China's Famous Grain Base Preparing for WTO Challenges

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Last updated at: (Beijing Time) Wednesday, April 24, 2002

China's Famous Grain Base Preparing for WTO Challenges

State-owned farms in northeast China's Heilongjiang Province, the country's largest base for producing grain for the open market, have been striving hard to reduce costs and improve competitiveness.

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State-owned farms in northeast China's Heilongjiang Province, the country's largest base for producing grain for the open market, have been striving hard to reduce costs and improve competitiveness.

Lu Weifeng, head of Heilongjiang Provincial Administration of State Farms, said all the farms had been promoting the use of machinery and enlarging the scale of land management.

Lu explained that the efforts had been necessary to combat challenges arising in traditional farm production from China's entry into the World Trade Organization (WTO) since late last year.

Heilongjiang, with the country's most fertile land, is home to 103 farms which were created in the 1950s. The farms now employ over 300,000 people, and possess 2 million hectares of arable land, and are capable of producing 9 million tons of grain.

Tian Hongqi, head of Hailin State Farm, said three quarters of the 6,700 hectares of arable land at his farm were being operated by 100 farm workers.

And the farm had spent 10 million yuan (about 1.21 million U.S. dollars) in subsidizing another 500 farm workers, most of whom had been transferred to sideline production, including rearing cows and planting cash crops.

Zhu Guangyin, a farm worker star who has tilled land at Tian's farm for about two decades, was granted the right to rent 133 hectares of land for farming this year, 33 hectares more than last year. He spent over 200,000 yuan (about 24,096 U.S. dollars) in purchasing new tractors and sowing machines at the beginning of the year.

"I had little education, but the scientific service team organized by the farm provides us training free of charge, so I quickly knew how to operate these machines," said Zhu.

More and more farm workers from Zhu's farm are following suit.

Hailin Farm has decided to pump a huge amount of capital into the improvement of scientific services and the construction of water control and environmental protection facilities, as well as offering loans to farm workers for purchasing machines, said Tian Hongqi.

Tian is confident that this year, the cost of producing wheat, maize or soybeans on his farm will be lower than the imported varieties.

On joining the WTO on November 10 last year, China promised to slash its import tariffs for farm produce from 22 percent to 17.5 percent and also vowed to remove tariff barriers for farm produce.

Currently, prices for domestically produced wheat, maize and soybeans in China are higher than those from abroad by 20 percent to 50 percent.

A fellow with the Research Center for Agricultural Policies under the Chinese Academy of Sciences also believed it was imperative to promote machines in farm work and encourage farm production on a larger scale in order to turn out enough farm produce at prices lower than imported items.

State farm administrative official Lu Weifeng added that 102 other farms had been practising similar reform measures to Hailin Farm, and about half of the 300,000 farm workers will leave the land and move to other businesses, including the catering trade, grain processing and milk powder production.

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