Crop Farming Primary Commodity China E- News

Transcription

1 Crop Farming Primary Commodity China E- News VOL.1 Issue 12, January 5, 2015 Copyright Guangzhou CCM Information Science & Technology Co.,Ltd

2 Contents Headline Editor's Note Policy Dynamics Revision on grain law draft completed State Council extends two agriculture related tax preferential policies 6 6 Central Government Treasury appropriates government transfer of USD5.56 billion to Agriculture Comprehensive Development Office in 2014 Four key points at 2014 Central Rural Work Conference Stability in agriculture, countryside and agricultural produce specified in Central Economic Work Conference Progress made by subsidy policy on initial processing facilities for agricultural produce in 2014 Focuses in supporting policies for agricultural produce processing sector Opinions on Guiding the Orderly Circulation of Rural Land-Use Right and Developing Appropriately Scaled Operations released Company Dynamics Changying Huo holds new general manager position of Starway Bio-technology CITIC Guoan Wine privately issues 313,807,530 shares COFCO Tunhe delists wholly-owned subsidiary located in Xinjiang s Yengisar Xinjiang Sayram Modern Agriculture issues private shares of about million Jinjian Cereals gains fiscal subsidies of USD3.81 million in Dec Crop Farming Dynamics China s agricultural product brands: strong regional characteristics and big development differences Three reasons for increases in grain output in China in 2014 Guangxi to establish largest industrial base for Se-enriched agricultural produce in China Mid- and low-yield arable land accounts for over 70% in China High pass rate of agricultural produce in 2014 Soil pollution threatens safety of agricultural produce in China National Qualified Agricultural Essence Center opens in Beijing Food Crop Primary Commodity Market Dynamics Increases seen in both sown area and output of grains in China in 2014 Regional comparison of food indexes in China in 2014 Sown area of winter wheat declines in Hebei Province in 2014 China initiates 2014/2015 temporary corn purchase and storage project Heilongjiang Province started to implement the China Corn Acquisition and Temporary Storage Policy Altogether 8 billion kg/a for grain production added in Hebei Province in Shandong Province: output of wheat and corn to increase by over 2 billion kg by 2020 China doesn't approve imports of MIR162 corn from Syngenta China's first corn starch futures listed on 19 Dec., 2014 Industrial Crop Primary Commodity Market Dynamics Planting area of winter rape sees 20% 30% YoY decline in 2014 Rapeseed: change of planting method causes 10% YoY decline in unit output in 2014 MOA: guidelines on scientific fertilization for winter rape Total output of cotton reaches 6.16 million tonnes in China in 2014 Vegetable and Fruit Crop Primary Commodity Market Dynamics MOA to formulate fruit brand catalogue Fruit and vegetable occupy 49% of geographical indications by primary agricultural products in China Ningxia Helan County: build permanent vegetable production bases Other Crop Primary Commodity Market Dynamics Largest tea trading center in northern China built in Shandong s Qingdao Natural Disasters Dynamics NATESC finishes overwintering investigations on major pests and diseases Disasters caused by continual rain in China in autumn 2014 Drought hits China in autumn 2014 Flood hits China in autumn 2014 Disasters caused by typhoon in China in autumn 2014 Frost hits China in autumn 2014 Heilongjiang's Raohe: over 200 ha of crops stricken by snowfall and fail Price Dynamics /63

3 Changes of average prices of major food in 50 cities in China in early Dec Changes of prices of major production means in circulation in China in early Dec Output of peanut with new production decreased and its price was high Price information of China's vegetables market on 1 Dec.-7 Dec Price information of China s fruit market on 1 Dec.-7 Dec Price information of international bulk agricultural produces market on 1 Dec.-7 Dec Market price of indica rice in China on 24 Dec., 2014 Market price of japonica rice in China on 24 Dec., 2014 Market price of indica milled rice in China on 24 Dec., 2014 Market price of japonica milled rice in China on 24 Dec., 2014 Market price of wheat in China on 24 Dec., 2014 Market price of bran in China on 24 Dec., 2014 Market price of flour in China on 24 Dec., 2014 Market price of sorghum in China on 24 Dec., 2014 Market price of conventional maize in China on 24 Dec., 2014 Market price of corn germ in China on 24 Dec., 2014 Market price of soybean in China on 24 Dec., 2014 Market price of vigna radiata in China on 24 Dec., 2014 Market price of vigna angularis in China on 24 Dec., 2014 Market price of potato in China on 24 Dec., 2014 Market price of rapeseed in China on 24 Dec., 2014 Market price of peanut in China on 24 Dec., 2014 Market price of cotton in China on 24 Dec., 2014 Market price of cotton linter in China on 24 Dec., 2014 Market price of cotton seed in China on 24 Dec., 2014 Market price of cotton seed expeller in China on 24 Dec., 2014 Market price of sesame in China on 24 Dec., 2014 Market price of sugar in China on 24 Dec., 2014 Import & Export Dynamics YoY indexes of exported crop farming commodity in China, Aug YoY indexes of imported crop farming commodity in China, Aug Imports of major agricultural produce in China, Nov Exports of major agricultural produce in China, Nov Imports and exports of major agricultural produce in China according to category and type, Nov Imports and exports of major agricultural produce in China according to SITC, Nov Corn and rice from Myanmar allowed to enter into China in common trading ways Total value of import and export of agricultural produce witness YoY increase in Guangdong Province in Jan.-Oct Price up and volume down seen in exports of vegetable in Guangdong Province in Jan.-Oct Guangdong's imports of edible sugar see YoY decreases in volume and price in Oct Guangdong's exports of traditional Chinese medicine see sharp YoY increase of 2.1 times in Oct Guangdong's imports of soybean see YoY increase of 19.2% in Jan.-Oct Guangdong's imports of cotton see YoY decreases in volume and price in Oct Fujian's imports of grains see large YoY decreases in Jan.-Oct Fujian's imports of wheat see YoY decrease of 29.4% in Jan.-Oct Fujian's exports of vegetable see YoY decrease of 9.2% in Jan.-Oct Fujian's exports of fruits see increase in volume and price in Jan.-Oct Shandong's imports of grains see YoY increase of 14.3% in Jan.-Oct Shandong's imports of soybean see YoY increase of 21.7% in Jan.-Oct Shandong's exports of vegetable see YoY increase of 6.4% in Jan.-Oct Shandong's imports of edible sugar witness YoY decrease of 30.8% in Jan.-Oct Xinjiang s exports of agricultural produce see increase in volume and price in Jan.-Oct Xinjiang's exports of ketchup see increase in volume and price in Jan.-Oct Xinjiang's import volume of licorice sees YoY decrease of 1% in Jan.-Oct Hebei's import value of agricultural produce sees YoY decrease of 1.5% in Jan.-Oct Hebei's import volume of soybean sees YoY decrease of 2.2% in Jan.-Oct Heilongjiang's import volume of grain sees YoY increase of 12.5% in Jan.-Oct Zhejiang's imports of edible vegetable oil see decrease in volume and price in Jan.-Oct Yunnan's export value of agricultural produce sees YoY increase of 20.5% in Jan.-Oct Hainan's exports of agricultural produce see slight increase in Jan.-Oct Shanghai's import volume of corn largely decreases in Jan.-Oct /63

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5 Editor's Note Despite the relatively tight arable land domestically, China still stressed the importance of arable land for grain production. In 2014, the sown area of grains reached million ha, up by 782,700 ha (0.7%) over Of this, the sown area of cereals (including corn, paddy, wheat, barley, sorghum, buckwheat and oat) was million ha, up by 854,100 ha (0.9%) over From 2004 to 2014, China witnessed continuous increases in total grain output for 11 years. In 2014, the total output of grains amounted to million tonnes, up by 5.16 million tonnes (0.9%) over Specifically, the output of cereals arrived at million tonnes, up by 4.58 million tonnes (0.8%) over However, the unit output in 2014 was just 5,385 kg/ha, up by 8.4 kg/ha (0.2%) over In particular, the unit output of cereals was 5, kg/ha, down by 4.8 kg/ha (0.1%) over Note: 1. All tables and figures in this issue are calculated by the same RMB/USD exchange rate (USD1=RMB6.1369); 2. Nuances in some data are mainly caused by rounding principle. 5/63

6 Policy Dynamics Revision on grain law draft completed On 21 Nov., 2014, the Legislative Affairs Office of the State Council of the People's Republic of China released that the National Development and Reform Commission (NDRC) had revised the new grain law which was drafted in Feb for public comments, and that the NDRC now solicits public opinions on the revised grain law draft. According to the draft, it is stipulated that the government shall establish complete subsidy and award principles for grain production, issue price support policy for key grains, set up grain target price system, improve grain price forming mechanism and raise farmer's incomes from grain production. State Council extends two agriculture related tax preferential policies On 3 Dec., 2014, in the State Council executive meeting presided over by Premier Li, Keqiang, two policies which had already expired, were announced to be extended to 31 Dec., The interest revenue made by financial institutions from small loans (less than USD8, RMB50,000) to farmers will be free from business tax, and only 90% of the interest revenue will be calculated in the payable corporate income tax. This will mobilize the financial institutions to loan to farmers. - The premium revenue made by insurance enterprises from crop and husbandry insurance shall enjoy a 10% discount in calculating payable corporate income tax, so as to expand the insurance cover and service for farmers. As farmers majorly demand loans from USD8, (RMB50,000) to USD16, (RMB100,000), the small loan shall be less than USD16, (RMB100,000), instead of the less than USD8, (RMB50,000) previously defined. Meanwhile, the 3% discount on business tax payable by county-level financial institutions from insurance shall be extended to the end of It is expected that the preferential policies for farmers will continue to work, propelling the development of agriculture and increase the income of farmers. The work related to agriculture, rural areas and farmers has been given top priority in government work. It is of great importance to strengthen food safety, increase farmers' income, quicken structural adjustment and further agricultural modernization through the improvement of fiscal and tax policies. This will help ease the problems like high costs and risks in agricultural loans, and hardness for low-income farmers to get loans. 6/63

7 Central Government Treasury appropriates government transfer of USD5.56 billion to Agriculture Comprehensive Development Office in 2014 The State Agriculture Comprehensive Development Office of the People's Republic of China announced on 1 Dec., 2014 that, by then the Central Government Treasury had accumulatively appropriated a government transfer of USD5.56 billion (RMB34.10 billion) to the State Agriculture Comprehensive Development Office. The appropriation accounts for 100% of the subsidy budget of the central government to local governments in the agriculture comprehensive development. Specifically, USD3.85 billion (RMB23.60 billion) was appropriated for projects of land control, mainly used for the construction of high standard water-saving and high-efficiency farmlands with guaranteed yields notwithstanding drought or water-logging and with stable and high yields, speeding up the improvement of the conditions for agricultural production, strengthening the ability to withstand natural disasters, effectively consolidating and improving the comprehensive agricultural production capacity, so as to ensure the smooth implementation of the Construction Planning for the State Agriculture Comprehensive Development of High Standard Farmlands. Another USD1.19 billion (RMB7.30 billion) was appropriated for projects of industrialized operation, in order to support leading industrialized enterprises and farmers' cooperatives to develop projects of planting, breeding, processing and circulation for competitively distinctive agricultural products, to effectively promote the development of agricultural industrialized operation, to make Chinese agricultural products become more competitive in the market and more able to ensure adequate supplies and to facilitate both agricultural efficiency growth and growth of income of farmers. Approximate USD0.52 billion (RMB3.20 billion) was appropriated for other projects of agriculture comprehensive development projects, to support the agriculture related funds integration of the experimental areas for modern agriculture comprehensive supporting reform and the construction of modern agricultural park in "Two Major Plains" of Heilongjiang Province, to accelerate the advancement of the modernization of agriculture, and to facilitate the transformation and upgrading of agriculture and sustainable development of agriculture. (Remarks: "Two Major Plains" refers to Songnen Plain and Sanjiang Plain, including 51 counties (cities and districts) of 11 prefecture-level cities of Heilongjiang Province and 114 farms supervised by 9 bureaus in reclamation area of Heilongjiang Province. The cultivated area of "Two Major Plains" accounts for over 80% of the cultivated area of the whole province. "Two Major Plains" is also the area where new agricultural business entities are most vibrant.) Four key points at 2014 Central Rural Work Conference On 23 Dec., 2014, China concluded a rural work conference in Beijing. Altogether four major points were discussed, including reform of farming system, reform of the rural land system, agricultural modernization and reform of agricultural produce price. Therefore, CCM believes that the 2015 No.1 Central Document will further the reform of countryside, agriculture and farmers. Also, CCM will continue to pay attention. The Central Rural Work Conference is an annual event for Chinese policymakers to deliberate on and map out rural policies for next year. Meanwhile, public comments will be solicited at the conference for the next No.1 Central Document. 7/63

8 Stability in agriculture, countryside and agricultural produce specified in Central Economic Work Conference On 11 Dec., 2014, the Central Economic Work Conference was closed. It is specified that China shall lay solid foundation for the development of agriculture, stabilize the upward trend of rural development, maintain the output of grains and major agricultural produce and increase the farmers' income continuously. All of these require China to continue to enlarge the input in agriculture and further to deepen the reform. The Central Economic Work Conference provides guideline for quickening the transformation on development pattern for agriculture. That is to step into an intensive development pattern emphasizing the balance of quantity, quality and economic returns, the improvement of competitiveness, the innovation in agricultural technology and the focus on sustainability. Progress made by subsidy policy on initial processing facilities for agricultural produce in 2014 On 19 Dec., 2014, the Bureau of Produce Processing, Ministry of Agriculture held a symposium for the implementation of subsidy policy on the initial processing facilities for agricultural produce. Accordingly, a central fund of USD97.78 million (RMB600 million) has been allocated in 2014, increasing by USD16.29 million (RMB100 million) year on year. Altogether 10,525 farming houses and 1,504 special co-operatives were supported for the construction of 18,000 initial processing facilities covering the storage, preservation and drying of agricultural produce. Statistics has it that the newly established storage capacities for potato and fruit and vegetable have reached 0.30 million t/a and 0.49 million t/a respectively. Meanwhile, the drying capacity for fruit and vegetable has been expanded by 0.35 million t/a. 8/63

9 Focuses in supporting policies for agricultural produce processing sector On 3 Dec., 2014, the Ministry of Agriculture of the People's Republic of China issued the Notice for Further Promoting the Implementation of Supporting Policies on Agricultural Produce Processing, stressing the supporting policies on the agricultural produce processing sector. 1. Fiscal policy covering initial processing in agricultural production areas, agricultural comprehensive development, povertyalleviation development, development of modern agriculture, etc. 2. Tax policy including processing value added tax and income tax, import tariff on processing equipment, export tax rebates, etc. 3. Financial policy on support for credit loan, innovation in financial products, fund raising of small- and medium-sized enterprises, listing of backbone enterprises, etc. 4. Investment policy mainly on grain and oil processing industries. 5. Insurance policy such as subsidy for agricultural insurance premium. 6. Supporting policy on science and technology to encourage the R&D, introduction and promotion of agricultural technology. 7. Preferential policy on the use of land and electricity included in land transfer, etc. 8. Supporting policy for micro-, small- and medium-sized enterprises on tax, employment security fund, small secured loan, etc. 9. Supporting policy for leading enterprises achieving agricultural industrialization. Opinions on Guiding the Orderly Circulation of Rural Land-Use Right and Developing Appropriately Scaled Operations released On 20 Nov., 2014, the Chinese government released the Opinions on Guiding the Orderly Circulation of Rural Land-Use Right and Developing Appropriately Scaled Operations. (1) Guiding ideology. The rural land under the collective ownership shall be adhered to, to separate ownership, contract right and use right. (2) Basic principles. It is not allowed to go against the contractors' will, damage the rights and interests of farmers, change the uses of land, harm the agricultural comprehensive production capacity or the agricultural ecological environment in the process of the circulation of land-use rights. (3) Improve the registration system for land contracting and use right. Perfect the contract and the register and issue ownership certificate. (4) Promote the confirmation, registration and certificate for land contracting and use right. The confirmation, registration and certificate for land contracting and use right shall be finished within about five years. (5) Encourage innovation of land circulation modes. Contractors are encouraged to transfer contracted land through modes including sub-contract, leasing, exchange, transferring and shareholding in accordance with the law. Under equal conditions, members of the collective economic organization shall have the priority of land circulation. Land circulation through transferring shall 9/63

10 be executed among members of the collective economic organization and shall be agreed by the outsourcers. Land circulation through other means shall be reported to the outsourcers to put on record according to law. (6) Strictly regulate land circulation. In the case of land contracting and use right belonging to farmers, the contractors shall independently determine whether to circulate the land, how to confirm the price and how to choose the means of land circulation and the profits from the circulation shall belong to the contractors. Without the written authorization of the farmers, the rural grassroots organization has no right to determine the contracting land circulation of farmers by any means. It is not allowed to attract investment by gathering all the contracted lands of farmers, in the name of adhering to the rule of majority. (7) Enhance the management and service for land circulation. If lands are circulated to the members of other collective organizations, or are circulated through collective organization authorized by farmers and are modified and improved with collective funds, the party outside the collective economic organization shall be charged for using infrastructure and the service for land circulation management, which will be used for the basic construction of farmlands or other public welfare expenditure. (8) Reasonably confirm the operation scale of land. Currently, supports shall be given to the party with operation scale of land times larger than the average contracted land of the local farmers, and the party whose farming income equals to the income from the local secondary and tertiary industries. (9) Support the large production of grain. Contractors and outsourcers shall negotiate and confirm the ownership of the original direct grain subsidy, subsidy for improved species and integrated subsidy for agricultural production means. The newly added subsidy shall give preference to the managing entities of grain production. (10) Enhance the control of the use of land circulation. It is prohibited to execute illegal non-agricultural construction in the name of land circulation. Building tourism resort villages, golf courses, villas and private clubs on the circulated farm lands are strictly prohibited. Digging ponds, planting trees and other actions destroying planting conditions are also strictly forbidden. Destructing, polluting and occupying the idle farmlands and destroying infrastructure of farmlands are strictly prohibited. (11) Excerpt the fundamental effects of family operation. Key cultivation shall be provided to family farms that are mainly run by family members with professional and intensified agricultural production, whose main income are from agriculture. These family farms shall be enabled to guide the appropriately scaled agricultural operations and drive up the development of modern agriculture. (12) Explore new means of collective management. (13) Accelerate the cooperative management among farmers. Farmers are allowed to develop the industrialized operation of agriculture by contributing their right to contract and use land. (14) Encourage the development of modern planting suitable for enterprise management. (15) Intensify support for new agricultural managing entities. (16) Enhance the supervision on and risk prevention of contracted lands of farmers leased to industrial and commercial enterprises. 10/63

11 (17) Cultivate diversified socialized service organization. (18) Organize new education and training for professional farmers. (19) Exert the advantages and effects of supply and marketing cooperatives. Company Dynamics Changying Huo holds new general manager position of Starway Bio-technology On 18 Nov., 2014, Starway Bio-technology Co., Ltd. (Starway Bio-technology) claimed that Yunshou Ye, chairman and general manager of Starway Bio-technology, ceased the position of general manager because of his work. At present, Yunshou Ye holds 53,866,375 stocks, accounting for 36.54% of the company's total share. Yunshou Ye, as the actual controller, still take charge of the chairman and the member of board of directors remuneration and appraisal committee, the strategy committee. And Changying Huo will hold the position of the new general manager of Starway Bio-technology. CITIC Guoan Wine privately issues 313,807,530 shares On 20 Dec., 2014, CITIC Guoan Wine Co., Ltd. (CITIC Guoan Wine) claimed that it has issued the non-public new-added 313,807,530 A shares to the specific investors by USD0.78/share (RMB4.78/share). After the stock offering, its raised funds reached USD million (RMB1,499 million). The non-public issuing share listed on 19 Dec., About USD73.33 million (RMB1,050 million) was for the construction of marketing scheme, while about USD73.33 million (RMB450 million) was for the repayment of bank borrowings. There are nine issuing companies, which are CITIC Guoan Investment Co., Ltd., Jiangxi High-tech Industry Development Co., Ltd., China Universal Asset Management Co., Ltd., Taikang Asset Management Co., Ltd., Caitong Fund Management Co., Ltd., CCB Principal Asset Management Co., Ltd., Harvest Fund Management Co., Ltd., GF Securities Asset Management (Guangdong) Co., Ltd. and Harvest Capital Management Co., Ltd. The controlling shareholder and actual controller didn't change after the issuing finished. After the issue, CITIC Guoan Wine still is the biggest shareholder of the company, with the direct share proportion of 30.74%. COFCO Tunhe delists wholly-owned subsidiary located in Xinjiang s Yengisar On 26 Nov., 2014, COFCO Xinjiang Tunhe Co., Ltd. (COFCO Tunhe) announced that it had delisted its wholly-own subsidiary, COFCO Tunhe Yengisar Fruit Co., Ltd. (COFCO Tunhe Yengisar) located in Yengisar County, Xinjiang Uygur Autonomous Region. Accordingly, COFCO Tunhe Yengisar had had no regular operation activities since 2005, and did not obtain any certificates for its land and buildings according to laws and regulations. Therefore, the People's Government of Yengisar County took back its land and buildings. Through this delisting, COFCO aimed to improve the managing efficiency, optimize the resource distribution, lower the operation costs, and further collect the resources to develop main business. 11/63

12 Xinjiang Sayram Modern Agriculture issues private shares of about million On 22 Dec., 2014, Xinjiang Sayram Modern Agriculture Co., Ltd. (Xinjiang Sayram Modern Agriculture) announced that it had issued private shares to directional investors with a price of USD1.42 per share (RMB8.70 per share). The shares were Share A newly raised, totaling 59,540,229. Xinjiang Sayram Modern Agriculture intended to collect a capital of USD84.41 million (RMB518 million). Regarding the raised capital, Xinjiang Sayram Modern Agriculture planned to respectively invest USD45.63 million (RMB280 million) into a 1.50 million t/a activated calcium oxide production line, USD24.12 million (RMB148 million) into a technological reconstruction project of a cotton processing factory and USD14.67 million (RMB90 million) to enrich the capital flow. Xinjiang Sayram Modern Agriculture makes profits mainly from ginned cotton products. In recent years, the revenue from ginned cotton products in each year accounted for over 45% of the total. The cotton processing factory's technological reconstruction project this time is targeted at improving the processing technology for ginned cotton. Jinjian Cereals gains fiscal subsidies of USD3.81 million in Dec In Dec., 2014, Jinjian Cereals Industry Co., Ltd. (Jinjian Cereals) gained 3 subsidies, over USD3 million in total. As of 4 Dec., Jinjian Cereals got a special supporting fund, namely the Five Supports for Grain & Oil Processing Project of USD0.29 million (RMB180 million); As of 16 Dec., Jinjian Cereals obtained a discount fund of USD2.44 million (RMB15 million) from the Support to Agricultural Industrial Leading Enterprises Project; As of 19 Dec., Jinjian Cereals got 2 funds, one namely the Award Fund for Resource Conservation Projects of USD0.81 million (RMB5 million) from Changde Economic Development Zone, the other namely the Award Fund for Environmental Protection Projects of USD0.25 million (RMB1.56 million). 12/63

13 Crop Farming Dynamics China s agricultural product brands: strong regional characteristics and big development differences According to statistics released by the Ministry of Agriculture, the General Administration of Quality Supervision, Inspection and Quarantine and the State Administration for Industry & Commerce of the People's Republic of China in July 2014, the number of geographical indications (GIs) by agricultural products totals 2,838, of which 67% are primary agricultural products. Accordingly, the development of agricultural product brands can be divided into three categories: 1. Regions with advantages in both resources and economy, such as Shandong (358 GIs), Sichuan (244 GIs), Fujian (184 GIs) and Zhejiang (172 GIs) provinces and the Municipality of Chongqing (100 GIs). Under predominant natural conditions, these regions present abundant and special agricultural product varieties with large quantities and excellent quality. 2. Regions with moderate resources and economic conditions, or moderately developed regions with complementary resources and economic conditions, such as Hubei (154 GIs), Henan (121 GIs), Liaoning (118 GIs), Guangdong (110 GIs), Heilongjiang (102 GIs), Hunan (97 GIs), Shaanxi (88 GIs), Jiangsu (82 GIs), Shanxi (82 GIs), Yunnan (82 GIs), Jiangxi (80 GIs), Gansu (76 GIs), Anhui (66 GIs), Guizhou (66 GIs) and Hebei (61 GIs) provinces, and Guangxi Zhuang (87 GIs) and Inner Mongolia (59 GIs) autonomous regions. Although some of the regions are underdeveloped, they form specific advantages for the development of agricultural product brands, thanks to their excellent geographical conditions or historically long humane characteristics. 3. Regions with specifically poor resources or weak economic conditions, such as Xinjiang Uygur (57 GIs), Ningxia Hui (41 GIs), Tibet (12 GIs) autonomous regions, Jilin (48 GIs), Qinghai (28 GIs), Hainan (14 GIs) provinces, and Beijing (19 GIs), Tianjin (16 GIs) and Shanghai (14 GIs). Of these, some regions boast developed economy but are poor in agricultural resources, while some are weak in neither natural resources nor economic conditions. It can be seen that the development of agricultural product brands should first give full play to the natural resources to develop regionally specific agricultural products, then introduce funds for the technological innovation, scale expansion, brand promotion and added-value increase, and finally establish famous, qualified and specific agricultural product brands. It is noteworthy that of all GIs by agricultural products, 67% are primary agricultural products, followed by primarily processed agricultural products (24%) and intensively processed agricultural products (9%). Therefore, the development of primary agricultural product brands can resort to the development of regional brands with GIs by agricultural products at the core. 13/63

14 Three reasons for increases in grain output in China in 2014 On 5 Dec., 2014, the State Council of the People's Republic of China held a press conference, giving expositions to the grain production situation in China this year. Three reasons were stressed for the grain harvesting in 2014: 1. The planting area of autumn grain was expanded by 0.78 million ha (11.65 million mu) from million ha (1.19 billion mu). In particular, the planting area of high-yield corn was increased by 0.76 million ha (11.37 million mu). Thanks to the rising planting area and structural adjustment, the grain output was driven up by around 5 million tonnes. This partially offset the losses caused by disasters. 2. The regions not hit by disasters, such as Heilongjiang Province, witnessed distinct increases in output. This largely covered the losses in stricken areas. 3. The disaster stricken provinces in 2013, including Anhui, Hunan, Guangdong, Guizhou and Zhejiang provinces, saw recovered rises in output, since the conditions this year bettered. At the conference, the spokesman from the Ministry of Agriculture of the People's Republic of China (MOA) stated that the MOA was forwarding the formulation of a sustainable and strategically comprehensive implementation plan to assure the national grain safety, as China encounters problems in grain production, such as tightening production resources, aggravating ecological environmental pressure and lessening arable land and water resources. Guangxi to establish largest industrial base for Se-enriched agricultural produce in China Since 2012, Guangxi Zhuang Autonomous Region carried out a series of activities concerning the selenium (Se)-enriched agricultural produce. For instance, its Department of Agriculture of has issued the Development Opinions on Se-enriched Agricultural Produce in Guangxi Guangxi Zhuang Autonomous Region and the Local Standards on Se-enriched Agricultural Produce in Guangxi Zhuang Autonomous Region and has established Guangxi Se-enriched Agricultural Produce Association. As of the end of 2014, the region has set up 46 production demonstration bases for Se-enriched agricultural produce, covering an area of 2,800 ha (42,000 mu) and including over 30 products like rice, peanut, tea, edible mushrooms, grape, kiwi, vegetable and pitaya. Specifically in 2013, the total output value of the Se-enriched industry in Guangxi exceeded USD11.90 million (RMB73 million), increasing by over USD7.82 million (RMB48 million) over that in previous years. It is predicted that the output value will reach USD32.59 million (RMB200 million) in In China, about 72% of population in 22 provinces (regions) lives in Se-deficiency areas. However, Guangxi is rich in selenium resources. Statistics has it that the Se-enriched land area in only 4 cities (Nanning, Qinzhou, Beihai and Guigang) is up to 2.12 million ha (31.81 million mu). Moreover, the 18 Chinese Longevity Townships in Guangxi have been detected to be Se-existence areas. Therefore, Guangxi aims to establish the largest industrial base for Se-enriched agricultural produce in China and construct the China Se-enriched Agricultural Capital within 5 years or so. 14/63

15 Mid- and low-yield arable land accounts for over 70% in China On 17 Dec., 2014, the Ministry of Agriculture of the People's Republic of China (MOA) released the Report on the Quality Grade of the Arable Land in China. The arable land covering an area of million ha (1.83 billion mu) are classified into 10 grades: Grade 1 3 (high yield): million ha (498 million mu) and 27.27% of the total. The arable land presents relatively high productivity, having no obstacle factors as a whole. Grade 4 6 (mid yield): million ha (818 million mu) and 44.80% of the total. With suitable environment and climate conditions, some solid foundation for infrastructure and not obvious obstacle factors, the arable land plays a role in increasing grain output. By 2020, the newly established comprehensive production capacity will exceed 80 billion kg annual, on the basis that the basic productivity could be raised by 1 grade on average. Grade 7 10 (low yield): 34 million ha (510 million mu) and 27.93% of the total. The arable land shows relatively weak productivity and distinct obstacle factors. In a short term, it cannot be improved basically. It is required to continuously carry out construction regarding infrastructure and productivity. Grade million mu Area million ha Proportion, % Table 1: Basic information on quality grade of arable land in China Major areas Northeast China, Huang-Huai-Hai region, middle and low reaches of Changjiang River and Southwest China Northeast China, Huang-Huai-Hai region, middle and low reaches of Changjiang River, Southwest China and Gansu-Xinjiang region Northeast China, Huang-Huai-Hai region, middle and low reaches of Changjiang River and Southwest China Northeast China, Huang-Huai-Hai region, middle and low reaches of Changjiang River and Southwest China Northeast China, Huang-Huai-Hai region, middle and low reaches of Changjiang River and Southwest China Northeast China, Huang-Huai-Hai region, middle and low reaches of Changjiang River, Southwest China, Inner Mongolia Autonomous Region and areas along the Great Wall Huang-Huai-Hai region, middle and low reaches of Changjiang River, Southwest China, Gansu-Xinjiang region and areas along the Great Wall Loess Plateau, middle and low reaches of Changjiang River, Southwest China, Inner Mongolia Autonomous Region and areas along the Great Wall Loess Plateau, middle and low reaches of Changjiang River, Southwest China, Inner Mongolia Autonomous Region, areas along the Great Wall and South China Loess Plateau, middle and low reaches of Changjiang River, Inner Mongolia Autonomous Region, areas along the Great Wall, South China and Huang-Huai-Hai region Total 1, / Source: MOA 15/63

16 High pass rate of agricultural produce in 2014 On 17 Dec., 2014, the Ministry of Agriculture of the People's Republic of China announced that no big events concerning the quality safety of agricultural produce has happened throughout the country in The pass rates of vegetable, livestock & poultry and aquatic product reach 96.30%, 99.20% and 93.60% respectively. As a whole, it stays at high levels and sustains an upturn. Soil pollution threatens safety of agricultural produce in China At the end of Oct. 2014, the 4 th Strategic Forum on China Environmental Remediation Development was held. Accordingly, the soil pollution in China is very serious as a whole, along with strong potential risks in some regions. This has threatened the safety of agricultural produce. In addition, according to the Report on the Investigation on Soil Pollution in China jointly released by the Ministry of Environmental Protection and the Ministry of Land and Resources of the People's Republic of China, the excess standard rate of soil pollution nationwide has reached 16.10%. Therefore, the soil condition in China is not optimistic, calling for urgent restoration. National Qualified Agricultural Essence Center opens in Beijing On 7 Dec., 2014, the National Qualified Agricultural Essence Center located in the National Agriculture Exhibition Center opened. Accordingly, as an entity, it will explore the combination of online and offline sale patterns and lay out offline entities throughout the country, so as to establish a wide sale network covering varied agricultural produce. At present, nearly ten thousand kinds of qualified agricultural produce from ten provinces (regions) have been gathered in the center. All the produce reaches the world-level food safety standards, regarded as the concentrated demonstration of pollution-free, green and organic agricultural produce in Beijing. Food Crop Primary Commodity Market Dynamics Increases seen in both sown area and output of grains in China in 2014 On 4 Dec., 2014, the National Bureau of Statistics of the People's Republic of China issued a circular that in 2014: The national sown area of grains was million ha, up by 0.70% (0.78 million ha) over Of this, the sown area of cereals (mainly including corn, rice, wheat, barley, Chinese sorghum, buckwheat and oat) reached million ha, up by 0.90% (0.85 million ha) year on year. The national unit output of grains was 5.39 t/ha, up by 0.20% (8.40 kg/ha) year on year. Particularly, the unit output of cereals was about 5.89 t/ha, down by 0.10% (4.80 kg/ha) year on year. In addition, the total output of grains amounted to million tonnes nationwide, up by 0.90% (5.16 million tonnes) over Specifically, the output of cereals summed up to million tonnes, up by 0.80% (4.58 million tonnes) year on year. 16/63

17 Table 2: Sown area, unit output and total output of grains in China, 2014 Season Product Source: MOA Item Sown area, million ha Unit output, t/ha Total output, million tonne Summer grains Early rice Autumn grains Corn Rice Wheat Other cereals Beans Root and tuber crops Total Regional comparison of food indexes in China in 2014 Table 3: Sown area, unit output and total output of grains in China, 2014 Item Sown area, '000 ha Share of sown area Unit output, kg/ha Total output, million tonne Output share Annual grain 112, % 5, % Seasonal Summer grains 27, % 4, % Early rice 5, % 5, % Autumn grains 79, % 5, % Variety Grain 94, % 5, % Corn 37,076 / 5, / Rice 30,309 / 6, / Wheat 24,064 / 5, / Beans 9, % 1, % Potatoes 8, % 3, % Note: Due to the small digital computer automatic carry, the number of provincial in total is slightly different from the national number. Source: National Bureau of Statistics of China, CCM 17/63

18 Table 4: Sown area and proportion of corn, rice and wheat in China, 2014 Item Sown area, '000 ha Proportion of grain sown area Proportion of food sown area Corn 37, % 32.89% Rice 30, % 26.88% Wheat 24, % 21.34% Total 91, % 81.12% Source: National Bureau of Statistics of China, CCM 18/63

19 Table 5: Sown area, unit output and total output of grains in China by region, 2014 Ranking (by output) Region Sown area, '000 ha Proportion of grain sown area Unit output, kg/ha Total output, million tonne Output share / Total 112, % 5, % 1 Heilongjiang Province 11, % 5, % 2 Henan Province 10, % 5, % 3 Shandong Province 7, % 6, % 4 Jilin Province 5, % 7, % 5 Jiangsu Province 5, % 6, % 6 Anhui Province 6, % 5, % 7 Sichuan Province 6, % 5, % 8 Hebei Province 6, % 5, % 9 Hunan Province 4, % 6, % 10 Inner Mongolia Autonomous Region 5, % 4, % 11 Hubei Province 4, % 5, % 12 Jiangxi Province 3, % 5, % 13 Yunnan Province 4, % 4, % 14 Liaoning Province 3, % 5, % 15 Guangxi Zhuang Autonomous Region 3, % 5, % 16 Xinjiang Uygur Autonomous Region 2, % 6, % 17 Guangdong Province 2, % 5, % 18 Shanxi Province 3, % 4, % 19 Shaanxi Province 3, % 3, % 20 Gansu Province 2, % 4, % 21 Chongqing City 2, % 5, % 22 Guizhou Province 3, % 3, % 23 Zhejiang Province 1, % 5, % 24 Fujian Province 1, % 5, % 19/63

20 25 Ningxia Hui Autonomous Region % 4, % 26 Hainan Province % 4, % 27 Tianjin City % 5, % 28 Shanghai City % 6, % 29 Qinghai Province % 3, % 30 Tibei Autonomous Region % 5, % 31 Beijing City % 5, % Note: Due to the small digital computer automatic carry, the number of provincial in total is slightly different from the national number. Source: National Bureau of Statistics of China, CCM 20/63

21 Table 6: Regional ranking of sown area and unit output of grains in China, 2014 Ranking (by sown area) Ranking (by unit output) No. Region Sown area, '000 ha No. Region Unit output, kg/ha / Total 112,738 / Total 5,385 1 Heilongjiang Province 11,696 1 Jilin Province 7,065 2 Henan Province 10,210 2 Shanghai City 6,848 3 Shandong Province 7,440 3 Jiangsu Province 6,493 4 Anhui Province 6,629 4 Xinjiang Uygur Autonomous Region 6,270 5 Sichuan Province 6,467 5 Shandong Province 6,178 6 Hebei Province 6,332 6 Hunan Province 6,033 7 Inner Mongolia Autonomous Region 5,651 7 Zhejiang Province 5,979 8 Jiangsu Province 5,376 8 Hubei Province 5,913 9 Jilin Province 5,001 9 Jiangxi Province 5, Hunan Province 4, Henan Province 5, Yunnan Province 4, Fujian Province 5, Hubei Province 4, Tibei Autonomous Region 5, Jiangxi Province 3, Liaoning Province 5, Shanxi Province 3, Guangdong Province 5, Liaoning Province 3, Heilongjiang Province 5, Guizhou Province 3, Beijing City 5, Shaanxi Province 3, Hebei Province 5, Guangxi Zhuang Autonomous Region 3, Sichuan Province 5, Gansu Province 2, Anhui Province 5, Guangdong Province 2, Chongqing City 5, Xinjiang Uygur Autonomous Region 2, Tianjin City 5, Chongqing City 2, Guangxi Zhuang Autonomous Region 5, Zhejiang Province 1, Ningxia Hui Autonomous Region 4, Fujian Province 1, Inner Mongolia Autonomous Region 4, Ningxia Hui Autonomous Region Hainan Province 4, Hainan Province Yunnan Province 4, Tianjin City Gansu Province 4,076 21/63

22 28 Qinghai Province Shanxi Province 4, Tibei Autonomous Region Shaanxi Province 3, Shanghai City Qinghai Province 3, Beijing City Guizhou Province 3,628 Note: Due to the small digital computer automatic carry, the number of provincial in total is slightly different from the national number. Source: National Bureau of Statistics of China, CCM Sown area of winter wheat declines in Hebei Province in 2014 On 26 Nov., 2014, the Department of Agriculture of Hebei Province announced that this year the sown area of winter wheat throughout the province reached 2.30 million ha (34.51 million mu), 0.04 million ha (0.55 million mu) less than that in This can be mainly attributed to the pilot programs concerning the comprehensive treatment of overdrawn groundwater in the province which required a cut-off of 0.05 million ha (0.76 million mu) of wheat. Currently, all wheat in Hebei Province has entered into the tillering stage. Accordingly, the wheat is investigated to grow well. Meanwhile, a special fund of USD24.44 million (RMB150 million) was allocated by the provincial government for the promotion of water-saving wheat varieties in four cities in this autumn, including Hengshui, Cangzhou, Xingtai and Handan and covering 0.20 million ha (3 million mu) in total. Altogether 29 varieties have been promoted by experts organized by the agricultural departments before sowing. China initiates 2014/2015 temporary corn purchase and storage project On 25 Nov., 2014, the National Development and Reform Commission, the State Administration of Grain, the Ministry of Finance of the People's Republic of China and the Agricultural Development Bank of China jointly released a notice that the government would as from the day begin to purchase corn with flat prices over Specifically, the purchase price was USD368.26/t (RMB2,260/t) in both Inner Mongolia Autonomous Region and Liaoning Province, USD365.01/t (RMB2,240/t) in Jilin Province and USD361.74/t (RMB2,220/t) in Heilongjiang Province. The purchase will end at the end of April The purchase price of corn in China is 20% higher than the international corn price, aiming to support the domestic price and increase farmers' income. 22/63

23 Heilongjiang Province started to implement the China Corn Acquisition and Temporary Storage Policy Heilongjiang Province claimed that it started to carry out National Corn Acquisition and Temporary Storage Policy since 18 Dec., 2014, and the implemented period is as of 30 April, Corn in storage after acquisition must be the domestic corn produced in 2014, which meets the national quality products standard. As for the non-standard corn which the actual moisture and impurity are higher than standard index, it could storage only when the corn reaches the standard after the drying finishing and the non-standard corn is not allowed to be stored. The acquisition of non-standard corn is implemented by the Regulations on Relevant Issues Concerning the Implementation of the National Standard of Grain and Oil Quality and Supplementary Notice about 2014 Corn Acquisition Problems of Mildew Grain with Exceeding the Standard in the three Northeastern Provinces and the Inner Mongolia Autonomous Region. National temporary corn purchasing price is USD0.18/500g (RMB1.11/500g). Standardized by national the third standard corn produced in 2014, the specific quality standard is as follows. That is, the bulk density is 650g/L-685g/L, and the content of unsound kernels is within 8.0%, which mildew grain, moisture and impurity are within 2.0%, 14.0% and 1.0% respectively. The grade difference between adjacent grades is RMB0.02/500g. Besides, the listing purchasing price refers to the warehouse purchasing price that directly purchases from the farmers' specific warehouses. Altogether 8 billion kg/a for grain production added in Hebei Province in On 27 Nov., 2014, the National Information Construction & Publicity Work Conference on Agriculture Comprehensive Development was held in Shijiazhuang City, Hebei Province. Accordingly, Hebei government has continuously increased the input into agriculture comprehensive development. From 1988 to 2013, the fiscal fund put into this field reached USD2.85 billion (RMB17.52 billion) accumulatively. Furthermore, the government drove up a social investment of nearly USD3.10 billion (RMB19 billion), constructed an arable land of 2.46 million ha (37 million mu) and newly established a capacity of 8 billion kg/a for grain production. Shandong Province: output of wheat and corn to increase by over 2 billion kg by 2020 On 30 Nov., 2014, the Proposal Demonstration and Initiating Meeting of the Innovative Demonstration Project for Super High Yield Wheat and Corn was held in Jinan City, Shandong Province. Responsible person from the Department of Science and Technology of Shandong Province stated that the province would spend 5 10 years increasing the planting area of wheat and would drive up the output of wheat and corn by over 2 billion kg by 2020 in the province. In order to effectively deal with the new situation for grain production increasing rigid demand for grains, declining arable land and enlarging resource pressure, Shandong Province carries out the innovative demonstration project for super high yield wheat and corn. This will play a leading role in the production of wheat and corn in China. 23/63