Chen Munian’s efforts are paying off. The 31.3 hectares of late rice he has been nurturing like a baby have produced a good harvest.

A farmer in Guangdong, Chen produces a large quantity of grains every year. Since 1995 when he contracted 20 hectares of rice fields for cultivation, he has been making a profit with his grain business. His secret? First of all, he follows market trends. The grain he chooses to grow is both productive and pest-resistant, which produces high quality rice. Secondly, he makes use of modern technologies. With the help of tractors, spray pumps, reapers, water pumps and air-blowers, farming is no longer physically arduous for Chen.

He lends his machine to his neighbors to help them realize what a cash cow growing grain can be if managed properly. At the beginning of this year, Chen was honored with several awards for his excellent farming work by local authorities.

Rising crop prices and preferential government policies have made Chen confident about his future as a farmer. He contracted another 11.3 hectares of fields this year to expand his operation. Farming could bring him even more money in the future, he asserted.

More Grain

Grain production in 2004 has exceeded expectations, as farmers returned to their farmlands with great enthusiasm. Both the early and summer seasons of crop production increased substantially—the early season rice grew by 4 billion kg and summer grain crops by 4.5 billion kg.

With 101.05 million tons of output and 4.8 percent of year-on-year growth, summer season grain production has reversed a consecutive four-year decline, thanks to the fast expansion of sown farmland. It is expected that in 2004 over 100 million hectares of farmland will be planted, 2.67 million hectares more than last year, as large areas of “abandoned” farmland revert to production.

One result, also a reason for such an optimistic agricultural prospect, is farmers’ fast growing income. National surveys in the first half of this year showed that the cash income per capita in rural areas reached 1,345 yuan ($162.44), 10.9 percent more than last year and a peak in the past eight years.

Du Qinglin, Minister of Agriculture, said he was pleased to see the changes in grain production. The Central Government’s preferential policies have encouraged farmers to return to their farmland and as prices grew, grain production was soon renovated and rural income hiked, Du said.

There was still hard work to do, though, Du emphasized, to realize this year’s agricultural and rural economic targets. At the top of the agenda is to continue to promote agricultural, and especially grain, production and implement government policies to facilitate reforms in grain distribution and agricultural taxation.

More Money

In Lianxing Village of the Ningxia Hui Autonomous Region, farmers carefully analyzed their expenses and revenues, reporting positive earnings in most cases. Ma Jianguo, a young farmer in the area, was very sure about the profitability of the year 2004.

His income statement, based on existing figures and his predictions, indicated a solid 6,400 yuan ($772.92) in retained earnings.

If taking into account government subsidies and an administration fee waiver, Ma said the net income could become even larger. He praised the government policy as the main reason for farmers’ alleviated financial burden and increasing incomes.

Researchers have noticed the trend as well. According to Zheng Xinli, deputy director of Policy Research Office of the Central Committee of Communist Party of China, farmers’ personal income and grain production growth highlighted the upward trend of agricultural production and rural economy during the first half of 2004.

The first reason for the growth, Zheng analyzed, was the launching of a series of government policies to protect farmers’ interests. Agricultural subsidies and tax exemption effectively promoted production. On top of the Central Government’s protective measures, local governments, in various degrees, added supporting funds for farmers. Inner Mongolia, for example, exempted agricultural taxes in six cities, amounting to 700 million yuan ($84.54 million). Government subsidy and tax reduction and exemption alone will make income per person in the area rise 110 yuan ($13.29)

Another important factor contributing to the income growth, Zheng said, was the rebounded grain prices and production volume. In the first half of 2004, the average grain price rise was 26.7 percent. Farmers in Jiangxi, for instance, made 98 yuan more revenue because of the price rise, accounting for more than half of the income increase.

Stabilize Grain Prices

All the improvement, however, didn’t resolve every challenge facing China’s farmers. While they are earning more, they also have to spend more, since both production and living costs in rural areas are rising. In places where the preferential measures are not effectively implemented, farmers are still heavily burdened by all kinds of fees. Some of the farmers, despite enjoying the current policies, are worried about possible unfavorable changes. Finally, economists say the price might drop again due to the good harvest and supply surplus.

To counter these challenges, experts said the primary task for the government was to stabilize grain prices and protect farmers’ interest as best as it could.

(Beijing Review October 16, 2004)