Support for Chinese agricutural sector

- Last updated on GMT

Related tags: International trade, World trade organization

China has announced a slew of initiatives to boost its agricultural
sector in the face of rising imports and domestic producers
struggling to meet demand, reports Anand Krishnamoorthy.

The new initiative includes several policy proposals such as granting subsidies to certain crops, pruning taxes, providing increased financial support, better technological assistance and protection of farmland.

"Though China's agriculture has seen a favourable turn in grain production and an increase of farmer's income during the past year, it remains a weak link in the national economy as a whole,"​ said the policy proposal, which has outlined 27 areas.

The country became a member of the World Trade Organisation in 2001, and lowered the tariffs on agricultural imports to about 15 per cent. For the first few years afterjoining the WTO, China was able to post a surplus in farm trade but that trend was reversed in 2004 - a reversal which is expected to continue.

Experts estimate that the farm trade deficit will touch $5.5 million in 2005 and continue to grow due to the increased pressure on farm land.

Other measures outlined by the policy include water conservation, speeding up construction of rural infrastructure, improving the skills of rural labourers and encouraging livestock farming in areas where the feed is available. The broad outline of the proposal has been published, but the specifics are yet to be made available.China's steady decline in grain production over the previous four years was reversed in 2004, with growth of 4.8 per cent to 455 million tons. However, this will not curb imports due to rising local demand.According to experts, the effects of the rising imports will be limited on the domestic agricultural sector, given its size and willingness of the government to intervene. In the long term, they expect 5 per cent of China's grain requirements to be imported.

Related topics: Policy, East Asia, China

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