Farmers weigh up the highs and lows of price fluctuation
Sitting in a dark corner behind a pile of potatoes in a vegetable market, farmer Qu Mingxue is hoping he has made the right decision to leave his farm and come to Zhengzhou, capital of Henan province.
Just days ago he took the gamble by agreeing to pay 300 yuan a month to rent a small space in the market. Every morning he goes to the wholesalers to buy potatoes - with what little cash he has - to sell in the dimly lit market in the city centre.
So far, Mr Qu has no idea whether his decision will pay off. But he had to take the risk - it was impossible for him to pay the school fees of his two daughters in the past by growing rice on his 2.5 hectares of land in Huangliangshu village, 300km north of Zhengzhou on the other side of the Yellow river.
But this year was better than previous ones as the price of rice rose and he was able to pay the 1,000 yuan in school fees and the 200 yuan in various taxes and local fees to village officials.
Times have been hard for Mr Qu, who, like many others, has faced a host of problems in trying to eke a living from the land.
The price of crops is a key issue for struggling farmers. With the amount of available farmland shrinking, due largely to development, there was a 10 to 15 per cent rise in grain and other cereal prices in October. The price increase, particularly for grain, sparked fears of a possible food shortage. But it also lifted hopes that farmers' incomes would rise, slowing the growing wealth gap between people in urban and rural areas.
However, for rice and bean merchants in grain and oil wholesale markets in Zhengzhou, the increase was short-lived and speculative. Prices for rice and corn have already eased from the peak two weeks ago.
Rice wholesaler Zhu Erjun is not happy about the drop in price. He stocked up almost 200 tonnes of high-quality rice from the northeastern provinces as prices increased. Today, as prices fall, he is losing 3,000 to 4,000 yuan for every truckload he sells.
'At the height during October, it was difficult to secure the rice supply. Grain wholesalers scrambled to stock up rice and many farmers refused to sell as they believed the price would go up,' he said. 'Now the market is saturated and all wholesalers have too much rice in stock.'
But although Mr Zhu is disappointed, he believes he will still make a profit this year as his earnings earlier in the year should easily cover later losses.
Merchants selling soya beans and peanuts are in a better mood. Although prices for soya beans consolidated, demand for high- quality soya beans remained strong.
Zhengzhou is the hub for grain trading and the centre for commodity futures. Li Jingmou, general manager of the Henan Grain Wholesale Market in the city, is one of those who believes that grain shortages could be acute by 2005.
In a recent article, Mr Li said China's production fell short of consumption by about 100 million tonnes this year, although there was no shortage in the market due to the plentiful storage in warehouses.
Although the recent price rises were more a result of market speculation instead of grain shortages, the dwindling levels of farmland can be felt in the countryside around Zhengzhou.
In Putian village east of the city, farmers from nearby villages were gathering for one of the nine market days in a month to sell corn and wheat. Corn prices soared from 11.2 yuan per kilogram last year to as high as 12.6 yuan two weeks ago before gradually falling to 11.8 yuan. However, farmers said they did not benefit.
'The price increased because there is not much supply this year, our income is just the same as last year,' said one.
Another farmer from the nearby town of Baisha said the price rise could hardly compensate for the increase in the price of fertilisers.
With urbanisation gradually eating away at farmland, the question of how long they can keep their land also bothers farmers.
The Zhengzhou government has extended the city's main road by 10km eastward as it plans to expand the size of the city.
Farmers were told they would receive compensation of around 150,000 yuan per hectare of land they owned as the government takes their land for road expansion. An average rural household with two children will receive 40,000 to 50,000 yuan.
However, farmers are not sure if they will ever receive the money. In other parts of the country, it is well known that even if the city government honours its pledge and pays the compensation, farmers often only receive a small portion of the money, or none at all, after local officials get their hands on it.
But 73-year-old farmer Wang Quancheng is happy to enjoy both urbanisation and the benefits of having his own land - at least for the time being. His three sons earned 3,000 to 4,000 yuan a year each by demolishing old buildings, a prosperous job as the property market booms. He also harvested vegetables worth up to 2,000 yuan from the hectare of land he owns. He says his life as a farmer has never been more profitable. However, he also does not know how long he can keep his land as the city expands quickly. 'The officials have not talked to us yet,' he said.
