South China Morning Post | January 29, 2002 | By Mark O'Neill in Beijing
Despite the nation being a World Trade Organisation member for less than two months, farmers in the northeast are feeling the impact in terms of rising stocks, lower prices and unpaid wages.
"WTO entry has had a big impact on us and is badly hitting the income of farmers," said an official at the grain bureau of Jilin province.
"Our production costs for corn are high." Jilin is China's biggest grain exporter, with annual sales of three million to four million tonnes, about half the national total. Last year it produced 19.5 million tonnes of grain, 80 per cent of it corn.
However, according to the China Economic Times, few buyers, domestic or foreign, want the corn this year.
It quoted Wang Shouchen, head of the province's Farm Bureau, as saying the period before Lunar New Year was usually the busiest, with buyers from the south rushing to buy corn for shipment.
"But this year no one has come and we have no major export contract. Last year the Jilin Grain Group had export orders for 800,000 tonnes and none this year. The province's grain stocks have reached seven million tonnes," he said.
"The impact of the WTO has just began. Worse is to follow."
WTO membership has made it easier for mainland companies to buy cheaper corn from abroad. Domestic prices are about 60 per cent higher than on the international market.
The main buyers, in southern and central China, are food companies and those which use corn to feed animals.
With the WTO, Beijing agreed to a tariff of 1 per cent on corn imports of 4.5 million tonnes in 2000, rising to 7.2 million in 2004, with the duty on above-quota corn at 77 per cent this year, falling to 65 per cent in 2004. It also has agreed to give non-state trading companies the right to trade 25 per cent of the quota this year, rising to 40 per cent in 2004.
Yushu city, one of Jilin's most important grain-producing areas with output last year of 2.25 million tonnes, is feeling the pinch.
At the end of last year its stocks reached 2.35 million tonnes, including 890,000 tonnes left over from before 1999. With a storage capacity of just 1.3 million tonnes, it has to rent space at 10 million yuan (about HK$ 9.37 million) for the year - money it does not have.
The city owes the Agricultural Bank of China five billion yuan and 100 million yuan to producers of farm machinery.
It is unable to pay wages promptly to the 12,000 people working in its grain warehouse and distribution companies. Some have not been paid for eight months and most receive a minimum living allowance of 200 yuan.
"Every day we farmers watch television and read the newspapers, to follow the international prices and China's farm policies," grain farmer Jin Xingrong said.
"You can see the concern written on our faces."
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