Can China feed itself?

By Thomas C. Bartlett <T.Bartlett@latrobe.edu.au>, 10 September 1999

K. K. Chadha is the author of the article, China gears to dump hybrid rice, look to quality, not quantity, with a byline from Hong Kong. This report was published in the September 1999 issue (vol. 17, no. 9) of ASIA TODAY, page 15, ISSN 0813-2844, which has business offices in Sydney, Australia. (fax: 61-2-9913-2003; email: asiatoday@compuserve.com)

The Chinese Premier, Zhu Rongji, is said to be preparing to phase out hybrid rice cultivation and to abandon the government's pledge to purchase all rice irrespective of quality.

A Maoist discovery of the 1970s, hybrid rice enables farmers to obtain high yields and accounts for 45 million tonnes of China's annual 190 million-tonne grain crop. About half the rice cultivated in China is hybrid, but because of its taste no-one wants to eat it -- not even the peasants.

While hybrid corn can be fed to pigs, hybrid rice is sold to the state and rots in warehouses. The farmers keep better quality rice to eat at home and the surplus, along with corn, cotton, and wheat, is sold to the government at prices higher than those on world markets. People in the cities prefer fragrant imported rice.

The main function of hybrid rice is to provide propaganda, generating statistics showing record harvests. Now Beijing is pushing a new crop mixture, more in line with market demand, which, according to Zhu could save the government 35 billion yuan (A$6.41 billion, US$4.35 billion) annually. He is promising short-term pain but long-term gain for farmers. In other words, incomes will fall next year although, in the longer term, farmers will be better off if they grow the rice people want.

China is making a big push to introduce better seeds and to develop a type of high-yielding, high-quality hybrid rice. If it fails to do this, it will have to import new varieties that have been developed abroad.

Five years ago, Zhu's predecessor, Li Peng, became so worried about the possibility that may not be able to feed itself that he introduced policies which encouraged farmers to grow as much food as possible, irrespective of quality or cost to the state. Fouryears of record harvests followed. But experts say that, economically, China would have been better off abandoning subsitides and, if need be, imorting up to 10 per cent of its grain needs.

When he took office last year, Zhu made reform of China's grain management system his highest priority. He banned private grain trading and boosted the government's procurement, storage, and grain-sales monopoly. Retreating from market-oriented policies, he announced more subsidies for buying up all surplus grain, a move intended to boost reserves and stimulate consumer spending by lifting rural incomes. But these policies are understood to have cost the government an extra 200 billion yuan in the past year, and the grain distribution system is losing 15 billion yuan a month as market prices fall.

Thomas Bartlett
La Trobe University
Melbourne, Australia