China subsidies 165 billion dollars for agriculture

Over 5 years, the agricultural sector salaries skyrocketed, the sugarcane growers in southern China began looking into Vietnam. According to The Economist, who hired labor for only a quarter of the country to look after the fields, especially during the harvest. These workers illegal immigration, but local governments also ignored. Each year, about 50,000 Vietnam to Chongzuo – the capital of Guangxi Province road. But recently, when relations between the two countries strained, China began to try to reduce this labor.

Even without this problem, the farmers in Chongzuo was also having trouble competing with cheap imports. However, they also just follow the efforts of the Government – is to promote the domestic sugar industry. China has reduced imports of sugar and buy more expensive products in order to reserve water.

To encourage farmers to continue growing sugarcane losses, officials also are considering direct subsidies and started offering preferential loans. Application of such measures is the general situation of Chinese agriculture. Costs are rising, crops are declining government support increasingly came much to support the agricultural sector.

China subsidies 165 billion dollars for agriculture

Prices for many staple foods in China is higher than the world pretty much. Photo: China Daily
Since the late 50’s famine of the last century, in which tens of millions died, China has completely food production for domestic consumption. With a population one-fifth of all the world, countries are using less than 10% of the arable land. But when food demand growing, China can no longer self-sufficient again. In 2011, they became the biggest agricultural importer in the world, mainly soybeans.

However, China is open for soybean imports are quite contradictory. For too long, government has set a target of self-sufficiency in food and commodities. Earlier this month, draft a new law on national security has also emphasized the role of government in ensuring “food security” – words often used together with self-sufficiency policy. China allows cultivation sufficient to provide for the country’s strategic goal of trying Chairman China – Mao Zedong, so he had little trust in the international market. Some leaders of this country think so today.

However, to maintain self-sufficiency is a costly policy. In 2012, China spent $ 165 billion to support farmers, double the previous 5-year and 3-fold European Union (EU), according to the Organisation for Economic Co-operation and Development (OECD). It also creates bad performance. Government minimum price paid to rice, corn and wheat are higher than the world average lot.

This has retarded farmers diversify farming products to take full advantage of the land. The chemicals are used to increase production as well as water pollution. Productivity growth has slowed since the 90s, and the output is also stationary in recent years. Meanwhile, costs are still rising steadily as young people migrate to cities.

In those years of excess production, the government has bought for the reserve. Many countries do the same – store food in order to stabilize domestic prices and prevent natural disasters, famine. However, China’s reserves are said to be larger than necessary. Corn warehouse is estimated to sufficient demand for 7 months. While standards just 3 months.

Besides, the buyer reserves also raises the issue of corruption. As reported by the national media last month, many officials bought low-quality food at low prices, then reported to have bought high-quality products with high price and pocket the difference. This activity is said to be very popular.

Even the production of sugar – a few important commodities with agricultural strategy of China, is also inefficient because of government intervention. Officials want 85% of consumption is produced domestically. However, sugarcane farms of this country is very low efficiency, about half compared with Brazil – the largest producer of sugar cane in the world.

Domestic sugar prices more than double the international price. Even when calculating shipping costs and import duties of up to 50%, still cheaper imports. Therefore, the government is reducing imports to avoid domestic market overwhelmed.

Some officials also seem to find self-sufficiency policies need more flexibility. Chinese Premier – Li Keqiang last year commented on China’s goal is “fully ensure the security” of food.

Some people have recognized the ambiguity of this statement. And so, a debate broke out about increasing purchase on the international market than the domestic auto plant can ensure data security or not. However, the Government does not want to cause unrest in the country. So they still restrict imports whenever producers feel threatened in the country. The most obvious proof that these farmers in Chongzuo mia. Government is always ready to help them resume farming in fields with low productivity. Chongzuo not allowed to die.