But as China moves towards being the center of potato production in Asia, the humble potato is now bringing wealth to some in western China who had been living in poverty.

Chen Chunlan, a potato farmer in Dingxi in northwest China’s Gansu province, now lives a satisfying life in her newly-built, well-furnished home.

Chen credits her potato fields for the improved standard of living — they provide her with an annual income of 70,000 yuan ($10,400).

But Chen clearly recalls the hard times not long ago, when local peasants often had to worry about their next meal.

“We used to grow wheat, but the meager harvest could barely feed us, let alone allow us to save some money,” said Chen.

In 2001, destitution even forced Chen to flee Dingxi to try to earn a living in another place.

Dingxi, with its cold and arid climate and hence low agricultural yield, has long been listed as one of China’s poorest regions.

In 1995, a severe drought hit Dingxi, and almost everything in the fields withered. But to the locals’ surprise, the potatoes survived the catastrophe.

“Potatoes are amazingly drought-resistant and can acclimatize well to Dingxi’s agricultural conditions,” explained Wang Yihang, the provincial potato expert.

Next year, the Dingxi government launched the “Potato Project” to popularize the cultivation of potatoes to guarantee basic food supply.

Dingxi grows more potatoes than any other city in China, boasting over 200,000 hectares of potato fields, or one third of the city’s arable land.

Thanks to the edible tuber, the city no longer has a food supply problem, and attention has shifted to making the “food of the poor” a major export.

“Some freshly harvested potatoes are transported to wholesale markets all over China on special trains, while others are processed in local plants,” said Yang Zixing, party secretary of Dingxi city, referring to the city’s 20 large factories that turn the smaller, unsuited-for-sale potatoes into starch or potato chips. Previously, these potatoes would have been discarded or used for pig feed.

Some companies have struck deals with Simplot, McDonald’s french-fries supplier, to grow and process high-quality potatoes.

The city’s potato-processing factories are the source for 25 percent of the local farmers’ income.

Dingxi’s success story suggests a bright future for potato cultivation in China, as cultivation of the tiny tuber rapidly expands into China’s western regions.

“Over 4.7 million hectares of arable land in China are now growing potatoes, up from 2.7 million in the 1980s,” said Wang.

“Most of the increased potato cultivation is in China’s poor western regions — the provinces of Gansu, Shaanxi and Qinghai, and the Ningxia Hui autonomous region.”

The potato has proven to be more suitable than rice and wheat for cultivation on western China’s arid, barren lands, playing a major role in relieving starvation in these regions.

Furthermore, surging demand for potato products like starch can galvanize these less-developed regions to quickly industrialize.

“Potatoes can be made into materials or ingredients that are needed in food processing, papermaking, pharmaceuticals, textiles and many other industries,” said Wang.

And although in China potatoes are traditionally not a staple food as they are in many other parts of the world, it is nevertheless an integral part of Chinese cuisine.

Potato-based snacks are also becoming popular in China, especially after western fast food giants like McDonald’s and KFC began selling french fries.

Given the market potential and adaptability to arid areas, the potato may well be a new industrial star in China’s west.

The trigger for the bull run may have been the idea that the potent bulb can ward off H1N1 swine flu, Morgan Stanley economists said.

That chimes with some anecdotal evidence. The China Daily reported last week that a high school in Hangzhou, a prosperous city in eastern China, had bought 200 kg of garlic and forced students to eat it every day for lunch to stay healthy.

“I don’t know about H1N1, but it can prevent ordinary colds,” Zhang Ping, 74, told Reuters at a vegetable market in Beijing. “Take me. I’ve not had cold for many years and every year I buy several dozen pounds of garlic.”

Others have been looking for darker forces behind the surge.

China Business News said coal mine bosses — who are often depicted as being both extremely rich and nefarious speculators — had been playing the garlic market, hoarding bulbs and hauling them between storehouses.

Garlic served as a case study of the asset price appreciation that Morgan Stanley thinks China will have to contend with after a flood of lending by banks to help fight off the global financial crisis.

In some parts of Shandong province, the wholesale price of garlic is up as much as 40-fold.

“Too much liquidity in any market can lead to speculation,” analyst Jerry Lou said in a research note this week. “The most recent evidence of asset speculation in China’s commodity markets has been for garlic.”

But a more mundane factor may lie at the root of it all.

Garlic prices were extremely low last year, convincing many farmers that it was not worth planting the crop again, a wholesale trader was quoted as saying in the Nanfang Daily.

Supply could not keep up with a pick-up in demand from home and abroad, sending prices sky-high, the trader said.

Yi Xianrong, a researcher with the Chinese Academy of Social Sciences, a top government think-tank, said there was no need for panic.

“The garlic market is cyclical. Price rises are short-term and they will fall again before long,” Yi told Reuters.

(Reporting by Simon Rabinovitch and Christina Hu; Editing by Chris Lewis)

Heavy snow in China’s wheat belt in the north is conducive for the winter crop, particularly to help ease dry weather earlier, but it has delayed corn transport out of the areas, worsening already tight supplies in the south.

As much as 55 cm of snow fell this week in China’s provinces of Henan, the country’s largest wheat area, as well as in Hebei and Shandong, the China Meteorological Administration said.

Experts said the snow was beneficial to the wheat crop in China, the world’s largest wheat producer and consumer.

“The snowfall is more conducive for wheat, it brings moisture to the soil. Earlier, some wheat areas have had dry weather,” Zhao Guangcai, a researcher with Chinese Academy of Agricultural Sciences, told Reuters.

But he said some young wheat leaves suffered minor freeze damage.

Another researcher with the Henan Academy of Agricultural Sciences said the snow helped kill insects and save water for farmers.

Feed mills in China’s consuming south, however, could face tigher corn supplies because the snow in the north has prevented farmers from selling their new harvest and delayed rail transport.

“Corn supplies are quite tight these days; there are some delays in transport,” said one official with the New Hope Group in the southwest province of Sichuan. The company was also looking for more imports from neighbouring countries [ID:nPEK205454].

The China National Grain and Oils Information Center said the bad weather also could reduce supplies for markets in Guangdong. Tight supplies have driven up China’s physical corn prices <0#ASCORN-CN> even at harvest time.

China and ASEAN countries inked “Nanning Consensus” on stepping up agricultural exchange and cooperation at a summit forum held on Monday in Nanning, capital city of Guangxi Zhuang Autonomous Region.

“Agriculture is a major field for strategic cooperation among China and the ASEAN members, which is an important part of the construction of the China-ASEAN Free Trade Area (FTA)”, said Qin Ruixiang, deputy director of the Standing Committee of the People’s Congress of Guangxi.

The parties identified seven areas as the priorities for exchange and cooperation, including agro-industry and food security, new crop varieties and animal breeds, agricultural sciences and technology, biomass energy, agricultural processing and logistics, animal husbandry and fishery.

They also vowed to optimize the allocation of resources such as labors and funds, expand cooperation on technology and personnel training and intensify agricultural investment in ASEAN.

The summit forum was held ahead of the 6th China-ASEAN Expo in Nanning to be held from Oct. 20 to 24.

An agricultural exhibition of 600 booths would be held for the first time at the expo, which aimed at expanding opportunities for agricultural cooperation among China and the ASEAN countries, Qin said.

China and the ASEAN countries launched the early-harvest program in 2004, which set to scrap tariffs on about 600 agricultural imports in both sides by 2006. The program was part of the FTA framework agreement signed by China and the ASEAN countries in 2002.

Xu Ningning, Secretary General of China-ASEAN Board of Commerce (China) said the program had boosted agricultural production in the region and accelerated trade of agricultural products.

Data from the China’s Ministry of Agriculture showed China’s agricultural exports to ASEAN hit 4.58 billion U.S. dollars in 2008, up 16 percent from a year ago, and agricultural imports from the ASEAN rose 30.2 percent year on year to 9.24 billion U.S. dollars.

Rasphone Sitaheng, minister of Agriculture and Forestry of Laos, introduces the development of Laos’ agriculture during the China-ASEAN Agricultural Cooperation Summit Forum in Nanning, southwest China’s Guangxi Zhuang Autonomous Region, on Oct. 19, 2009. More than 200 experts and representatives from Asean countries, Russia, the United States and Isreal attend the forum which kicked off here on last Monday.

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.

 In 2009, the domestic cotton production is expected to decline, at 700 million tons, with the gradual improvement in exports of textile production, cotton production and demand gap has been expanded; Meanwhile, cotton prices in general will be higher than the previous year, but a large number of listing a number of new cotton the main producing areas are still downward pressure on prices.

It is understood that this year’s cotton pre-Miao Qing in general is better, but in late August to early September the Yangtze River basin consecutive disastrous weather, some impact on the growth of cotton. Ministry of Agriculture, the latest survey data show, this year’s cotton acreage of about 7592 acres, down about 1,000 mu, a reduction of over 10%.

National Development and Reform Commission Zhang Xiaoqiang, deputy director said, at present, the national cotton crop is growing basically the same as the previous year, if the recent weather conditions are normal, and strengthen the latter part of management, is expected to have a good harvest, the national cotton output is expected to 700 million tons. From the National Bureau of Statistics data show that in 2008, national cotton acreage 8640 acres, down 240 million mu; cotton output of 7.5 million tons, up has decreased by 12 million tons.

Prices, Zhang Xiaoqiang said that from the look throughout the year, due to cut production of cotton, cotton production and demand gap in the expansion of cotton farmers a higher price expectations, cotton prices in general are expected to be higher than the previous year. However, after the listing of large concentrations of new cotton, the domestic market, cotton prices are still downward pressure, especially in the higher concentration of Xinjiang’s cotton market, downward pressure on cotton prices higher.

Zhang Xiaoqiang said that the next step, the National Development and Reform Commission will further strengthen macro-control and maintain the basic stability of cotton prices and the market running smoothly. On the one hand, do a good job of cotton reserves control plans. If a large number of new cotton market fell over when the cotton price, timely manner through open bidding part of the cotton purchasing and storage. Such as market cotton prices rose too quickly, then throw in time savings, stable cotton prices to ensure the needs of textile and cotton.

At the meeting, reporters learned at the same time, from next year, the government will intensify efforts to promote small packet of cotton and its processing enterprises out of the market. From September 2010, the railway authorities to stop packets of cotton transport, the Agricultural Development Bank to stop providing loans to small packets of cotton processing enterprises, cancel cotton packet processing of cotton processing enterprises eligible.

The average bidding price stood at 1,534 yuan ($224.6) per tonne, a slight increase from last week’s 1,525 yuan per tonne.

Auctions will continue in the neighbouring provinces of Jilin, Inner Mongolia and Liaoning, closing at 14:37 p.m. (0837 GMT).

China started its destocking efforts on July 21, offering 2 million tonnes of corn and 500,000 tonnes of soybean from its state reserves each week.

This week’s state soybean reserve auction will take place on Wednesday, after the first two rounds failed to attract any bids.

 However, the situation is turning around in the second half of 2009 with higher milk prices and less excess dairy products.The latest statistics show that from January to April this year, the large-scale dairy enterprises of China produced 5,864,300 tons of dairy products, an increase of 2.67 percent.

The State Council released a new plan for China’s ailing milk industry on November 19. lastt year. Although the guidelines include provisions for financial support from the government, it also contains a fair measure of candid criticism.The Chinese government is encouraging dairy farmers to expand their businesses with subsidies. The Chinese dairy industry is expected to see a real turning point in September.After the melamine scandal, the Chinese government has taken a series of measures to regulate and standardize Chinese dairy industry to ensure that the dairy source quality is safe for processing, and that manufacturing is stringently checked for quality.

With efforts of the government and all  the people who are in dairy industry,We belive the chinese dairy must turn around.

The total import and export volume rose 4.9 percent to 6.85 million tonnes, worth 16.02 billion U.S. dollars, up 10.7 percent from a year earlier.

Influenced by the United States import ban on four Chinese aquatic products in 2007, fearing it contained carcinogen and other harmful substances, and “dumpling poisoning” case in Japan in early 2008, China’s aquatic products export faced difficulties for some time.

According to The Ministry of Agriculture, by the end of 2010, the output of aquatic product will reach 60 million tons with an average annual growth rate of 3.3%; the output Value of fishery industry will reach CNY 570 billion with an average annual growth rate of 6.4%.

China is one of the world’s biggest consumers of soybeans for its huge pig and livestock industry. It has become a heavy buyer of U.S. soybeans after the crop in Argentina, the No. 3 world producer, was battered by drought. Sales of old crop US soybeans to China have supported prices in the US in the face of falling crude oil futures which have been a big driver of late, and it has reduced carryover stocks to 110 million bushels, the lowest in over three decades. China has also been a big consumer of last season’s canola, doubling the average amount that they normally take from Canada.