Wednesday, February 20, 2013

China to largely support 2013 spring production

According to the news from the Ministry of Finance of China (MFC) on 21 Jan., 2013, it has allocated USD19.46 billion of subsidy to provincial governments (including local governments in autonomous regions and municipalities) for the support of spring production in 2013, including USD2.4 billion of direct grain purchase subsidy and USD17.06 billion of comprehensive subsidy of agricultural means of production.

Additionally, aiming to support local governments to better complete the payment of direct grain purchase subsidy, the MFC allocated USD5.02 billion of grain risk fund (a special fund used to ensure the stabilization of grain price and the normal flow order of grain in domestic market) to local governments. Adding up the grain risk fund raised by local governments, the total fund reached USD6.08 billion.

Aiming to ensure grain safety, China has increased the investment in agricultural production year by year. Total investment in agriculture in 2012 reached USD195.65 billion, up 18.04% over that in 2011.

Such a large investment had finally gained a good return in 2012. According to the National Bureau of Statistics of China, China's total grain output in 2012 enjoyed a ninth growth in the past nine years, reaching 589.57 million tonnes and up 3.2% over that in 2011.

Moreover, the annual average income of farmers in this period also witnessed great growth, reaching USD1,260.67, up 10.7% over that in 2011.

Eyeing the growing population and the gradually shrinking of arable land, China has done a lot of work in improving grain output and stimulated the planting enthusiasm of farmers in recent years. However, as the fast development of urbanization in China in recent years, lots of farmers started to flow into cities for works and abandoned lots of farmland. The great gap between the incomes of working in city and farming has also alerted Chinese government. It is really hard for it to fill or narrow the gap in the near future even though China continued to increase the investment in agricultural production subsidies year by year.

The contradiction in the wills of raising farmers' income and encouraging them to stick to agricultural production for the growth of grain output has bothered Chinese government in the past few years.

The policy carried out in 2005, namely the Management Approach of Rural Land Contracting Right of Management Circulation, has largely balanced the problems. It encourages those farmers who are not willing to continue planting but to rent their farmlands to those large plantations. So that farmers can work in other fields and the farmlands are still not abandoned.

In the No. 1 central document of 2013, Chinese government is predicted to mainly focus on the reformation and innovation of agricultural management system which will encourage more professional plantations and develop more professional collective organizations.

Even so, Chinese government won't let the number of large plantations to increase as large as it can, because too many farmers abandon farmland and choose to work in cities which will cause lots of urban management issues.

The report above was derived from Crop Protection China News issued by CCM in February.

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Crop Protection China News, a monthly publication issued by CCM on 31st, offers timely update and close follow-up of China’s crop protection industry dynamics. It also provides you with professional features articles, keeping you aware of the latest industrial development, import and export analysis, and market data. 

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