Subsidy success: Multi-billion cash handout to farmers helps China achieve bumper soy and grain outputs

20-Dec-2022 - Last updated on 20-Dec-2022 at 01:18 GMT

It is the eighth consecutive year that China’s annual grain production has exceeded 650 million tonnes, the food-security benchmark set by the country’s central government. ©Getty Images

China’s decision to provide additional subsidies to soybean and grain producers appears to have reaped rewards, with the state officials claiming the former increased by 27% and the latter hitting record levels.

Latest figures released by the National Bureau of Statistics of China (NBS) show that China’s total grain output amounted to 686.53 million tonnes in 2022, an increase of 3.68 million tonnes (0.5%) from last year.

Officials have presented this as a success story in enhancing food security amid COVID-19 disruptions, mounting global inflation, the war in Ukraine, and environmental troubles.

The total grain output constitutes the summer harvest, early-season rice harvest and autumn harvest across 31 provinces. Among them, 23 provincial regions showed growth in food production.

This new record signifies the eighth consecutive year that China’s annual grain production has exceeded 650 million tonnes, the food-security benchmark set by the country’s central government.

Approximately 633 million tonnes — an increase of 490,000 tonnes from 2021 — of the grain output comprised rice, wheat, corn, barley, sorghum, buckwheat and oats.

In addition, the total crop-growing area increased by 0.6% to 118.3 million hectares this year, although the average output per hectare is 0.1% lower than that of 2021.

Steady the ship

China is the largest grain producer in the world. Yet, food security has been a concern among Chinese policymakers in recent years.

The alarm sounded even louder in 2022 as a result of prolonged COVID-19 disruptions, and rising global prices of food and commodities driven by international tensions, including Russia’s invasion of Ukraine.

Earlier this year, the Chinese government stepped up efforts to promote domestic grain production and soybean self-sufficiency. These included the issuance of a one-off subsidy worth 40 billion yuan (US$5.75 billion) to farmers of rice, corn and soybean.

To reduce the reliance on imports, the area for growing of soybeans was expanded. This led to a 23.7% rise in soybean output. Despite less planting of corn, the high-yield crop saw an increase of 1.7%.

In a statement released by Wang Guirong, director of the NBS’s rural division, it is explained that rice output fell by 2% mainly due to droughts in southern China, while autumn rain had delayed the planting of winter wheat.
Nevertheless, Wang said that the bumper harvest has made ‘positive contributions’ to stabilising the global grain market, while providing ‘strong support’ for keeping inflation under control, it added.

“It has laid a solid foundation to cope with the complex and severe international environment, and to overcome various risks and challenges in terms of food security,” Wang added.