CHINA (10 May)
Total sown area for cereals in Mainland China was reduced by more than 15 percent, or 14 million hectares, from 1998 to 2003. As a result, the output of cereals declined by 17 percent, or some 79 million tonnes. The government is implementing several new policies in order to encourage farmers to increase grain production. The major policies include direct subsidies to farmers (about US$1.2 billion, or about US$20 per hectare), phasing-out of agricultural tax in 1-5 years (1-2 years in Northeast region), minimum grain purchasing prices, and strictly protecting farmland.
The 2004 winter wheat, accounting for some 85-90 percent of total annual wheat production, is in the late development stage and under favourable growing conditions. Planting of spring wheat is almost completed. Aggregate 2004 wheat production is tentatively estimated at 83 million tonnes, some 3.4 percent lower than in 2003, reflecting the lowest area since 1983.
Planting of 2004 maize is completed in most parts of China. Some discarded lands are reported to be used for maize production this season and some areas which are traditionally used for small cereal crops have been shifted to maize production as a result of government grain policies. However, the total planted area is expected to continue to decline this year, by 2 percent from the previous, due to strong prices of competing crops such as soybean and rice.
Planting of 2004 early double-crop rice was completed in April and planting of single-crop rice is underway. The aggregated rice area is expected to increase by some 4 percent from the previous area due to government support policies, especially minimum support prices (early indica 1 400 yuan/tonne, middle indica 1 440 yuan/tonne, and Japonica 1 500 yuan/tonne). Land productivity is also expected to increase due to more high-yield hybrid rice area and more application of fertilizer. The weather in most of growing regions is favourable for the early development of paddy rice.
Rice production in Taiwan is estimated to fall by 12 percent to a historical low of slightly more than 1 million tonnes this season due to area reduction and an ongoing drought in the southern region. Taiwan planned to cut rice production from 2001 levels by 10 percent in 2002, by 20 percent in 2003 and 22 percent in 2004 to allow imported rice based on WTO requirement. Wheat production is negligible and coarse grain production is very low.