Trade and markets
 

Detail

Area
China (Mainland)
Commodity Group
Oilseeds, oils and meals
Commodity
Soybeans
Date
01/05/2018
Policy Category
Production
Policy Instrument
Agricultural policy
Description
Renewed area-based payments and other incentives for farmers planting soybeans as part of broader efforts to curb the country\'s maize production.
Notes
Private sources reported that government efforts to stimulate soybean cultivation in China’s northeastern provinces have been stepped up this year. Reportedly, in Heilongjiang and Jilin, this year’s area-based payments will amount to CNY 350 per mu (USD 763 per ha). The payment comprises: i) a soybean producer subsidy of CNY 200, which exceeds payments provided in 2016 and 2017 by, respectively, 15 and 70 percent and is twice the amount provided to maize producers; and ii) a CNY 150 premium for farmers that plant soybeans instead of maize (see also MPPU Oct./Dec.’17 & May’18). Based on market prices observed in early May and depending on yield levels, the CNY 350 per mu subsidy is estimated to add 50–75 percent to the gross income per mu from growing soybeans. The provincial soybean-planting campaigns represent a continuation of China’s 5-year structural adjustment policy to shift land from maize to alternative crops. On the other hand, this year’s higher payments have also been linked to: i) a drop in the domestic soy/maize price ratio, which risked eroding the profitability of soybeans for Chinese farmers; and ii) increased policy efforts to reduce China’s reliance on soybean imports – also in light of the on-going Sino-US trade dispute. While official sources have reported a further expansion in the country’s soybean acreage this season, some private sources questioned the Government’s estimates.