Losing Domestice Agriculture(1)

After China entered the WTO, its agriculture industry has seen two important phenomenon that haven't attracted enough outside attention; one is the purchasing of soybean processing by foreign firms; the other is the batch of Korean, Japanese, and Taiwanese firms that are setting up new facilities here. Both will directly influence future agricultural liberalization policy, agricultural development, and may spur other transformations as well. 

China's soybean processing industry is gradually being taken over by foreign investors, which is well illustrated by the fact that here is only one large-scale pressing firm here that hasn't been acquired by a foreign investor. It is said that after 2007, the extraction industries will never again have purely Chinese-invested players. 

In recent years, China's average soybean output has been approximately 16 million tons. China's National Grain and Oil News Center predicts that for the 2005-06 harvest year, soybean consumption will reach 42.32 million tons. Among that, 32.5 million tons was extracted. 

Helongjiang province's peasant's make little profit from soybean planting, while the costs are increasing; approximately 1.22 yuan per half kg, a .08 yuan increase over 2005. According to recent soybean market price calculations, soybean planters will experience losses. According to Heilongjiang's most recent survey, 2007 will see a decrease in ten percent of soybean growing area. 

One-third of people in Heilongjiang rely on soybean-derived income for survival. With this deficit, an imported 20 million tons is necessary. But when more than 20 million tons is needed, with every extra 1 million ton imported, there will be 1.3 million citizens forced out of the soybean planting industry and possibly off of their land. Because each 1 million tons requires 1.4 million acres of plowable land, and per-capita land possession among Heilongjiang's agricultural population is 1.1 plowable acres, any fluctuationin soybean imports will affect millions of peasants. 

Then why not try growing something else? In western Heilongjiang, it is difficult to grow anything but soybean. The increase in soybean imports have already forced many domestic planters to reduce output, making their way of life difficult. 

Besides low soybean-oil extraction rates and high production costs, the subsidies of other governments are also important. In 2001 alone, US soybean subsidies totaled ＄19 billion, or 30 percent of export prices.