Grain production rises; price fall hurts farmers
By Fu Jing (China Daily)
Updated: 2005-09-26 05:30

A continuous increase in China's grain output this year will ensure "food security," but falling crop prices will create difficulties for farmers, according to a top agricultural policy maker.

Chen Xiwen, deputy director of the Office of Central Financial Work Leading Group, said the nation's grain production this year is expected to reach 475 million tons, up from 469.5 million tons in 2004. There has been a continuous rise in production since 2003, when China's grain output hit 430 million tons, a 14-year low.

"Weather permitting, China is heading for another bumper year, but farmers have been feeling less happy," said Chen. "The country is still being challenged by a grave situation in rural regions."

Chen said there is little chance of a grain price rise, and added to a rapid increase of production material costs, uncertainty in weather and frequent natural disasters, many Chinese farmers have not enjoyed a happy year.

Farmers' incomes and food security were heated topics among the agricultural officials and researchers attending the 10th anniversary of establishment of the Centre for Chinese Agricultural Policy under the Chinese Academy of Science.

Huang Jikun, director of the centre who has been close to China's highest leadership, told China Daily that Chen was implying that farmers are suffering from lowering crop prices because of the harvest.

"In fact, crop prices are falling and it will affect farmers' incomes," said Huang. "That is likely to make farmers plant less next year."

But Chen said the government will continue to use "protection grain prices" to keep farmers active. "We've already used the practice for two years and will continue."

Chen also said China will abolish agricultural taxes for all farmers next year and 29 out of China's 31 provinces, autonomous regions and municipalities have already rooted out the practice which dates more than 2,500 years.

"That has partly lessened the burden on farmers, but we need more efforts to increase farmers' incomes and narrow the gap between rural and urban regions," said Han Jun, department director of Rural Economy of the Development Research Centre of the State Council.

The think-tank researchers all agreed that farmers' profit margins will be narrowed because of falling crop prices, increases in agricultural production material costs such as fertilizers, and severe natural disasters.

"Increase in their income will depend on earnings in non-farm sectors, such as pay from working as migrant workers," said Han.

Last year, per capita net income of farmers reached 2,936 yuan (US$362), up 6.8 per cent, the highest rate since 1997. Experts do not expect a similar rate of increase this year.

The urban-rural income gap is still widening. In 2004, per capita income of urban residents swelled by 7.7 per cent to hit 9,422 yuan (US$1,135), which is 3.21 times as much as that of a typical rural dweller. The gap in 1978 was 2.57 times.

(China Daily 09/26/2005 page2)

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