Fri, February 13, 2009
Business > Economy > Severe drought hits N China

China's grain security sound amid north China drought: official

2009-02-12 14:14:08 GMT2009-02-12 22:14:08 (Beijing Time)  Xinhua English

BEIJING, Feb. 12 (Xinhua) -- China's wheat supply and grain safety will not be influenced by the worst dry spell in 50 years that has parched more than 40 percent of the nation's total wheat land, an agricultural minister said Thursday.

The country had enough grain reserves to regulate the market price, although the severe drought has increased the costs of wheat production, Vice Minister of Agriculture Wei Chao'an told a news conference.

China had seen a surplus from wheat harvests for five consecutive years, which ensures grain supply despite a fall in wheat production this year due to the drought, he said.

Wei was also confident of a good summer wheat harvest, but said it was too early to forecast the summer grain output.

"The harvest depends on further development of the drought and the results of drought-relief efforts," he said.

Analysts from the Research and Development Center of Jinshi Futures in Shanghai predicted that the summer wheat production might drop only 10 percent to 15 percent compared with last year, while wheat consumption would grow no more than one percent.

Therefore, the drought would have limited influence on grain supply in the long term, said Dong Shuzhi and Wu Jiaxi with Jinshi Futures.

According to Wei, the government had also provided 86.7 billion yuan (about 12.69 billion U.S. dollars) in subsidies to farmers in drought-hit provinces to help with their fight against the drought and ensure their income.

The cost of wheat production rose because crops needed more watering and fertilizing. Without government subsidies, a farmer would have to front these expenses as the price of grain is kept stable.

"Farmers will be unwilling to fight against the drought if the grain can not be sold at a high price," said Ding Shengjun, a researcher with the State Grain Administration.

China raised its wheat purchasing price for this year by about0.1 yuan to raise farmers' income and encourage grain production.

In addition, the central government has decided to earmark 400million yuan in drought relief for local governments.

The area of affected crops has dropped by nearly a quarter as of Wednesday from the peak on Feb. 7, according to the Ministry of Agriculture.

However, in the worst drought-stricken provinces, including Hebei, Shanxi, Anhui, Jiangsu, Henan, Shandong, Shaanxi and Gansu, there are still nearly 40 percent of wheat fields suffering from drought.

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