Friday, June 28, 2019

Agriculture: China's Domestic Soybean Production Push Withers As Subsidies Dry Up

From Nikkei's Asian Review:

Government fails on handout promise to farmers, stunting growth of crucial crop
DALIAN, China -- China's goal to increase soybean production to offset plunging imports from the U.S. is not going according to plan.

Beijing wants to increase soybean production 20% by 2020 over 2018 levels, as tariffs on American soybeans caused U.S. imports to fall 70%. But government subsidies aimed at encouraging growers to switch to soybeans have dried up, leaving farmers dismayed at what they see as broken promises.
"I don't trust the government because its support programs frequently change," said a farmer in his 30s in China's soybean capital of Heilongjiang Province, where 40% of the nation's soybeans are grown.

The grower had allotted 10% of his land to soybeans on the promise by the local government in February of a 150 yuan ($21.80) subsidy for every 667 sq. meters of land converted to soybeans. But the agriculture ministry suddenly nixed the subsidy in March, throwing the farmer's finances into disarray as he had already purchased seed and fertilizer for his new crop.

Soybeans are crucial to feeding the country. They are processed into bean curd, cooking oil and other food products, and the pomace is an important livestock feed.

The government was hopeful that a new seed -- developed under a $4.6 million grant -- would increase yields. According to its creator, the Research Institute of Soybean, the new variety doubles yields.

"The new seed will allow China to weather the trade war," said Cao Jujin, head of the institute, in reference to overcoming the dearth of American soybeans.
China is the world's biggest consumer of soybeans at 100 million tons per year, but relies on imports for 90% of this figure.

Brazil is the country's largest soybean supplier followed by the U.S. But Beijing slapped a 25% tariff on American beans in July 2018, causing imports from the U.S. to tumble 70% in the January-April period from a year earlier....MORE