Anationwide rainfall and snow has brought some relief to the drought spell, but worries about this year’s winter wheat production have not been eased. One February 11, Mr. Chen Lei, Minister of Water Resources and Deputy Commander of the State Flood Control and Drought Relief Headquarters, pointed out, at a Drought Relief Consultation Conference held by the State Flood Control and Drought Relief Headquarters, that the precipitation only covered a limited scope and was not strong enough and crops are going to need more water when turning green, so China is still faced with a harsh situation of drought alleviation.
T e current drought has put much pressure on domestic grain price expectation. Recently strong gluten wheat futures in the country fl uctuated upward sharply and broke up RMB 3000 per ton on February 9. It goes with saying that it’s of great signifi cance to ensure a bumper harvest this year, as grain is the guarantee for the subsistence of population and grain prices serve as the basis of other prices.
Considering the booming population and expanding consumption capacity, China has brought up a “national plan for expansion of grain production capacity by 50 billion kilograms (50 million MT)” through the last few years. People in the grain sector believe that to stabilize and boost grain yield, in addition to strengthening the current drought relief to ensure summer harvest, it’s more important to focus on the establishment of a permanent mechanism. Specifically speaking, the country must ensure the inputs of production factors, such as capital and rural labor, promote the protection of cultivated land, and improve agricultural productivity as well as the ability to withstand natural disasters.
China has built its economy by means of rapid industrialization and urbanization for the past 30 years or so. During this process due to the outflow of large number of agricultural production factors, capital, land and rural labor force accelerated to gather up in towns and cities. T ere has been a scissors movement between the development fund of urban and rural areas, and between the income of urban and rural residents, resulting in a backward agricultural infrastructure and poor production conditions.
The current drought has exposed a major limitation on food production in China: the shortage of irrigation water. It’s hard to guar-


antee the quality of arable land and grain production capacity because of the generally backward agricultural water conservancy facilities and irrigation technology, which was a serious debt dated long ago. The agricultural production model of China is built on a single representative household, which decides that it’s difficult to organize large amounts of fund for the construction of water conservancy facilities. Therefore there is no enough arable land enjoying water conservancy and irrigation facilities. Basically people are still living at the mercy of “Heaven”. According to the statistics from the Ministry of Water Resources, out of the 1.83 billion mu arable land in China, 959 million mu are not cared with irrigation facilities, left to depend wholly on the “Heaven”; even the 867 million mu farmland with irrigation facilities can only use 46 per cent of irrigation water. The water shortage limitation is becoming more serious with the extreme weather and climate damage.
The No. 1 central document this year has focused on water conservancy by emphasizing that water conservancy construction and water damage relief are important to ensure national security and maintain social stability. It is foreseeable that China will witness waves of agricultural water conservancy constructions, which will ensure grain production with the support of water conservancy.
T e No. 1 central document also proposed to double the average annual investment in water capacity projects on the basis of 2010 in the next 10 years. Experts point out that to accomplish such a large investment, local governments must promise inputs and undertake initiative, as the construction of water conservancy facilities mainly promote public welfare. As an“operational-like public infrastructure”, the water capacity constructions usually last long, promise no quick results, and tend to see a low return. T erefore local governments need to take the leading role, ensure fi nancing, direct the infl ow of credit loan and private fund, and motivate and guide farmers to contribute their labor voluntarily.
Another severe limitation on China’s crop production is the incessant shrinkage of cultivated land. The situation is not optimistic for the nation to stick to the government’s “red line”(critical mark) of 120 million hectares of arable land. For one thing, farmland suff ers from intensifi ed desertifi cation; for another, vast expanse of superior arable land was occupied for quick urbanization or expropriated for real estate. Once the arable land for growing crops are taken and destroyed, it will be diffi cult and costly to reclaim them.
To tackle these problems, the Ministry of Land and Resources(MLR) and the Ministry of Agriculture (MOA) released a notice concerning strengthening and improving the delimitation of permanent basic farmland. The third delimitation of permanent arable land protection zones will be fi nished by the end of this year, which provides that the responsibility of protecting basic farmland will lie in villagers committees and lease-holding households and be submitted to five levels of authorities: town, county(city/section), city (prefecture), provincial (borough/city), and the country.
Recently China has provided farmers with “Three Exemptions & T ree Subsidies”, which exempt farmers from agricultural taxes, livestock taxes, and specialty products (excluding tobacco) taxes, while grant direct subsidies to grain growers and more subsidies for farmers to buy improved crop strains, agricultural machinery and tools. T ese incentives lightened farmers’ taxation burden. Besides largescale production has blessed farmers with better incomes. T eir enthusiasm to grow crops was aroused and thus less and less farmland was left wasted. T at’s why we were still able to achieve a bumper harvest even when there was a rare drought in the five provinces of Southwest China and a big deluge in the southern part. The income increases, however, were off set to some extent, by price hikes of agricultural production means. With a view to increase the comparative advantage of crop growing and stimulate farmers’ productive enthusiasm, the recent State Council executive meeting proposed to increase the eff orts to support food production, including extending drought-easing irrigation subsidies for winter wheat and raise the purchase prices of rice.
Since the end of last year, frequent water logging, fl oods, storms and other disastrous weather have been aff ecting grain production worldwide. T e industry is anticipating a new round of price fluctuation on the international grain market. T e problem of grain security in China, which was mainly caused by the large population, has attracted more attention, against the backdrop of a tightening grain supply globally. In no circumstances shall the problem of ensuring grain production be treated lightly. To fi ght the current drought we should base our efforts on improving drought relief ability and establishing a permanent mechanism to stabilize grain production.