China's summer grain harvest a record, but deep inefficiencies remain

Harvest hits 136 million tonnes this summer but production remains far behind the US, with farmers relying on triple the fertiliser

PUBLISHED : Tuesday, 15 July, 2014, 2:59am
UPDATED : Tuesday, 15 July, 2014, 2:59am

China's summer grain output hit a record high after 10 straight years of growth, the government says, although analysts warned of the toll farming was taking on the environment.

More than 136 million tonnes of grain, mostly wheat, was harvested, up 3.6 per cent from last year, the National Bureau of Statistics said.

The yield per hectare increased 3.5 per cent over last year, the bureau said. But productivity was only 5 per cent of that in the United States, said Professor Dang Guoying, a researcher at the Rural Development Institute of the Chinese Academy of Social Sciences. Even reaching that level required large amounts of fertiliser - with Chinese farmers using three times the amount Americans did, Dang said.

Last year China produced 602 million tonnes of grain, about a quarter of the world's total estimated by the United Nation's Food and Agriculture Organisation. But the sector was far from globally competitive, as productivity was low and costs high, Dang said.

Most farms are small-scale, and farmers are focused on [the] short-term
Dang Guoying, Chinese Academy of Social Sciences

A key obstacle is irrigation, which remains relatively primitive and accounts for about a third of farmers' labour costs.

Fertiliser and pesticide also pushed up costs. "Most Chinese farms are small-scale, and farmers are focused on short-term interests," Dang said. They did not own the land, so they cared less about keeping it healthy, he said.

Senior agricultural official Tang Renjian said earlier this year China used 58 million tonnes of fertiliser annually, more than any other country. The global total was 176 million tonnes in 2011, according to the International Fertiliser Industry Association.

China also used 1.8 million tonnes of pesticide a year, said Tang, director of the office of the rural work leading group.

According to Ma Wenfeng, an analyst at Beijing Orient Agribusiness Consultants, part of the reason for China's consecutive increases in grain production was the government's push for staple food crops to replace non-staple ones.

The leadership included "moderate imports" in its food strategy at the national rural work conference for the first time last year.

Ding Li, a senior agricultural researcher at Beijing-based Anbound Consulting, said food imports were increasing because output was not growing as fast as demand and global market prices were cheaper.

The government controls the prices of major foods to protect farmers, but vowed earlier this year to gradually loosen its grip.

"In future, grain prices in the domestic market will be more in line with global prices, and China will have a more open position in global agriculture," Ding said.