The crackdown comes as misuse of such chemicals has increased in recent years.

A draft of the revised regulation was posted on the website of the Legislative Affairs Office of the State Council on Wednesday for public comment by the end of August.

According to a statement on the website, the revised draft improves the current regulation, which was issued in 1997, in areas of a production register, quality control, marketing, and the use and administrative management of pesticides.

For example, the draft requires pesticide manufacturers to set up systems to record the raw materials and quality of products to ensure that every process in the production conforms to quality standards.

The draft also requires local authorities to conduct reviews of the registered pesticide products and to ban or limit their use in cases where there are risks to product safety, people’s health or the environment.

The move is seen as another major effort by the central government to address safety issues related to agricultural products after the State Council, the Cabinet, announced earlier this month it would ban 10 types of highly toxic pesticides from registration and sale.

China is the world’s largest pesticide producer and consumer, with pesticide production hitting 2.26 million tons in 2009, according to the National Bureau of Statistics.

At present, annual usage of pesticides in the country remained at 1.3 million tons, 2.5 times the global average, official figures showed.

The number of registered pesticide products in China has reached 27,000, a sharp increase from 9,747 in 1999. More than 2,000 companies are producing the chemicals, Ministry of Agriculture figures showed.

However, in recent years, incidents involving pesticide misuse have attracted growing concern among the public about food safety.

In February 2010, many provinces banned the sale of cowpeas that had been grown in South China’s Hainan province because high levels of the toxic pesticide isocarbophos were detected.

In April 2010, nine residents in Qingdao, East China’s Shandong province, were poisoned after eating toxic garlic that had been polluted with organic phosphorus.

“The central government needs to crack down on substandard products that are flooding the market,” an industry insider told China Daily on Thursday, without giving his name.

Li Shilin, director of the agricultural technical station in Anhui province’s Fengtai county, said technical services and guidelines on the proper use of pesticides are needed urgently among local farmers.

“Most farmers do not have enough knowledge of pesticides and currently their purchases and use of the chemicals are based on their limited experience,” he said.

“Excessive doses of pesticides used in agriculture can happen easily and may harm public health. But so far, many farmers have not realized this,” he said.

“We should not excessively turn farmland into urban areas. Grain security should be given priority,” Yang Weimin, secretary-general of the National Development and Reform Commission, the top economic planning body, said at a forum about urbanization strategy and planning over the weekend.

Yang said the country has approved more than 1,500 national- and provincial-level industrial development zones, the area of which account for nearly 1 million hectares.

“But not all places need to massively boost industrialization and urbanization. For example, we should leave major agricultural and ecological areas as they are and limit their urbanization,” he said.

Newly built urban areas in China had grown by 50 percent since 2000, while the urban population increase by only 26 percent during the same period, Yang said, which means the country’s speed in urbanizing land almost doubles the rate for the urbanization of the population.

Chen Xiwen, director of the office for the Communist Party of China Central Committee’s Leading Group on Rural Work, said last week that China’s arable land had declined by 8.3 million hectares in the past 12 years partly as a result of the country’s urbanization.

However, Chen said the pursuit of high urbanization was unnecessary and that ensuring balanced urbanization and rural development, and the development of both big and small cities, was more important.

City clusters, which have proven successful in countries such as Canada, Australia and Japan, could be effectively adopted in China’s urbanization, he said.

Each city in a cluster would have its unique function and develop specific industries. Better public services and residential functions in small cities and towns, and a more unified infrastructure network linking the big and small cities would help form an efficient city cluster.

The big cities could also transfer some of their functions to neighboring small and medium cities, to relieve the pressure brought by the growing population, he added.

Beijing plans to boost the scale and density of industries in its suburban areas, neighboring Tianjin municipality and cities in Hebei province, according to the capital’s draft 12th Five-Year Plan (2011-2015).

Downtown Beijing absorbs 62 percent of the city’s population and produces 70 percent of its GDP, which has caused problems such as worsening traffic congestion, said Zhao Hong, an economist with Beijing Academy of Social Sciences.

Transferring the capital’s industries such as manufacturing and logistics to neighboring areas will not only help form a more functional Beijing-centered city cluster, but also realize a population transfer, Zhao was quoted by the Beijing News as saying.

Doctor Fan Shenggen, director of the International Food Policy Research Institute (IFPRI), did not expect his comments criticizing China’s soybean policy of having double standards regarding GM soybeans at a meeting in China to incite resentment from America.

After the meeting upon returning to IFPRI headquarters in Washington, he received numerous calls and emails from American governmental organizations, representatives of grain giants and grain associations, informing him his words had gone against WTO principles of free trade.

Fan Shenggen is also the director of the international agriculture and rural development research center under the Chinese Academy of Agricultural Sciences. An internationally renowned grain expert, he believes China has made a strategic error regarding soybean policy which has led to the defeat of China’s non-genetically-modified (GM) soybean by its imported counterparts.

Actually, Fan Shenggen believes worries about China’s corn sector are more urgent and realistic. China’s corn imports increased by 56 times in the first seven months of this year on the level of the same period last year, totaling 282,000 tons. It imported 194,000 tons of corn in July, 148 times more than the previous July.

A Surge in Imports

Though this may not sound like much, this is the first time in 15 years that China has imported corn on such a large scale. The Financial Times has stated that, “the high growth rate of China’s corn imports has triggered people’s fears about the potential influence of China’s grain safety on the global agricultural commodity markets.”

Chicago corn futures have increased by over 50 percent in the past three months, reaching a historical high. Futures experts believe that this price increase is unreasonable and triggered by speculation.

However, other market players, the United States Department of Agriculture, and its Soybean Export Council and Grain Council, are full of high expectations. They even believe that China’s corn market will be as huge as its soybean market.

According to public reports, Thomas C. Dorr, President and CEO of the US Grains Council said recently that American corn providers might use their many years of experience opening China’s soybean market to open China’s corn market and eliminate Chinese people’s concerns about the safety of GM corn.

However, Chinese people’s views on GM corn are still greatly divergent.

In April the media reported that the New Hope Group, China’s largest private feed grain producer, imported a large amount of GM corn from America, which aroused public concern. Meanwhile, industry insiders are questioning the official figures on China’s corn storage.

The EO has learned from an anonymous source with the Ministry of Agriculture that up until now, China has imported 1.5 million tons of corn from America and has reached an agreement with the Argentinean government to import 5.5 million tons of corn in 2011.

America and Argentina are the two largest corn exporters in the world and almost all of their corn exports are GM corn. America’s corn exports account for 50 percent of global corn exports while Argentina accounts for less than 30 percent.

According to the above source, all of China’s corn imports for this past year and planned for next year are genetically modified. China’s largest state-owned corn importer is China National Cereals, Oils and Foodstuffs Corporation (COFCO) and its largest private corn importer is New Hope Group.

While the National Development and Reform Commission, the Ministry of Agriculture and the State Administration of Grain have attributed the explosion of China’s corn imports to the price gap between foreign and domestic corn, an anonymous high-level executive of the China Grain Reserves Corporation attributed the high imports to the official corn reserves being less than those of wheat and rice.

Fan Shenggen hopes China will not make the same mistakes regarding corn policy as it did with soybean. Latest statistics show, the dependence on foreign imports of China’s soybean sector has risen to 78 percent, and as early as several years ago foreign companies accounted for over 70 percent of China’s oil processing capacity.

The Myth of China’s Corn Reserves

China’s corn output and consumption volume have both exceeded 150 million tons in recent years. Around 90 percent of corn is used for feed and industrial consumption. Compared with wheat and rice, it is easier for corn to be influenced by the macro-economy.

The National Bureau of Statistics has revealed that China’s corn output reached 329.7 billion jin (a unit of measurement equal to 0.5 kg) last year, 3.9 billion less than that of 2008 while its corn consumption volume was 296.7 billion jin, a 7.8 billion jin increase on the level of previous year. A China Grain Net report has predicted that this year China will have a corn output of 330 billion jin.

Though it was widely believed that China’s corn output would be greatly reduced last year due to the major droughts suffered by China’s main corn production areas, data from the National Bureau of Statistics has shown that China’s output still exceeded demand. However, the data was kept secret until May and its accuracy was widely doubted when it was finally released.
Since March, the price of corn has increased progressively following the price surge of garlic and mung beans. It reached such a high price by April that even the National Development and Reform Commission and the State Administration of Grain were surprised. To rein in the corn price, the central government started a temporary auction of corn reserves on April 13. However, despite the sale of all corn reserves up for auction, the price of corn kept rising.

In the last ten days of May when the auction of corn reserves had been halted, the central government revised the trading rules of corn reserves so as to prevent corn processing companies from blindly hoarding corn, and continued releasing corn reserves; the price of corn decreased slightly. But less than a month later the price of corn resumed its upward climb and in August reached a new historical high of 1,976 yuan per ton.

Although at that time the price of wheat and rice also increased, the EO has learned from the National Development and Reform Commission, the Ministry of Agriculture and the State Administration of Grain that the central government is more concerned about the increase of corn prices. These three ministerial agencies have released dozens of policies to rein in the corn price increase.

The Strength of Downstream Sectors

What continued to drive up corn prices despite the Chinese government’s successive measures to tackle the increase?

While the National Development and Reform Commission and the State Administration have attributed the price rise to hot money, companies’ hording practices and farmers’ deciding to keep corn off the market, the EO has learned from many industry insiders that China’s corn demand now exceeds its domestic output.

Whether or not reserves are adequate is only one part of the whole picture. According to a high-level executive of New Hope Group, the volume of corn consumption increases every year thanks to the development of the livestock industry and its demand for feedstuff.

Another market player is foreign companies. Based on statistics from the China Feed Industry Association, by the end of 2008, there were 153 feed companies registered in Hong Kong, Macao and Taiwan, and another 282 foreign feed companies operating in mainland China. Compared with their Chinese counterparts, foreign feed companies usually possess large-scale investment, are larger in scope, and have high-level technology; most foreign companies are strategic investors.

A source from a Chinese feed company told the EO, foreign feed companies frequently expand their business in China through two methods: one is by being sole-owners and establishing subsidiary companies nationwide, a method preferred by Cargill Inc. and CJ Feed; the other is by conducting mergers or buying shares of other companies, a method used by ABN and Nutreco.

According to reports, foreign feed giants, including Cargill Inc. and CJ Feed, have been exploring investment options in the interior of China for the past few years, including large-scale agricultural investment.

For example, the Chia Tai Group has established over 130 feed companies, accounting for around 20 percent of China’s feed market. Other foreign feed giants, such as the Continental Grain Company, Purina and Cargill Inc., started establishing their position in China’s feed industry long ago.

The main downstream sectors of the corn industry are the cultivation industry and the processing industry, which have also been targeted by foreign countries.

In March 2009, the Chia Tai Group started a project in the Pinggu Distrcit of Beijing to raise three million layer hens. With a total investment of 582 million yuan, they can produce one-fifth of the total egg consumption volume of Beijing. The Chia Tai Group has also signed a contract to invest in the cultivation of 1.5 million layer hens, 15 million chickens and 50,000 pigs in Xinjiang.

The recent increase in meat and egg prices has further promoted the increased demand for corn. Conversely, the price fluctuation of corn will directly influence the prices of the above products. Without a doubt, this trend will continue even after the Spring Festival

December-delivery corn fell as much as 2.8 percent to $4.86 a bushel on the Chicago Board of Trade and traded at $4.8775 at 12:48 p.m. Paris time, after slumping 2.5 percent yesterday. November-delivery soybeans lost 1.3 percent to $10.9875, a second day of losses.

U.S. corn and soybean crops were being harvested at a faster-than-average pace, the U.S. Department of Agriculture reported this week. China said Sept. 26 it will impose duties on U.S. broiler chicken products, potentially reducing poultry production and demand for chicken feed.

“The poultry industry devours corn and soybean meal, and any attacks upon poultry exports will push demand down swiftly,” U.S. economist Dennis Gartman said in his daily newsletter. Breeders “can ramp up or ramp down production very, very quickly,” he said.

The U.S. poultry and egg industry uses about 100 billion pounds (45.4 million metric tons) of feed a year, according to the USDA. About 60 percent of the average U.S. poultry diet is corn, with another 25 percent from soybean meal, according to the University of Georgia’s Department of Poultry Science.

Chicken Duty

China this week slapped a duty of as much as 105.4 percent on U.S. broiler chicken products, citing a “causal relationship” between U.S. companies dumping at below-market prices and losses in the Chinese poultry industry. The country consumed almost 800,000 tons of U.S. chicken products in 2008, according to the USA Poultry & Egg Export Council.

About 27 percent of the U.S. corn crop and 17 percent of the soybeans were harvested as of Sept. 26, the U.S. Department of Agriculture said in a report. That compared with a five-year average of 15 percent for corn and 13 percent for soybeans.

“Harvest progress in the U.S. is spectacular, for corn as well as soybeans, thanks to very forgiving weather,” Paris- based farm adviser Agritel said on its website today. “Sales are nourished by harvest pressure in the U.S. and precautionary position closings ahead of the USDA report tomorrow.”

The USDA is scheduled to release its estimate of the nation’s quarterly stockpiles of soybeans, corn, wheat, and other grains on Sept. 30.

Weather Outlook

Dry weather during the next 15 days in corn and soybean areas would firm muddy soil and allow access for heavy farm machinery after rains slowed fieldwork, said Don Keeney, an agricultural meteorologist at MDA Information Systems Inc.

“Prices of corn and soybean are going down because of improved crop outlook in the U.S.,” which will continue to weigh on prices this week, said C.S. Oh, head of overseas futures at NH Investment & Futures Co., by phone from Seoul.

About 21 percent of the fields in Kansas, the biggest U.S. winter-wheat producer, were seeded, up from 11 percent a week ago, according to the USDA.

Wheat for December delivery slumped 2.5 percent to $6.6775 a bushel after touching $6.665, the lowest level since Aug. 2, amid favorable sowing weather.

“Winter wheat planting prospects in both the U.S. Midwest and Russia are likely to improve over the coming weeks due to forecast rainfall,” Luke Mathews, a Sydney-based agricultural commodities strategist at Commonwealth Bank of Australia, wrote in a report.

Milling wheat for November delivery traded on NYSE Liffe in Paris fell 3.9 percent to 202.50 euros ($275.60) a ton.

The northeastern region, including the provinces of Heilongjiang, Jilin and Liaoning, produces more than 30 percent of China’s total grains, according to the newspaper.

For thousands of years, the Chinese have been diligently cultivating their land. Blood, sweat and tears have been shed over their soil in the pursuit of favorable harvests. This reliance on the land for so many thousands of years accounts for China’s strong rural essence. The need for rice production has led the Chinese to pay particular attention to irrigation technologies, improving cultivation. The agricultural way of life, centered around rice, has had a strong influence on the social, economic, political and ideological developments of ancient China. In this sense, traditional Chinese culture may be considered a “rice culture.”

The cultivation of rice led to the development of an economic lifecycle centered around agriculture: ploughing in spring, weeding in summer, harvesting in autumn, and hoarding in winter. In ancient China, vast amounts of land, including the present middle and lower reaches of the Yangtze River region and North China region, were suitable for planting rice, with most Chinese working the land in particular ways during the different seasons.

First, rice is a central part of the Spring Festival (or lunar New Year) Eve dinner. On this occasion, Chinese families make New Year’s cake and steamed sponge cake from flour turned from glutinous rice. The cake is called “gao” in Chinese, a homophony to another “gao,” meaning high. People eat these cakes in the hope of a better harvest and higher status in the New Year. The cakes and the New Year’s dinner symbolize people’s wishes for a better future.

Second, rice dumplings are made on the 15th night of the 1st lunar month. This is the first day the full moon can be seen each New Year. People eat rice dumplings, known as Yuanxiao in the north and Tangyuan in the south (“yuan” means of satisfaction in Chinese), hoping everything will turn out as they wish.

Third, zongzi, eaten during the Dragon Boat Festival on the 5th day of the 5th lunar month, is also made of glutinous rice. It is said that people eat zongzi on this day to remember Qu Yuan, an official of the Chu State (about 340 BC – 278 BC), who committed suicide by jumping into the Miluo River. People throw zongi into the river to prevent fish eating Qu Yuan’s body.

Fourth, rice is made into “Double Nine” festival cakes on the 9th day of the 9th lunar month each year. As people have just harvested their crops during autumn they can make these cakes with fresh new rice. Many people also follow the tradition of climbing a mountain on this day.

Finally, people consume porridge on the 8th day of the 12th lunar month. The porridge is taken with rice, cereals, beans, nuts and dried fruit. It is said that Sakyamuni attained Buddhahood on this day, drinking chyle showed to him by a shepherdess, which he believes led him to enlightenment. As a result people bathe Buddha statues and eat porridge on this day.

This series of pepper’ photos were taken by Chen Yi works as a civil servant It took the photographer three months in 2003 to finish this group called ”Life”.

“We’ve already taken active measures to rectify the situation, including emergency irrigation,” he told Reuters on the sidelines of a conference in Beijing. “There is still time. The situation is serious, but if there is rain and if the harvest is later, I believe there won’t be a crop failure.”

“We’re adopting techological measures – artificial rain, irrigation – and are also considering replanting and adjusting the mix (of crops).”

Reuters