Winter wheat reduced by drought, policy measures introduced control of agricultural prices

Since the beginning of autumn last year, most of China’s northern China’s grain-producing regions have not experienced effective precipitation. Analysts generally believe that the continuous drought will determine the impact on the yield of winter wheat, but the extent of the impact will be determined by the subsequent precipitation. At the same time, the State Council issued ten measures in a timely manner to further promote grain production and provide guarantees for stabilizing grain prices.

Since October last year, the precipitation in the northern winter wheat producing areas has continued to be low, and the dry conditions in the production areas of Hebei, Shanxi, Shaanxi, Shandong, Henan, Jiangsu, Anhui, and Gansu have been exposed and continued to develop. On February 4, the Ministry of Agriculture began to initiate secondary emergency response to drought. Recently, the winter wheat in various production areas in China has gradually entered the returning green period, and the water demand is increasing. If precipitation is difficult to safeguard, the drought situation will continue and the impact will be even more serious, even affecting the output of summer grain in China.

According to Reuters, the Food and Agriculture Organization of the United Nations (FAO) said that the severe winter drought in northern China's wheat producing areas may affect China's winter wheat production. Winter wheat accounts for about 95% of China's total wheat production, and China is the world's largest wheat producer and consumer.

Last week, FAO issued a report saying: "Since October 2010, China's winter wheat main producing area - the rainfall in the North China Plain is much lower than normal, so the yield of winter wheat harvested in June is worrying." Although the drought in winter has not affected winter wheat productivity so far, if the drought persists in the spring, or if the temperature in February is lower than normal, the crop situation may be very serious.

FAO believes that the drought in northern China has continued to push up prices of Chinese wheat products. In January, the average retail price of wheat flour in the country rose 16% year-on-year, which was more than 8% higher than two months earlier. If the drought continues further, international wheat prices will therefore be pushed up.

For the concerns raised by FAO, Maung Feng, an analyst at Eastern Agritech Consulting Co., Ltd., said: “This possibility is not ruled out. The water requirement for winter wheat seedlings continues to increase if the 'rainwater' in China's 24 solar terms (February 19). In the main wheat growing areas of winter wheat, there is still not enough rainfall, so the drought situation will worsen. If the national winter wheat output reaches 10 million tons, wheat imports will be unavoidable, and huge demand will push up international wheat prices. The increase will reach 20% to 30%."

However, Ma Wenfeng pointed out at the same time that, based on the current domestic drought analysis, winter wheat production will be reduced from the previously estimated 110 million tons to 108 million tons, and production will be reduced by about 2 million tons, accounting for about 2% of the total output. Ma Wenfeng further analyzed: “Before, the minimum temperature in the main winter wheat producing areas has been below zero degrees Celsius, and winter wheat is still in the hibernation stage, and the water requirement is not large. As long as the seedlings can survive, the water demand in the later period is guaranteed. It will not cause too much impact on the total output. The later phase will be the key phase."

On February 9, Premier Wen Jiabao of the State Council, while presiding over the executive meeting of the State Council, analyzed the current situation of grain production and studied and deployed policies and measures to further promote grain production. The meeting pointed out that to maintain stable grain output this year, it is of great significance for managing inflation expectations, stabilizing the overall level of consumer prices, and achieving stable and rapid economic growth and social harmony and stability.

The meeting decided that on the basis of the support policies that have been introduced in the near future, further increase support for food production and introduce ten specific measures to ensure agricultural production and stabilize prices of agricultural products.

In view of the domestic drought situation, the central government pre-arranged 1.2 billion yuan in subsidy for agricultural machinery purchases, which was mainly used by farmers in major wheat producing areas to purchase drought-needed pumps, sprinkler irrigation machinery, and other subsidies for drought-resistant and water-saving equipment, increasing the number of drought-resistant equipment, and improving agricultural machinery in arid areas. Equipment level.

In addition, the scope of subsidies for county-level drought relief service teams in drought-stricken areas will also be expanded and the construction of drought-resistant infrastructure will be intensified. After investing 4 billion yuan in the rural drinking water safety in drought-afflicted regions, and investing 4 billion yuan in the reconstruction of large-scale irrigated districts and water-saving projects, the central government will invest 2 billion yuan to continue the use of large-scale irrigation districts in dry areas to rehabilitate key projects and rural drinking water. The safety engineering construction can be mainly used for drought emergency water sources and field construction of irrigation districts as required.

Officials from the Ministry of Agriculture stated that although natural disasters will cause no small losses in China's food production each year, there is still room for China's grain to maintain stable production and increase production through the complementarity between regions and seasons. In addition, last year China's total grain output reached 546 million tons, and for the first time in 50 years, the amount of grain production for the first time continued to increase. China now has nearly 200 million tons of grain reserves.

According to data from the National Development and Reform Commission, China's grain inventories account for 40% of consumption, which is far higher than the internationally recognized safety level of 17% to 18%, and can fully guarantee the supply of domestic markets.