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BEIJING: Beijing saw the third rainfall of this spring on Tuesday
morning, but the shower did little to relieve the city’s
thirst—and economist Wen Tiejun’s worries.
As Chinese meteorologists forecast on Tuesday
the worst drought in five years will continue in north China,
including the capital, Wen told Xinhua the pressure on the grain
supply is rising in China, with or without droughts.
“China is feeling a rising pressure to grow
enough grain to feed its population,” said Wen, head of the School
of Agricultural Economics and Rural Development at the Renmin
University of China.
It was inevitable fallout of lower returns in
rural production than in industrial sectors as the country is in the
middle of industrialization, said Wen.
Although China saw a fourth consecutive rise in
grain output last year that met over 95 percent of domestic needs,
Wen noted it’s getting harder to maintain the balance.
“Rural Chinese have been turning away from
their lands as they can increase their income three to four times by
working in cities,” he said.
Actual proceeds dropped from 382 yuan ($54.3) to
320 yuan between 2004 and 2006 for growing each mu (a fifteenth of a
hectare) of grains, dampening farmers’ enthusiasm for raising
grain production, according to Vice Agricultural Minister Yin
Chengjie.
Rapid industrialization has seen hundreds of
billions of yuan flow out of the countryside each year, while
appropriation of arable lands has not been effectively checked, both
adding to the grain production pressure, said Wen.
Meanwhile, demand has expanded as a yearly
average of 15 million rural laborers moved to cities, needing an
extra 4.5 million tons of commodity grains each year, said Yin.
Official statistics show that over the past
decade, China’s population increased by 90.59 million and
per-capita grain supply decreased from 412 kg in 1996 to 378 kg in
2006.
The country’s grain output exceeded 500
million tons last year, 15 million tons less than the total demand,
as official figures show.
Chinese Premier Wen Jiabao said in a national
videophone last week the government should give “clearer,
straighter and stronger signals to mobilize and protect the
initiative of farmers to plant crops.”
The State Council, or the Cabinet, decided last
Thursday to spend another 25.25 billion yuan in addition to this
year’s rural budget, mainly to subsidize farmers’ purchase of
seeds, diesel, fertilizers and other production materials.
The Ministry of Finance has rushed to pay out
63.3 billion yuan of subsidies to farmers ahead of schedule to make
the money available in the coming spring plowing season.
The government raised the lowest state
purchasing prices for rice and wheat last week, the second such move
since February.
“Subsidies combined with protective purchasing
prices proved effective in addressing the conflict between grain
growth and farmers’ pursuit of higher income,” said rural policy
researcher Li Chenggui with the Chinese Academy of Social Sciences.
But the effect would be limited if small-scaled,
scattered crop planting continues to restrain agricultural growth,
he said.
China has vowed to find a long-term solution to
close the rural-urban gap, increasing rural input and sending farm
experts to boost agricultural productivity.
Despite the supply pressure, China is relatively
immune to soaring global rice prices and a world grain strain, as it
remains self-sufficient at present, said Li.
Wen said China’s rice supply and demand were
basically balanced, while the gap between domestic and international
prices was not big enough to stimulate large export rises that could
cause shortages.
Customs figures show China exported 9.86 million
tons of grains (soybeans excluded) last year, but imported only 1.55
million tons.
The country has vowed to strictly control grain
export to ensure domestic supply and fight inflation, abolishing tax
rebates, levying temporary duties and imposing quotas on the export
of some grain products like rice and wheat.
The price for Thai medium-grade 15 percent
broken rice, a benchmark for the international market, has more than
doubled in the past three months. Several rice exporting countries,
including Vietnam, Philippines and Cambodia, have recently stopped
or cut exports.
Figures from the Food and Agriculture
Organization of the United Nations show global food prices surged 40
percent last year while world grain reserves will drop to a
two-decade low this year.
-- Xinhua
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