Agriculture Reference
In-Depth Information
Other non-tariff restrictions on imports of agricultural products,
such as licensing, are to be eliminated. This includes restrictions on
mports of wheat from the northwest areas of North Amerca whch
may have TCK disease (a fungal disease).
The mport quota of 22 mllon tonnes s large compared wth the
historical level of imports. During the 1990s, the average annual imports
of grain were 9.0 million tonnes, and there were net exports of 0.8 million
tonnes annually. There was only one year, 1995, when grain imports
exceeded 20 million tonnes, and this resulted in a serious surplus of grain
on the domestc market. The 2004 mport quota s equal to 5.5 per cent of
the total output in year 2000—not a very large proportion—however, the
size of the domestic grain market is far smaller than total output, because
half of the gran output s consumed by farmers and does not enter the
market. Calculations show that the 2004 TRQ accounts for 11.9 per cent of
the domestic grain market. It is estimated that full utilisation of the TRQ
in the short run, without major structural adjustment, could mean the loss
of 9 mllon farmng jobs (Wang 2002).
Chna does not have a comparatve advantage n the producton of
major grains such as wheat, corn and soybeans. A comparison shows that
the average prces of these three products n rural markets n the perod
between 1995 and 2000 were 7 per cent, 30 per cent and 31 per cent higher
than their 2000 c.i.f. prices, respectively. It is not surprising, therefore, that
mports of soybeans and soybean ol are ncreasng rapdly. The domestc
price of rice is lower than c.i.f. prices, although its average quality is also
lower than that of imports. Thus, in the face of increasing imports, domestic
production of these grains will decline significantly.
In 2000 and 2001, cereal imports were at moderate levels of 3.15 and
3.44 million tonnes, respectively. Due to surpluses and the low prices of
grain in the domestic market,
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as a result of the over-supply since 1998, it
is unlikely that the TRQ will be fully used in the near future. However, the
TRQ is preventing domestic grain prices from recovering to their recent
levels. Meanwhile, soybean imports rose to the historically high level of 13.9
million tonnes in 2001, nearly as much as the domestic output (National
Bureau of Statstcs 2002). Ths has led to a large surplus n the soybean
market.
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