Facing a rising population, the central government plans to boost China’s annual grain output to more than 550 million tons by 2020, an increase of 50 million tons over 2007.

By contrast, the cultivable land in the country sharply decreased from 130.04 million hectares in 1996 to 121.72 million hectares in 2008 due to rapid urbanization and natural disasters, figures from the National Bureau of Statistics show.

Also, the current per capita cultivated farmland is about 0.092 hectares, which is only about 40 percent of the global average. Less than 4.7 million hectares in the country can be considered reserve farmland, Zhang told the legislature.

The country had its sixth consecutive grain harvest in 2009, with grain output rising 0.4 percent year-on-year to a record high of 530.8 million tons, the official figures showed.

“The increase of the grain output in recent years is mainly due to enlarging the planted areas, as the government encouraged farmers to produce grain by offering subsidies since 2004,” said Lu Bu, a researcher with the institute of agriculture resources and regional planning at the Chinese Academy of Agricultural Sciences.

“But these grain output increases cannot be continued since China does not have much additional farmland to be cultivated in the future,” he said.

More improvements should be made in other aspects, such as advancing planting techniques and increasing high-yield fields, he said.

Currently, China’s wheat yield is 4.61 tons per hectare compared with the world average of 2.76 tons. Per hectare rice and corn yields are 6.38 tons and 5.28 tons respectively, compared with the global average of 3.38 tons and 3.41 tons.

Although the country now is comfortably ahead of the global average in grain output, the potential demand is still overwhelming, Lu said.

Zhang also said in the report that so far, only 33 percent of the total planted areas in China are high-yield fields. That percentage needs to increase, he said.

Water-saving agriculture should also be encouraged, Lu said. Less than 20 percent of the country’s water resources are focused on large areas of farmland north of the Huaihe River, which account for two-thirds of the country’s total cultivable areas.

Several supporting policies to guarantee the country’s food safety will be implemented, according to the report from the National Development and Reform Commission.

“As more natural disasters hit the country, food security is becoming a top concern among the public, which forces the government to offer more concrete favorable policies,” said Zhang Hulin, a professor with the Party School of the Communist Party of China Central Committee.

Yuan, director of the National Hybrid Rice Engineering Technology Research Center and a faculty member of the Chinese Academy of Engineering, made the remarks at the World Expo’s third theme forum, which opened on Sunday in Wuxi, in east China’s Jiangsu Province.

The new hybrid, the phase-III super hybrid rice, was expected to yield 13.5 tonnes of rice per hectare, Yuan said.

The previous hybrid, the second-generation super hybrid, was released for commercial production in 2006, yielding 9 tonnes of rice per hectare, on average

Rice is a major food crop that feeds more than half of the world’s population, Yuan said.

China is now planting 440 million mu (29 million hectares) of rice per year, with an average output capacity of 6.3 tonnes per hectare.

Among the acreage, hybrid rice accounts for about 57 percent of the total, with an average output capacity of 7.2 tonnes per hectare.

“The average yield of hybrid rice is at least 20 percent more than that of inbred rice, feeding 70 million more people annually,” Yuan said.

China is faced with a challenging grain situation this summer because of strong rainfalls in the south during the summer harvest season. Other problems include droughts in northern grain production areas and lingering low temperatures in the south.

According to the Ministry of Agriculture, China needs to maintain an annual grain output of 500 million tonnes to feed the nation’s 1.3 billion people.

China’s summer grain output rose six years in a row to top 123.35 million tonnes in 2009, which was 2.6 million tonnes more than the previous year.

“Hybrid rice will play a key role in ensuring food security worldwide in the new century,” Yuan said.

“If 50 percent of the world’s rice paddies were planted with hybrids, rice production could be increased by another 150 million tonnes, and 400 to 500 million more people could be fed,” he said.

Yuan believes food security is “a war people can not afford to lose” .

“The global economic downturn will always end, but food security is the problem we have to face every second,” Yuan said.

Statistics from the United Nations showed about 1 billion people were suffering from hunger and malnutrition and every six seconds saw a child dying of hunger or related diseases.

With the theme “science & technology innovation and urban future”, the two-day forum focuses on innovations in science and technology.

The previous two theme forums of the World Expo centered on communications and cultural heritages.

Yuan started working on hybrid rice in 1964.

“I often drive my car to go to rice paddies to do research,” said the 80-year-old, “The only difference is that when I was young, I rode a bicycle or motorcycle ….you could attribute it to improving life.”

Hybrid rice has also been commercialized in other countries, including India, Vietnam, the Philippines, Bangladesh and the United States.

“For the benefits of the world’ s people, we are well prepared to help other countries develop hybrid rice,” he said.

China had raised minimum purchase prices for wheat and rice again in 2009, by 13 to 17 percent, to add income for farmers, said Nie at a national meeting in Beijing.

The measure of minimum purchase prices increased peasants’ income by about 40 billion yuan ($5.86 billion) last year, he said.

Administration figures showed State-run grain enterprises bought 163.2 million tons of grain last year.

The Administration has been promoting reforms among State-run grain enterprises and reported 18,163 State-run grain enterprises by the end of 2009, down 65 percent from 1998.

Soybeans and corn edged higher after losses in the previous session on prospects of better harvest weather next week.

“We have seen the dollar claw back some ground and that is in conjunction with a negative turn in macroeconomic sentiment,” said Toby Hassall, an analyst with Commodity Warrants Australia.

“We had such a significant move in wheat last week, really there wasn’t a huge degree of fundamentals behind that rally in terms of global demand and supply.”

Wheat surged last week to a four-month high, propelled by fund buying and rains that delayed sowing of the US winter wheat crop. Corn and soybean also rallied as wet weather slowed the harvest of this year’s big crops.

But forecasts of favourable weather and a strengthening dollar knocked down the grain markets on Monday, with corn dropping 5 per cent, wheat losing 3.8 per cent and soybeans 1.9 per cent.

The US Agriculture Department said that soybean harvest was 44 per cent complete as of October 25, well below the five-year average for late October of 80 per cent. Corn harvest was 20 per cent complete compared with the five-year average of 58 per cent.

Traders had been expecting the USDA report to show that soybean harvest was 50 to 55 per cent complete and corn harvest was 20 to 25 per cent complete.

“If we do start to see a favourable outlook for harvest than that harvest delay risk premium is going to be wiped out,” said Hassall.

This week’s broad-based commodities market rally on the back of the tumbling dollar, which lifted prices for corn, soybeans and wheat to multiweek highs, has largely offset the weak dollar’s benefits, traders and analysts said.

“The prices have gone up precipitously here in a short amount of time and that has actually cut our exports back,” said Don Roose, analyst with U.S. Commodities.

“The weaker dollar has not compensated for the run-up that we’ve had,” he said.

U.S. corn futures on the Chicago Board of Trade rose to a 3-1/2 month high this week, soybeans hit a six-week high and U.S. wheat reached a 10-week peak as the U.S. dollar fell to a 14-month low against a basket of major currencies.

A weak dollar is traditionally viewed as a catalyst for exports of dollar-denominated commodities like corn, soybeans and wheat because it increases the buying power of those holding other currencies.

Wheat is a particularly currency-sensitive commodity because the grain is exported by far more countries than corn and soybeans.

But U.S. wheat export sales projections have declined in tandem with the sinking dollar due to ample global supplies of cheaper wheat and comparatively higher U.S. shipping costs to key markets.

Egypt, one of the world’s top wheat importers, bought 180,000 tonnes of French wheat this week, passing on U.S. offers which were $18 to $20 a tonne more expensive.

The U.S. Department of Agriculture cut its projection for 2009/10 marketing year U.S. wheat exports this month to 900 million bushels, down 50 million bushels from its previous month estimate. Some traders said the export outlook could slip further despite the dollar’s weakness.

“The futures market is trading the dollar prematurely rather than waiting to see if we actually get demand from a weaker dollar. The market has kind of made up for the currency move almost one-for-one,” said a U.S. wheat trader.

Source: Reuters

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.

The rise was the result of increased acreage for wheat and rapeseed, said the bureau.

Pork output in the first half of the year grew 8.1 percent to 23.63 million tonnes, said the bureau. Beijing’s subsidy programme for breeding sows have encouraged farmers to increase the numbers of the livestock.