The droughts and flooding that have affected a fifth of the
country's arable land could lead to a decline in the autumn
harvest, agriculture experts have said, warning that the situation
could cause further inflation.
Dry weather has caused droughts in 22 of China's 31 provinces,
among them major grain production bases, resulting in a loss of
grain that was "greater than in previous years", the Ministry of
Agriculture said.
About 11 million hectares of arable land have been struck by
drought so far this year, 1.7 million hectares more than last year,
said ministry figures.
Meanwhile, floods have submerged about 8 million hectares,
pushing the total amount of disaster-hit land to about a fifth of
the country's 100 million hectares of arable land.
Song Tingmin, vice-president of the China National Association
of Grain, estimates the autumn harvest will be 10 percent smaller
than normal due to the weather.
The autumn harvest usually accounts for 70 percent of the annual
grain production.
Therefore, despite a slight increase in the summer harvest,
overall production for the year could be down by 5 percent, Song
said yesterday.
The researcher's prediction came as Vice-Premier Hui Liangyu yesterday urged the country to do
everything possible to maximize the autumn grain harvest this year,
despite serious natural disasters that have affected production in
some areas.
Hui said having a good harvest would ensure the country's grain
security, a rise in farming income and adequate market supply.
Hui made these comments during a tour of eastern Jiangxi Province, a major grain production
base that has been stricken by drought this year.
Although the country's grain output has been rising for three
years in a row, some farm products are still in short supply,
farmers are vulnerable to natural disasters and domestic prices are
often affected by international prices, Hui said.
Still, the National Grain and Oils Information Center, a
government-funded grain market supervisory body, gave optimistic
forecasts for the autumn harvests in its latest release.
Despite the drought that has hit major corn production bases,
including northeast China, corn production is on target to hit 149
million tons, representing a 2.42 percent increase over last
year.
The center also forecast that the country's rice output would
exceed last year's harvest of 183 million tons by about 3 million
tons if the weather were normal.
But an official from the center said the figures were mainly
calculated according to the sowing area, and that the effects of
the disasters remain a complicated issue.
The expanded sowing area and remedial measures such as
post-flood re-sowing could help close the gap, said the official,
who declined to reveal his name.
"But we are not optimistic," said the official.
The center has also recognized that the flooding in northeast
China would lead to a sharp decline in the already bleak soybean
harvest.
The autumn harvest has the center of much speculation because of
fears that a shortfall in output could fuel further price
hikes.
The CPI grew steadily during the first half of the year, ending
with a 5.6 percent rise last month. The government has treated
rising food prices -- fuelled by the rising grain price -- as the
major reason behind the soaring index.
Cao Changqing, dean of the price bureau under the National
Development and Reform Commission, said at a press conference last
month that the autumn harvest would be the most decisive factor for
the CPI of the latter half of the year.
Song shared this opinion.
"Given the tightened food supply in the international market,
the decline in domestic grain production could lead to more price
hikes," said Song.
But Song said that given the country's abundant food reserves, a
slight decline might not "necessarily" lead to an instant price
hike.
"If the movement of grain circulating in the market remains
smooth and the amount of food commodities on the market remains
abundant, further price hikes could be avoided," said Song.
The State grain stocks have been buying grain from farmers,
offering the minimum price possible to ensure farmers earn a
profit, but the mechanism has been criticized for taking a long
time to bring the grain to market.
(China Daily August 22, 2007)
