Thursday, December 31, 2009

Livestock 2010: Serious Challenges

On December 29, the Ministry of Agriculture held its meeting to discuss work on livestock and animal disease control in 2010. The new agriculture minister, Han Changfu, and the vice minister, Gao Jibing, gave speeches.

The meeting conveys a sense of urgency about problems facing the industry. China's livestock industry is growing rapidly and experiencing rapid structural transformation. It faces the challenges of supplying the Chinese population's demand for animal products, avoiding food safety scandals like the melamine disaster, and preventing dangerous disease epidemics. Vice Minister Gao depicts the situation as grim and warns specifically of avian influenza, hoof and mouth disease and the threat of cross-border epidemics.

The meeting called for fully implementing "modern" livestock industry, and laid out 9 points for work in 2010 that reflect concerns about instability in livestock markets, problems with out-of-control rogue vendors, and animal disease. The solutions mainly involve reorganizing livestock, feed, and veterinary drug industries into fewer larger farms/companies that are easier to monitor and regulate. Lack of qualified veterinary personnel is a weak point in animal disease prevention reflected in the last couple of points. Here are the points for work in 2010:

1. Maintain an effective supply of livestock products and stabilize production of meat, eggs, and dairy. Implement the new round of the “vegetable basket” project for supplying food to cities, expand production capacity. Implement central government support policies for livestock, strengthen the system for disseminating good breeds and subsidies for them. Expand production capacity through grants to hog-supply counties, improve the egg industry. Set up a network of quality milk production bases. Continue strengthening livestock economy process monitoring and supervision, strengthen information publication.

2. Keep increasing the scale of livestock farms and standardize production. Work out the issue of conflicts over land for use by large livestock farms and environmental controls. Implement poultry and livestock record-keeping systems. Get farmers to work together to share experience and encourage adoption of Good Agricultural Practices where appropriate.

3. Strengthen food safety supervision/regulation. Quickly complete rectification program for milk purchase stations. Shut down uncompliant feed companies and milk stations. Thoroughly investigate people who deal in prohibited feed additives and drugs.

4. Implement basic pasture protection, balanced pasture and grazing rotation system. Reform pasture operations systems, push pasture contract operation regulation pilot programs. Organize and implement pasture protection projects. Strengthen pasture supervision system and pasture fire prevention work.

5. Strengthen animal disease prevention and control by implementing a system that specifies responsibilities at each level. Work on immunization, surveillance, reporting, quarantine regulation, emergency response and do a good job on emergency training drills. Strengthen guidance.

6. Strengthen regulation of veterinary medicines and enforcement of animal health regulations. Supervise production and use of veterinary medicines and promote concentration of the industry. Guide farmers in safe use. Organize and implement a veterinary drug residue monitoring plan. Monitor animal bacterial resistance, strictly monitor veterinary microbiology lab safety. Strengthen animal and animal product quarantine. Push animal tag and disease traceability system. Advance animal veterinary general legal compliance.

7. Coordinate issuance of national animal disease immunization system plan. Research veterinary drug “December 5” plan. Form important immunization and prevention medium and long-term plans, research improvement of disease prevention subsidy policies and standards. Integrate veterinary science resources, advance industry research relations.

8. Fully implement qualification exams for veterinary practitioners and continue establishing an official veterinary system. Implement veterinary training regulations. Step up rural veterinary and rural level immunization personnel training.

9. More international exchange and cooperation by veterinary personnel. Strenthen external affairs training for central and provincial personnel. Set up a reasonable national veterinary organization assessment system.

Wednesday, December 23, 2009

Pork Outlook for Spring Pessimistic

The Chinese pork sector is subject to cyclical ups and downs in prices. In Sichuan Province, 135 tons of live hogs went unsold at an auction, raising fears that the industry may be facing a downturn. The provincial government got concerned and sent a group of officials out to investigate the situation. Their preliminary conclusions are that there is not currently a serious problem with unsold pigs because it's the peak season for pork consumption (leading up to the Chinese new year). However, farmers are having trouble selling feeder pigs. Corn prices are up, cutting into profits. Pork demand will fall off in the spring months, so farmers are not eager to buy a lot of replacement pigs.

This year has been a mild roller coaster for Chinese pig farmers. The industry suffered losses in April-June due to a cyclical surge in supply and fears of catching H1N1 from pork. The industry recovered beginning in July. Now profits are still positive but shrinking due to a rising corn price. Farmers are not optimistic about the situation several months out when pork consumption reaches its seasonal lull.

Loans for Grain Price Support Purchases

The Agricultural Development Bank of China [the bank in charge of financing grain, cotton, and edible oil policies] issued a “Notice on Supply and Management of Loan Funds for Completion of Northeastern Fall Grain Procurement” to implement the central government's minimum price procurement policy. Branches of the bank are to supply funds to designated grain enterprises and Sinograin Co. from now until the end of April 2010 to purchase japonica rice, corn, and soybeans at minimum prices set by the government and to rotate grain reserves. Loans must be issued during the time when grain is purchased and according to the actual amount of grain purchased. Purchasers cannot refuse or limit grain purchases [from farmers]. The notice also directs banks to provide loans to fund subsidies and working capital for soybean crushing enterprises for purchase of soybeans.

Environmental "Problem Villages" Policy

Central government leaders announced that they will put priority on addressing serious pollution in "problem villages" that have serious environmental hazards that affect villagers health and impede rural sustainable development. The environmental protection minister made the announcement at a national rural environmental protection and ecological improvement work meeting.

The "using awards to promote governance" policy will be used to give financial awards to encourage the masses to address environmental hazards in rural areas, both developed and less-developed areas where rural people face health hazards. The Environment Minister said the central government will allocate 1.5 billion yuan to support 2160 rural environamental rectification and ecological improvement projects, combined with 2.5 billion yuan of local government funds. This is expected to benefit 13 million rural people and improve the appearance of most villages.

Wednesday, December 16, 2009

Returned migrants raising livestock

How 'ya gonna keep 'em down on the farm once they've seen Dongguan? Give them some subsidies and training!

In 2007-08, there were many reports of farmers abandoning small-scale livestock production. Now they are returning to the industry with a little prodding from Jiangxi Province officials. Early this year, the big concern was about rural migrants who lost their jobs in closed export factories. China's economic planners in Jiangxi apparently decided to put migrants to work in raising livestock.

According to Farmers Daily (Dec. 17), Jiangxi provincial officials claim that 90,000 returned migrants are now raising livestock. Of those, 42,000 set up their own farms, and 48,000 are employed on large-scale farms, in companies, and "production bases." They are reportedly tending 26 million animals and poultry. Officials claim that these farmers' monthly income is 511 yuan higher than it was working as migrants last year.

Provincial officials plugged migrants into the subsidy gravy train. They took advantage of national and provincial subsidies for sow and dairy cow insurance, breeding sow subsidies, good quality dairy cattle subsidies, interest-free loans, and training programs. Financial programs encourage "dragon head" enterprises, farmer cooperative organizations, farmer loans, joint lending, and dragon head enterprise loan guarantees to supply funds for returned migrants. Officials estimate that 2 billion yuan in financial capital has been supplied through various channels.

Livestock farming is encouraged through vertical integration: "Company + cooperative + farmer," and contracting arrangements similar to those in the U.S. where companies either supply animals to farmers and buy them back or where companies keep ownership of the animals while farmers raise them.

The provincial veterinary bureau has held many livestock training sessions to spread standardized production techniques, ecological methods, immunization and disease control, manure handling to support retunred migrants.

Thursday, December 10, 2009

"Develop the West" Reflects Imbalance in China's Economy

On November 30th a 2-day meeting was held in Guiyang, capital of Guizhou Province, to mark the 10th anniversary of the “Develop the West” policy and discuss improvements in the policy. Zhang Ping, chairman of the National Development and Reform Commission, Lin Shusen, the governor of Guizhou, and Du Ying, vice-chair of NDRC were the featured participants.

The policy is basically a massive investment project that pours money into China’s 12 western provinces to build infrastructure, industrial parks, and factories. This has an impact on the world agri-food system. China’s dominance of the world apple juice market, tomato paste exports, a big chunk of China’s cotton production, and rising trade with central and southeast Asia are linked to this program.

The meeting cited “great achievements” of the program. The growth rate of the western region exceeded the national rate in the third quarter of this year. The western region is in a “new stage of development,” and the program “faces many conflicts and issues.”

The western development strategy reflects the general imbalance in the Chinese economy--the strategy of maximizing GDP growth by building lots of stuff without regard to whether it's needed. The meeting warned that the western region still relies too much on investment for GDP growth, not enough on creating endogenous growth. Industries focus on mass-production of low-end products and many industries have excess capacity. Farmers face difficulty in raising their incomes.

The NDRC’s report urges the western region to follow the central government’s economic work conference directive to improve the quality and efficiency of GDP growth, re-orient the direction of economic development and industrial restructuring, promote reform and innovation. Other goals are to stabilize civil affairs and society. [In other words, arrest, jail or shoot all protestors, religious leaders, human rights lawyers, and troublesome journalists.]

The meeting stressed that support for the “develop the west” policy will continue. Focus will be “two continues” national strategy: continued infrastructure construction and continued ecological balance and environmental protection. Another strategy is “three investments”: investments in improving peoples’ livelihood, self-development capacity, and institutional innovation.

Wednesday, December 9, 2009

How to Stamp Out Christianity in Your Village

All sorts of religious movements have flourished in rural China during the last few decades. We can get some insights about the Communist Party’s approach to religion from a document apparently prepared to instruct village party leaders on how to stamp out religious movements in their communities.

The article discusses Xinzhai Village in Pingtang County, an “autonomous” region populated by the Miao minority (known as Hmong in southeast Asia) in Guizhou Province, south of Guiyang. The Miao have their own traditional religions, but Christian belief has spread widely among the Miao in China in recent years (as it did among Hmong in Laos in earlier decades).

The article reports that a Christian Church has been active in Xiuzhai Village since 1993. There were 23 people (in a village of over 2000 people) who joined the church activities--16 men and 7 women, ranging in age from 34 to 64. They not only believed themselves, but also brought family members to religious activities. After joining religious activities they relied on Jesus for sustenance, praying day and night. The article warns that “religious masses” neglect agricultural production, don’t see a doctor when they were ill, stopped participating in village undertakings, and didn’t get along with other villagers, causing discord in the village. The article says the more Christian families believed, the poorer they got. These people “were used by unscrupulous elements, becoming a hidden source of instability for the community.” “Instability” is the party’s main fear, so the party’s branch in the village went to work to stamp this out.

“The party branch enthusiastically put into play the effects of its basic fighting force to help religious people get free from the shackles of religious thought to concentrate on poverty alleviation.” The party branch organized a party member support system in which each party member was responsible for one religious household. The party member was to help them solve production problems where “each person has a helper, each household has a manager.”

The article describes Yang Shaogui, who believed in religion, hoping it would give his family peace. Two of his three sons had died in accidents. When his third son was killed by a wasp sting while gathering firewood in 2007, Yang and his wife lost their last means of support and became disheartened. They spent all day praying, neglected production and became poor.

The village set up a “party member support system,” and the village party secretary Yang Rongfu took them under his wing. At the end of 2007 they were offered rural welfare support to solve their poverty problem. They were resistant to receiving welfare, but village leaders did not give up. Party secretary Yang frequently brought comrades from the party branch to greet them in their home and brought gifts at holidays. His task was to help them gain confidence in their life, and guide them to see that old peoples’ religion can’t give them peace, nor can it solve food and clothing problems. The key is relying on their own hands to get a richer, better life. Through the patient education and guidance of the party branch, special care for their lives, the two old people’s concept gradually changed. Now the two have “come out of the shadows,” enthusiastically undertake production, and their life has stabilized. They get along with their neighbors.

The article concludes that religion appeals to the old, weak, sick, and uneducated. When they join the church, they are under the influence of other people and they hope for blessings, peace, and safety in the Lord. They lack common sense and discernment. It’s easy for them to be organized and cheated by cults and lawless elements. This presents a security risk and a threat to grassroots social harmony and stability.

The article argues that they are not actually true Christians because they don’t understand the doctrines and beliefs and have not gone through any official ceremony to join the church. It complains that they don’t understand or participate in officially recognized church organizations.

The article stresses that the communist party can’t just let this activity go unhindered. Each level of party organization must pay close attention to these movements and undertake propaganda work. “We have to address their poverty issues so religious people feel the warmth and care of party organizations, so we can guide them to develop production.”

The implied message is that religion is OK as long as it is under the party’s control. The supernatural doesn’t have credibility with a party devoted to “scientific development.” Religion has to be a materialistic, focused on giving people more material goods and promoting “harmony” in society.

Monday, December 7, 2009

Class system in Inner Mongolia village sparks outrage

A news report about a 5-class system in a village in Inner Mongolia crystallized some of the fundamental strains placed on China’s anachronistic rural land system.

According to the December 1 news report, Yinliuyao village, on the outskirts of Baotou City, has divided families in the village into five classes according to the year the family moved to the village. The first class includes those who settled in the village before 1963. The second class is those who settled there during 1963-75, third class 1976-85, fourth class 1986-96, and fifth class includes those who arrived after 1996.

The classes reflect waves of migration to the village. Some earlier migrants were resettled when their villages were flooded by new reservoirs. More recent arrivals came seeking urban jobs. Apparently, new arrivals were allocated shares of the village collective’s land, so they are entitled to compensation when village land is sold off.

The village, being on the outskirts of the city, has had its land gobbled up by developers (16 apartment buildings were recently completed). Older residents feel a sense of entitlement and don’t want to share payments fully with their newer neighbors. More recent arrivals (those with a lower class) receive less compensation when the village’s land is sold to developers. Class 1 families get 100% of the per-household compensation payment, class 2 get 85%, and so on, until the class 5 families get nothing. Note that fifth-class people could have lived in the village for as long as 14 years.

A researcher from the Chinese Academy of Social Sciences says he has never heard of this system. In most Chinese villages, compensation to a family is based on the amount of land contracted to them or the number of people in the household.

The class status in Yinliuyao village is inherited by children, so being a “first class” family is a valuable status. According to the article, young people seeking a spouse look for someone with “first class” status. A “first class” woman would never marry a second- or third-class groom.

The article attracted outrage from Chinese netizens. Dividing citizens into classes and allowing inheritance of class status smacks of “feudalism” and “imperial” exploitation for many who left comments on electronic bulletin boards.

The Baotou press office put out a semi-coherent rebuttal, claiming that the reporter misunderstands Chinese land policy. Interestingly, the Baotou rebuttal says not to blame their officials; if you want to place blame somewhere, blame the country’s land policy. Farmers get contract rights to farmland for 30 or 50 years, and the rights can be passed on to children. Baotou officials and academics say the situation is different in each locality. They argue that there are fundamental conflicts between various laws covering rural land, contracting, and village governance. It is especially difficult to tie land to families in areas where a lot of people are moving in and out. Baotou officials say this kind of class system is common in their region.

The class system has survived through the democratic process. The “first class” families are in the majority, so voting has upheld the system.

The “class system” reflects the increasing value of agricultural land and the movement of people. China set up its “household responsibility system” in the 1970s when no one could conceive of land as a tradable asset and villagers were locked into the villages they had inhabited for generations. Three decades later, land is a valuable asset and people are moving in and out, putting pressure on an anachronistic system.

In a market economy, valuable assets like land are traded through exchange. With no market for land and unclear property rights, conflicts inevitably arise over allocation of valuable assets. The right to perform the allocation itself becomes a valuable right, providing all sorts of incentives for corruption and nepotism.

The comments left on electronic bulletin boards regarding the “class system” reflect the cynicism of Chinese netizens:

“Not to speak of a single village, the whole country is separated into [classes]”

“Corrupt to the core”

“Are outsiders and Beijing natives the same? The capital city is like this, so it’s not at all strange that the countryside should be the same.”

“The people are the cheapest, so divide them into classes as you see fit”

“Baotou is chaotic, the government is the same. Everything is just a pyramid scheme. But no one oversees it.”

“Eliminate the residence registration”

“Strictly speaking, this is a result of the land contract system.”

“Chinese people are in 3 classes, city, rural, 'black households'”

“First class people are public servants, what’s so strange?”

“Old hundred names is always the object of bullying”