November 1, 2009｜China
Senior Economist, Norinchukin Research Institute, Co., Ltd.
In October 2009, I went around the northeastern region, which is China’s biggest grain-growing region, and investigated the production of cereals and the state of the harvest. My first visit in three years, the impression that most remained with me was the expansion of initiatives on organic cultivation and the reduction in agricultural chemicals. In Wuchang City in southern Heilongjiang Province—which is even known domestically in China as a production area for the japonica rice familiar to Japanese people—production of rice cultivated organically and of rice with reduced agricultural chemicals has expanded rapidly over the last few years. I would be amazed still further hearing the talk when visiting the “Wet-Rice Association”—of which one-in-ten farmers are members—and rice milling plants.
“Wuchang rice is a princess. There is no need to worry that she will fail to wed.” The first thing that the top official at the association voiced was a confidence in the rice produced locally. In Wuchang City the price of organically-cultivated rice is at least 30% higher than rice not cultivated organically. The farm sale price for brand-name organically-cultivated rice that is fragrant and of the highest quality—calculating at 20–24 yuan per kilogram and 15 yen to the yuan—comes to 18,000–21,600 yen for 60 kilograms. It is a level close to the farm sale prices for Japanese brand-name rices, including “Koshihikari.” The retail price of this organically-cultivated rice at supermarkets in Beijing is 36–40 yuan per kilogram. At 540–600 yen per kilogram, a five-kilogram bag comes to 2,700–3,000 yen, and is a price close to that of high-grade rices on the shelves of Japanese supermarkets.
The expansion of organic cultivation is not only for rice. Songyuan City in Jilin Province, which is one of the principal production areas for maize, is also a principal production area for millet, and the shipping firms and farm specialist cooperative association I visited in Songyuan City are also putting effort into the expansion of the production of organically-cultivated rice and millet. The production area contracted for organically-cultivated rice and millet in 2009 was approximately 1,500 hectares, but in 2010 the plan is to expand it two-fold to 3,000 hectares.
What Wuchang City and Songyuan City have in common is that the materials for production, such as seeds, organic fertilizer, and organic agricultural chemicals, are supplied in a unified fashion by associations, cooperatives, rice milling plants, and shipping firms, etc., and also the introduction of organic cultivation techniques and collection are taking place in an organized way. The Northeast’s organic cultivation is not the brainwave of farmers, but is continuing to grow into a regional initiative.
Organically-cultivated cereals, at the current level of technology, mean a reduction to a single harvest. Why, despite this, is the production of high-quality produce, such as organically-cultivated rice, now expanding rapidly? Needless to say it is “because there is the demand for it” and “because it fetches a good price.” The middle class, of a size which exceeds the population of Japan, is continuing to emerge within China with the development of the economy, and what such a middle class most has interest in is actually not cars and foreign travel, but safe, high-quality food.
The global prices of cereals surged from 2007 into 2008, and while they subsequently fell steeply, in the current situation they are at a level higher than the prices up to 2006. China’s domestic cereal prices are not widely fluctuating to the degree of international prices, yet they remain high. With high prices becoming an incentive, for the agricultural areas of the three provinces of the Northeast practically all of the agricultural land, including the hills, is being planted with them.
In this way, China, in order to satisfy the domestically expanding demand, is fully utilizing practically all its cultivable land. That notwithstanding, via the increase in population and rise in incomes in the future, the demand for high-quality food, such as organically-cultivated rice, will probably rapidly expand. Although for a time in Japan China’s rice exports to Japan had been talked about as a threat, actually it is completely the opposite way round. The opportunity is growing for surplus brand-name rice in Japan to gain customers in the Chinese market.
[Translated by ERINA]