China Agriculture View

China will increase spending on agricultural production by 20% this year amid warnings that climate change could spark a future food crisis .

Prime minister Wen Jiabao’s announcement of an extra 121 billion yuan (£13bn) to boost farm yields and raise rural incomes was a central part of his annual budget speech at the Great Hall of the People.

The government’s spending pledge also included extra money for renewable energy and improved power efficiency, but these environmental benefits were outweighed by moves to boost overall domestic consumption and a likely emphasis on intensive agriculture.

The short-term aim is to ease the impact of the economic crisis on rural dwellers, who account for more than half of the 1.3bn population. This group is considered a potential source of social instability because the average rural income is just a third that of the city. Wen said grain prices would be increased as an incentive for farmers to produce more.

Many Chinese people can remember the famines of the early 1960s which killed tens of millions of people. More recently, improved farming policies and technologies have given China a high level of self-sufficiency and growth. But the country’s top economic planning body warned that this would be hard to maintain.

Northern China, which accounts for 58% of the country’s food production, suffered its worst drought in half a century earlier this year, according to local media. Rising temperatures and over-use of water resources has continued to cause desertification, cutting the cropland available.

In the face of this, and continued industrial and urban development, it will be a major task for the coming year to be keep the area of arable land above 120 million hectares, Wen told the 3,000 delegates of the National People’s Congress, China’s parliament. This is the minimum that the government has long set for food security.

While China remains committed to high economic growth, and the consequent greenhouse gas emissions, it will continue to boost environmental programmes as well. Wen said spending would increase on wind, solar and nuclear power, as well as research on “clean coal” technology. China’s energy efficiency has improved 10% over the last three years. The output of carbon and sulphur emissions grew 5% slower than the economy in 2008.

The National Development and Reform Commission said China would introduce a regional climate change programme, shut small coal mines and power plants and continue to experiment with cap and trade emissions programmes.

China was praised for the large green component of the $586bn fiscal stimulus package it announced last November. According to the HSBC Climate Change Centre of Excellence, investment in energy efficiency measures, renewable technology and other efforts to ameliorate the impact of climate change accounted for more than 30% of the package.