Widespread differences exist among mainland experts about what entry to the World Trade Organisation will mean for the country's agriculture and whether it will be good or bad for most Chinese. The United States is said to have agreed that until 2005 the mainland can limit grain imports to 5 per cent of its needs, equal to about 20 million tonnes. During the past 10 years, mainland hardliners have insisted that for strategic reasons the country must not become dependent on overseas suppliers like the US which could impose an embargo. Imports reached the 5 per cent level in 1988 and in 1995, when Beijing bought heavily in a bid to lower inflation. But Kong Xianzhi, dean of the Rural Economy Department at the People's University predicts that in eight or ten years' time, the mainland might be importing at least 8 per cent of its needs and perhaps as much as 10 per cent. Agricultural expert Wen Tiejin said: 'No one knows how much grain China will import. 'Imported grain could account for more than 10 per cent of the grain sold on the market.' Only a third of the country's grain reaches the market place and most of that is eaten by the peasants who grow it. Much of the grain sold to the state is unappetising hybrid rice and corn, which few city people want to eat. Most of it rots in warehouses and costs the state billions of yuan each year to buy and store. 'The difference in quality could mean that even non-quota foreign grain could be more competitive than domestic grain,' Mr Wen said. Beijing is committed to lowering the overall average tariff for agricultural products to 17 per cent. Much of the country's soybean is grown at a cost 80 per cent above the international norm. Soybean production will fall, and, as Beijing has agreed to cut export subsidies, exports of soybean, corn and rice are also expected to fall. The mainland will then overtake Japan as a net grain importer, predicts a study by the State Council Development Research Council. It paints an alarming picture of the consequences of WTO entry. It predicts 10 million peasants will lose their income, twice the jobs created by a predicted surge in textile and clothing exports. As much as 18 per cent of land will be taken out of production. In the next five years cotton and wool imports could shoot up 426 per cent and 86 per cent respectively. The report said the wages of rural residents would drop by an average 2.05 per cent after 2005 compared to what they would have been if the mainland did not enter the WTO. Mainland farmers stand to lose 5.5 billion yuan (about HK$5.1 billion) in annual earnings, the report calculated. Mr Wen said the increase in unemployment would not make much difference to the countryside as there were already 200 million unemployed rural peasants. Mr Kong said it would be better if the mainland imported as much as 20 per cent of its grain needs because it would allow it to concentrate on areas where it has a comparative advantage. 'We would be better off using the land for labour-intensive farming such as animal husbandry.' Mr Kong pointed to the experience of Denmark and the Netherlands where farmers switched into animal husbandry, raising pigs and cows, and gave up growing grain when exports from North America proved cheaper. By contrast, farmers in Britain and France tried and failed to protect their grain industry through protectionist measures, he said. Relieved of the burden of subsidising uneconomical crops, Beijing will be able to channel loans to rural areas which are starved of capital. Most of the ten million peasants who will move out of farming will therefore be able to find jobs in rural enterprises and in towns.
