating rows of soybeans and corn. The most common version is "4+2": 4 rows of soybeans alternating with 2 rows of corn. The technique was first promoted in Sichuan and other southwestern provinces with small plots on mountainous terrain where many farmers had quit to seek work in cities. Agricultural officials adapted the technique for farms in other provinces in their drive to promote intercropping nationally. The 2023 program called for technical demonstration farms in 17 provinces: "expanding in the southwest, northern China plain and middle-lower reaches of the Yangtze River and stabilizing the scale of implementation in the northwest." Intercropping is not us...

Chinese leaders announced new farm subsidies this month that reflect worries about shrinking profits for scaled-up grain farms and farmer cooperatives. With costs escalating year by year, officials worry that newly-minted commercial farmers may abandon their land  if grain prices fail to keep rising.  Premier Li Keqiang squatted in a corn field for a photo-op with local officials and farmers  to announce a new one-time grain subsidy for 2021. In a carefully orchestrated visit to Jilin Province on June 15-16, 2021 Premier Li was photographed in a corn field where farmers assured him that another bumper harvest is expected this year. However, the farmers also complained that they were worried that increasing prices of fertilizer, fuel and other inputs will eat up profits from record-high corn prices.  According to Xinhua News Agency propagandists, Premier Li turned to comrades in his delegation and pronounced, "This is a key period for grain production; we m...

China's Heilongjiang Province announced that grain subsidies will be paid a month earlier than usual this year. Producer subsidies for corn, soybeans, and rice will be issued to Heilongjiang farmers by the end of August based on area they planted in the three crops.  Heilongjiang accounts for about 10 percent of China's grain output, and it produces the biggest surplus of grain to supply to other provinces. The producer subsidy policy is meant to encourage Heilongjiang farmers to produce by offsetting the province's low prices to generate better net returns. The amount of the subsidies will not be determined until August, but officials indicated the corn subsidy will be raised from last year while the soybean subsidy will be held steady. Last year's corn subsidy was 38 yuan per mu, and the soybean subsidy was set at 238 yuan per mu to stimulate more soybean production. This year the priority has switched to boosting corn output, with corn prices soaring and record corn...

"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...

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 articl...

A trade war "wake-up call" has prompted strong support for soybean production from Chinese officials in 2019, according to one article posted on Chinese feed industry web sites . The Chinese government has recently circulated a document calling for increased soybean production and higher subsidies for soybean farmers. A second article circulating last week included a scan of a Ministry of Agriculture and Rural Affairs (MARA) "letter of opinion" launching a "soybean revitalization plan" and reported on a meeting of Heilongjiang Province communist party officials discussing the importance of boosting soybean production to give China greater power in trade negotiations. The document is being passed around in the soybean industry but is not public. January 15 letter of opinion from MARA crop management office  calling for soybean revitalization program in northeastern provinces in 2019.  The MARA document reportedly sets goals of increasing area pl...

The soybean subsidy in China's largest soybean-producing province has been nearly doubled this year and the corn subsidy has been slashed as officials try to engineer a shift in acreage from corn to soybeans. Grain and Oils News reported last week that the Heilongjiang Provincial Government raised the soybean subsidy payment to 320 yuan per mu this year from 173 yuan last year. The corn subsidy was cut to just 25 yuan per mu from 133 yuan last year. This year's soybean subsidy would equal about $280 per acre and the corn subsidy would be about $22 per acre at the current exchange rate. Subsidy funds will be issued to county agricultural bureaus who are supposed to distribute payments to farmers within 15 days. Heilongjiang Province soybean and corn subsidies, 2017-18 Crop 2017 2018 Yuan per mu Soybeans 173 320 Corn 133 25 Source: Grain and Oils News . Grain and Oils News proclaims that the higher subsidy for soybeans has stimulated more s...

Two Chinese provinces issued orders to increase soybean planting this spring with promises of a big subsidy. It is unclear whether the "emergency" is a potential shrinkage of soybean imports from the United States or low soybean prices that threaten to derail China's multi-year effort to shift land from corn to soybeans. Jilin Province issued a "circular on 2018 soybean planting task" 《关于下达2018年全省大豆种植面积任务的通知》to township governments ordering local officials to expand soybean planting, and warning them that they must raise their "awareness and political standing" to decisively complete the task. Local officials were told to email their soybean plan to provincial officials by May 2. On April 28, Changchun municipality issued an "emergency notice on implementing the 2018 soybean planting task 《关于迅速落实2018年大豆种植面积任务的紧急通知》which emphasized that "expanding soybean area is an important political task in agricultural production." Heilongjiang Prov...

Two of China's top grain-producing provinces announced subsidies for buyers of corn and soybeans layered on top of generous subsidies for growers. For some corn, it is possible that three different subsidies could amount to 38 percent of the farm price, and subsidies could add up to nearly half of the purchase price for soybeans. On March 23, Heilongjiang and Jilin Provinces announced a subsidy for processing plants and feed mills that buy corn and soybeans harvested in the provinces during 2017. The subsidy for corn purchases is 100 yuan per metric ton purchased in Jilin Province and 150 yuan in Heilongjiang . The subsidy for soybeans purchased is a whopping 300 yuan/mt in both provinces. The corn purchase subsidy is aimed at industrial processors that make starch and alcohol products from corn with at least 100,000 mt of annual capacity and feed mills with at least 50,000 mt of capacity. The soybean subsidy is aimed at companies that make food products from soybeans, such as...