by PressSupporting wheat production in China: a program from the government
Why it is important for China to support wheat production
The Chinese government is systematically pursuing a policy of reducing dependence on supplies from other countries. As part of this strategy, support for wheat production is being implemented, for which the authorities will allocate about 315 billion dollars. These funds will be sent to 11 regions of the country that specialize in the cultivation of grain.
In March this year, the government has already allocated about 253 million dollars to develop production. Such a decision was dictated by a statement from farmers about the state of winter wheat crops. They noted that the quality of the crop this season could be the worst in the history of the country. The allocated funds were used to improve grain-growing processes and such measures are expected to help increase wheat production.
An important point for China’s food security is to increase the yield of winter wheat. The most problematic in this regard are the five regions of the country where the sowing campaign was carried out later than planned. More funds were directed to these regions, which will go to stabilize production processes and reduce the negative impact of weather conditions. China is the world’s largest consumer of grain crops, and a reduction in yields amid rising prices could have a significant impact on the economy and its growth.
Last year, Chinese farmers harvested 20% less winter wheat than in the previous season. The reason was unfavorable weather conditions. In the current period, there is also a high risk of reduced production volumes. In addition to climatic features, global processes also affect the preservation of food security. Significant reduction in supplies from the two largest exporters led to an increase in grain prices, the cost of wheat reached record values for 14 years. In addition, shipments from these countries have been suspended, which disturbs the stability of the world market and forces importers to look for other suppliers.
It should be noted that the consequences of difficulties with grain supply have already affected a number of countries, which urgently take decisions to stabilize the situation on the domestic market. For example, the government of Tunisia decided to increase the purchase price of wheat and barley. In this way, the authorities hope to motivate local farmers to produce more grain. Tunisia has been experiencing a protracted economic crisis, and the rise in the cost of agricultural products on the world market seriously affects the recovery process.
Assessing the situation, Saudi Arabia decided to increase grain imports in order to freeze grain prices for itself. So, the country bought 625 thousand tons of wheat from Australia, the EU, as well as North and South America. Shipments are planned for October-November this year.