The Ministry of Agriculture is forecasting an unprecedented
US$5.5 billion deficit in agricultural trade this year, according
to Ke Bingsheng, director of the ministry's Research Center for
Rural Economy.
"The country has become a net importer of agricultural products
three years after joining the World Trade Organization," said Ke in
a Thursday interview with China Daily.
The deficit results in part from wider market access to foreign
commodities as the country fulfills its WTO commitments to reduce
tariffs on agricultural goods and implements tariff-rate quotas, Ke
stated.
The hefty subsidies offered on agricultural products in some
Western nations are also a contributor, said Ke, as the practice
distorts world market prices.
However, mounting non-tariff barriers remain the biggest source
of frustration to China's animal products exporters. Such technical
barriers were a strong influence behind the US$636 million deficit
the country recorded in animal products trade last year.
This year, exports of these products totaled US$2.8 billion
through November, compared with imports of US$3.7 billion, a
deficit of US$855 million, according to the General Administration
of Customs.
Another factor contributing to the red ink in China's
agricultural trade is the strained domestic supply and demand
relationship, which has led to price hikes.
But Ke said the high import figures should not cause panic.
Even if China uses up its committed tariff-rate quotas in corn,
rice and wheat imports, they will contribute less than 4 percent of
the country's total consumption, meaning China's self-sufficiency
in grain still exceeds 96 percent.
The country's grain output will well surpass the targeted 455
million tons this year, Minister of Agriculture Du Qinglin on
Wednesday in Beijing.
But Chinese farmers are
feeling the pinch brought on by the influx of foreign products.
For example, by the end of December China will have imported 2
million tons of cotton, more than double its committed tariff-rate
quotas.
Although such huge imports benefit the textile industry in the
near term, it will adversely affect the incomes of cotton-growers
and ultimately undermine the development of China's cotton sector,
Ke said.
Edible oils, soybeans and other oil-bearing imports are likely
to account for 40 percent of the country's total farm produce
imports this year, meaning growers of these products are being hit
hard.
On a brighter note, farmers in coastal provinces such as
Shandong, Guangdong and Zhejiang are beneficiaries of expanded
fruit and vegetable trade. The Ministry of Agriculture predicts the
country as a whole will register a surplus of US$4.5 billion in
these products for the year.
Ke admits that the agricultural trade deficit is likely to
continue in the coming years, with supply-demand trends and
domestic policies having a stronger impact than WTO agreements.
Ni Hongxing, deputy director of the ministry's Agriculture Trade
Promotion Center, said it is still too early to conclude that the
China will continue running a deficit. His section, he said, is
brainstorming the issue and trying to pinpoint its development.
(China Daily, December 31, 2004)
