Agriculture officials in China say the country needs to undertake supply-side reform, given bumper harvests and surplus grain stockpiles. In a news conference this week, China’s agriculture minister told reporters the country will no longer pursue increased grain output over the next five years, after 12 consecutive years of increasing harvests. Reuters reports that grain surpluses in China cause problems and put a financial burden on the government, which is obliged to stockpile crops at artificially high prices to support farm incomes. While output itself would not be raised, China will continue to work on boosting production capacity.
The agriculture officials also said raising farmer incomes will still be a priority over the coming five years although, with grain prices unlikely to rise, they added China must focus on agricultural industrialization, improving technology, and cutting costs.
Source: NAFB News service