ECONOMIC SPOTLIGHT - CHINA MUST PRESERVE FARMLAND

  "If we go on using up
  farmland as we have done since 1980, there will be none left in
  20 years to grow grain on."
      Xu Jinfeng, a middle-aged official in Fengbang village on
  the edge of Shanghai, sums up the dilemma China faces as it
  tries to feed its more than one billion people and at the same
  time let them get richer by building factories and new homes.
      China has to feed one quarter of the world's population,
  but only one seventh of its land is arable.
      Sharp increases in farm output since 1979 turned China into
  a net grain exporter for the first time in 1985, and again in
  1986.
      But the rapid industrialisation of the countryside which
  has occurred at the same time, has gobbled up arable land for
  factories and homes for peasants who can now afford them.
      Official figures show that China lost just under one pct of
  its arable land to other uses in 1985 and a slightly smaller
  amount last year. It gained 26 mln new mouths to feed during
  the two years.
      "We lost very little land prior to 1980 when the
  industrialisation began," official Xu said. "Since then, nearly
  all the families in the county have built new homes and many
  factories have gone up."
      "Last year we lost land to a new railway line," Xu said. But
  land losses in future should fall because nearly all families
  already have new houses, she added.
      The issue of land loss is a matter of major concern to the
  Peking leadership, which announced earlier this month that
  China will issue nationwide quotas for conversion of grain land
  for the first time this year.
      "The present situation of abusing, occupying unlawfully,
  wasting and destroying land and land resources is serious," said
  an article in the official press explaining the new measures.
      "It has resulted in great losses of cultivated farmland," it
  said. "China has a large population and its land resources are
  badly deficient."
      An official of the Shanghai city government said county
  authorities could approve conversion of only 0.3 hectares of
  arable land to other uses, while anything more than that must
  be approved by the city government.
     The Peking government faces another major obstacle in its
  efforts to ensure China's people get enough grain to eat. The
  prices the state pays to farmers for grain are too low, making
  it more profitable for them to grow other crops.
      To offset this, the state offers farmers cheap fertiliser
  and diesel oil and payment in advance for grain it contracts to
  buy. The state then sells the grain at subsidised prices to
  China's 200 mln city residents. Rural factories also subsidise
  grain output, paying farmers bonuses to grow it.
      Some officials argue that the simplest solution to the
  problem would be for the state to raise city grain prices.
      Chen Zuyuan, Communist Party secretary of a village in the
  eastern province of Zhejiang, said the government listened too
  much to the demands of "selfish city people" and could raise city
  grain prices without any problem.
      But the government has ruled out a price rise. "Raising the
  price of grain would directly conflict with the goal of social
  stability," said a China Daily editorial this month.
      The Shanghai official said prices must be reformed over the
  long term. "We must be very careful. We have a very large
  population which is used to price stability and will object to
  price rises," he said. "The problem is how to do it."
      The Shanghai official said a rise in grain prices might
  also affect the prices of hundreds of food products made with
  grain and consumed by city residents.
      In addition, the state faces the problem of inadequate
  investment by farmers in land and in grain in particular.
      The official press has reported that farmers fear farm
  policy may change and they are putting their new wealth into
  building graves, memorial halls for ancestors and homes.
      Under reforms introduced in the late 1970s, farmers sign
  contracts with the state requiring them to grow certain crops,
  but they have considerable freedom in how to use their land.
      "As the expiration date of the 15-year contract is almost at
  the halfway mark, farmers are beginning to worry about the
  future," the China Daily said in an editorial last month.
      Their anxieties stem from the fact that they are allowed to
  use the land but not own it. For most of the period of
  Communist rule, the land was organised into collectives where
  there was little room for individual initiative.
      "New measures are needed to reassure them of the consistency
  of government policies and make them interested in long-term
  investment," the newspaper said.
  

