CHINA is gripped by the worst agricultural crisis since the start of the open-door policy as governments of all levels scramble to ensure sufficient grain supplies and to keep production costs down. Farming officials said regions including the northeast had reintroduced ration coupons to control the consumption of staples. This is despite claims that grain harvests this year will be on a par with the record 45.64 million tonnes last year despite bad weather. The State Planning Commission has announced a package of emergency measures to depress the prices of producer goods such as fertilisers and insecticides. This is meant to persuade farmers to grow grain instead of going after more lucrative economic activities. The semi-official Hong Kong China News Agency (HKCNA) reported yesterday that the commission and related units, such as price-monitoring departments, would 'strengthen management' over the wholesale and retail prices of production materials. 'We must resolutely investigate and handle cases of [sales outlets] raising prices indiscriminately, engaging in speculation, or selling inferior products,' HKCNA quoted authorities as saying. Beijing has also pledged to offer tax incentives and sufficient loans to producers and retailers of raw materials. Senior officials have indicated that the policy of forcing rich and industrialised areas to maintain a 'minimal quota' of farmland for grain production would be long-term. The quasi-official China News Service yesterday quoted the Alternate Member of the Politburo, Wen Jiabao, as calling on coastal administrations to 'give priority to and strengthen' agricultural development. 'Coastal regions must stabilise and develop agriculture,' Mr Wen said. 'They must uphold and perfect the party's basic farm policy.' Mr Wen said that while farmers could take a multi-pronged approach, they must protect arable land and not cut grain output. Several provinces, including Guangdong and Fujian, yesterday introduced a law to protect farmland. The provincial legislature stipulated that area under protection must not be less than 15 million mu (slightly over one million hectares). Severe grain shortages have hit less well-off provinces in the northeast and southwest. This is despite the fact that the central Government has used up substantial portions of national grain reserves. The Government of Guangxi, which was hit by severe floods in summer, has started a campaign called 'ensuring that everybody has rice to eat and does not suffer starvation'. In a throwback to the pre-reform era, a 'mass campaign' is being organised to ensure that the Government's target for grain procurement is met. Experts have estimated that by the year 2000, agriculture investments have to be increased by 700 billion yuan (HK$637 billion), about double the financial capacity of the Government and farming households.
