News 432 views last update:6 Aug 2012

Chinese grain not affected by disasters

The devastating floods and drought will not affect China's grain output. Officials and experts said grain production is expected to remain stable in the coming years, which means the country doesn't have to import more.

Despite the drought and heavy rains that have hit many provinces this year, autumn grain output is expected to more or less meet the target, said Hu Biliang, a researcher with the Rural Development Institute of the Chinese Academy of Social Sciences. In fact, summer grain output rose for the fourth consecutive year to reach 115.34 million tons, according to official data.

Domestic supply
China's grain imports have been exceeding its exports since 2003, raising concerns that it could destabilize global grain prices. Ministry of Agriculture's senior official Hu Yuankun said last week that China will depend mainly on domestic supply to meet its demand. It will make "proper" use of the international market to meet the domestic demand for processing and other industrial uses, he said at a forum.

State Grain Administration official Lu Jingbo, too, said China has ample stock of grain, and that supply and demand has become relatively balanced. Last year, China's grain output reached 497.45 million tons, while its demand was estimated at 507.5 million tons, a gap of 10 million tons, or just 2% of its annual output.

More subsidies
The central government has granted more subsidies to farmers within the framework of the World Trade Organization. This, coupled with the rising grain prices, has encouraged farmers to raise their yield, Hu said. In the coming years, China will face additional pressure because the area of its cultivable land is shrinking as a result of urbanization, Hu said. Another challenge is that the output capacity of more than 60% of China's farmland is diminishing.

More expertise
Director of Chinese Academy of Sciences' Center for Chinese Agricultural Policy Huang Jikun said China has improved its technical expertise to raise its per unit production to make up for the loss. "That will ensure that China's grain imports and exports remain roughly balanced in the coming years," he said. By 2015, China has to import corns to meet 15% of its demand, Huang said. But the exports of rice and wheat will increase by that time to balance the country's overall grain trade.

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