China Focus: Farmers cut grain cultivation as prices plunge

Plunging prices and changing tastes mean Chinese grain farmers are having to think carefully about what they plant this year.

"No more corn, that's for sure. It doesn't make money. And wheat is risky as it depends on purchases at set prices by local authorities," said Wang Cuifen, who farms 200 hectares in Shandong Province.

Wang has reduced her wheat crops by 27 hectares this year.

The provincial agriculture department estimates that farmers in Shandong have planted 8,333 hectares fewer hectares with wheat this year, in the first such reduction in eight years.

Agriculture is vital to feeding the 1.4 billion people in China, the world's largest grain producer and consumer.

In north China, wheat is the main grain for spring planting. It is due to be harvested in June, when farmers usually plant corn for an autumn harvest.

China's total grain output increased 2.4 percent year on year to 621 million tonnes in 2015, the 12th consecutive year of growth.

Despite that, China had a shortfall of between 20 million and 25 million tonnes in the amount of grain it produced and consumed in 2015, as Chinese developed a taste for more diverse grain choices.

Food imports reached a record 120 million tonnes last year, with soybean accounting for over 70 percent of the total. Imports of corn increased 80 percent year on year and rice 30 percent.

State granaries' large inventories and competition from imports have depressed grain prices in China, making life difficult for farmers.

With corn purchase season a month away, state inventories in northeast China's corn production bases already stand at 8.8 million tonnes.

Wang Cuifen said farmers would certainly cut corn production, and that they're desperate for corn strains with better quality and productivity to cater to new demand.

Farmer Zhang Baohua in Zhangqiu, Shandong, still has 90,000 kg of corn piled in his yard. It was harvested last year, when he balked at selling it at the prices offered at the time.

But the price sank further this year. Selling now would mean a loss of more than 30,000 yuan (4,623 U.S. dollars), according to Zhang, who has more than 20 years of planting experience.

Li Linjun, head of the grain bureau in Henan Province, one of China's major grain bases, said the local government has no room in its granaries to store new crops purchased this year. "Farmers will have a lot of difficulty selling grain this year," Li said.

Experts have been calling for agricultural reforms to reduce production of the undesirable low-quality grains that are currently taking up so much room in granaries.

The government should allow the prices of some grain varieties to float and provide subsidies for growers when market prices are too low for them to make ends meet, said Qin Qingwu, a member of the China Agricultural Economy Society.

China's 13th Five-Year Plan announced earlier this month has a big focus on improving the quality of agricultural products.

Agriculture Minister Han Changfu said China would change its approach from ensuring continuous growth in grain output to ensuring it is farming varieties of grain that are in demand. Authorities will put more stress on improving farmland and encouraging the application of new technology in farming.

"By relaxing control on grain output growth, the government can put more effort into upping food quality," said Ren Zhengxiao, head of the State Administration of Grain.

Having planted less grain, Wang Cuifen said she would seize the opportunity to rehabilitate her farmland and grow some organic vegetables. Endi