A bad patch for many down on the farm

PUBLISHED : Saturday, 10 December, 2011, 12:00am
UPDATED : Saturday, 10 December, 2011, 12:00am


Agriculture topped China's list of concerns when it entered the World Trade Organisation 10 years ago, and a decade into membership some farmers are still anxious.

Feng Wei, a pig farmer in Jining , Shandong , says China's WTO entry has not benefited him at all, only harmed his business.

Tighter restrictions, for example, had created an imbalance between meat imports and exports, he said.

'China doesn't ban the use of antibiotics in pig, chicken and duck breeding, so the industry's abuse of the drugs has made it very tough to export the meat,' said Feng. 'But it's easy to import foreign pork into China.

'China probably hasn't imported much meat but once it does, butchers will begin to cut prices. And if they reduce the price by, say, 10 fen, then pig traders will have to cut their price by 30 fen.'

When China was applying for membership, academics, industry players and even then-premier Zhu Rongji voiced fears that the domestic sector would be crushed by imports as Chinese farmers lagged behind in technology and had little understanding of a market economy.

Professor Tian Zhihong, a member of the Ministry of Agriculture's WTO expert panel, noted that China's trade deficit in agriculture has grown steadily since first arising in 2004. According to customs data, China's agricultural trade deficit was US$4.6 billion in 2004, and ballooned to US$23 billion last year.

Tian added that while the nation's farm exports grew annually by 12.4 per cent between 2001 and 2010, imports grew by a much higher 22.3 per cent a year.

Ni Hongxing, director of the ministry's Agricultural Trade Promotion Centre, said it had got to the point where China was highly dependent on imports for major agricultural commodities. China produces less than 30 per cent of the soya beans it consumes, less than half of its edible oil and about 60 per cent of the cotton in its market, Ni wrote in the International Business Daily.

Official data shows that China imported nearly 5.5 million tonnes of soya beans and 300,000 tonnes of cotton last year. Chinese farmers would need about 30 million more hectares of land to produce the same amounts, based on the country's current yield and if two crops were planted a year. It has vowed to keep its arable land above 120 million hectares, but official figures have not been released since it said it had 121.7 million hectares at the end of 2008.

And Chinese farmers work farms that span, on average, half a hectare - one-fourhundredth the size of the average US farm.

Overseas farmers, not domestic growers, have benefited from the opportunities brought by higher demand for products in China, according to Du Min , a research fellow at the ministry's Research Centre for Rural Economy.

'Farmers have not benefited much from the opening-up, since the expanded market has been largely occupied by imported foreign products,' she said.

But some small Chinese farmers are reaping the benefits. Li Gang, a rice grower in Jiamusi, Heilongjiang, said: 'In the past decade, growing rice has become more lucrative. In 2001 and 2002, grain prices were surprisingly low, and we hardly made any money. But things have improved since 2004. The government has offered more subsidies since then, and prices have been good lately.'

Prices of agricultural products have been more volatile because China has become much more tightly linked to the global market since its WTO entry, Tian said.

Despite the international competition, China remains a country of small farms, and its agricultural companies often cover only a few links instead of the whole chain, Tian said. He said quality had also been a major problem inhibiting the export of farm products.