Thursday, February 28, 2013

MOF allocates USD19.4 billion subsidies to support spring farming

Restrictive policies restrain multinational seed companies' technological advantages, which also hinders their further growth in China, such as DuPont Pioneer, Monsanto and Syngenta. Other multinationals like Dow AgroSciences, Bayer and Limagrain are planning to enter China's seed market. And it is worth noting that dependent on the good business contacts with Heilongjiang Land Reclamation Bureau, KWS fortunately has a sound development in China.
Even with technology strength, foreign companies are strategically hesitant and irresolute. They excessively go after short-term benefits while sharing the shortcoming of different culture and concept. Thus, the best way out for these companies is to make specific and steady long-term strategies and connect themselves more with local markets in practice.  Furthermore, whether foreign companies could build long-term partnership with multi stakeholders will be crucial for their successful operation and sustainable development in China.

In order to support the spring farming, the Ministry of Finance (MOF) recently has allocated USD2.4 billion (RMB15.1 billion) of grain direct subsidies and USD17.0 billion (RMB107.1 billion) of subsidies for agricultural means of production to provinces, autonomous regions and municipalities. In addition, the MOF has also allocated USD5.0 billion (RMB31.5 billion) of grants for 2013 grain risk fund. Coupled with USD1.1 billion (RMB6.7 billion) that allocated by local government, the current amount of grain risk fund has risen to USD6.1 billion (RMB38.2 billion). The grain risk fund, established in 1994, is aiming to protect the interests of grain growers, and further to stabilize grain markets and to ensure national grain safety. In order to alleviate the financial burden of the main production areas, the grain risk funds in China's 13 main production areas have all been paid by the MOF.

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