China tilts farm subsidies to favour soybean, cut corn production

China is recalibrating its farmer subsidies to give soybean plantings an economic edge over corn in four of the country’s northern provinces, according to a joint statement from the ministry of agriculture and the ministry of finance published Tuesday.

The move, which will affect the provinces of Liaoning, Jilin, Heilongjiang and Inner Mongolia to the north of Beijing, targets regions where corn and soybeans already compete and is part of a multi-faceted programme to beef up China’s agriculture sector.

While the statement does not comment on the size of the subsidy, it said "the soybean subsidy is higher than that of corn," and encourages provinces "to concentrate subsidies on advantageous production areas."

China has set out a long-term intention of cutting its substantial corn stocks, which may have topped 300 million mt in mid-2017, according to the China agriculture yearbook. 

To that end, the government has set out a long-term strategy to promote ethanol production, discourage corn production in less productive areas and slash stocks to more manageable levels.

China is one of the world's biggest corn producers, growing about 216 million mt in 2017/18 according to the USDA.

It imported 97 million mt of soybeans.

Generation Xi

Amongst other initiatives proposed, the project also embraces a series of measures to professionalise the country’s farming system, identifying and nurturing leaders, youth farmers, managers and social service infrastructure to cultivate improvements in production and management.

It also sets out to train one million new, professional farmers and shore up farmers access to credit as well as expanding a pilot program of fallow land as part of crop rotation efforts.

The moves come as China is drawn into an unfolding trade spat with the US.