CHINA SECTOR REPORT: AGRICULTURE - SOUTHWEST CHINA

Update: June 30, 2003

Introduction

Agriculture and agribusiness are mainstays of SW China’s economy; agriculture is the predominant economic activity for the majority of the inhabitants of the poor, mountainous areas. In the last 20 years, agricultural reforms introduced by the central government have (in common with the rest of China) had a profound effect on this sector in SW China. The demand for agricultural produce has stimulated production in both rural and urban areas; and there is increasing emphasis on modern agricultural methods and better quality produce.
Major problems remain, however. A high proportion of the land is non-productive, and there is relatively little flat arable land. The area also has a fragile eco-system to contend with.

Main produces affected by WTO

Crop: A lot amount of crops can not be exported because the content of pesticide remains which exceed requests of International Standard. The price advantage of local crop will be decreased, and imported crop will share more and more crop market. In 2002, both import and export values of rice trade were decreased, but the exports of corn and wheat are increased a lot.
Vegetable oil: After the tariff is decreased and the quota is cancelled, the price of oil will be higher than imported vegetable oil.
Meat: Meat export business will develop well. But most meat processing companies need to improve their quality, processing tech and sanitation facilities to international standard.
Fluid: It is beneficial to export fluid and import new species as well as advanced cultivation and prevention techniques.

Sichuan

Sichuan province covers an area of 485,000 sq. km, the 5th largest of the nation. Its population is 86.075 million, the 3rd most populous province of China, of which 68.425 million is rural and only 26.31c million people engage in cultivation, fishing and husbandry.
Sichuan has 65.192 million mu (1 mu=0.0667 hectares) of arable land, 5% of the nation’s arable land. Amount which 31.448 million mu are dry fields, others are water fields. Besides, it has 348.47 mn mu of forestland including 175.85 mn mu grass land as well as fish cultivation area of 3.525 mn mu. The forest coverage rate of the province had reached 24.23% by the end of 2001.

Sichuan lies four different landforms of plain (7%), hills (10.06%), mountains (49.44%) and plateau (32.08%). The East Sichuan is “Sichuan Basin”, covering about 40% of the province and having subtropical humid climate (average temperature of 16.5 °C, average rainfall 1,150 mm, annual sunlight of 1000-1400 hours). As early as 3000 years ago, agriculture in this region was comparatively advanced, earning the province the reputation as “Abundant Land of Heaven”. The Southwest Sichuan distributes hills and mountain. Four seasons in this region are not so distinguished because of warm winter, cool summer and longer annual sunlight of 2200-2700 hours. The Northwest Sichuan distributes maintains, gorges and plateau. This region is colder (average temperature is 4-12 °C) with less rainfall (annual average rainfall of 500-900 mm) and more sunlight (1600-2600 hours).
Sichuan is endowed by nature with favourable conditions and advantages for agricultural development and agro-industrialization. As a major agricultural province, its production of major agricultural products and by-products such as grain, edible oils, vegetables and meat (pork), etc, rank in front nation-wide (see table 1), and its modern agriculture is in the upswing.
Sichuan has made recent progress in rationalising its industrial structure. The weight of primary industry in total GDP was reduced from 44.5% in 1978 to 21.1% in 2002. In recent years, the annual growth rate in agricultural production value has been over 5%. During the past twenty years, Sichuan has successfully used international co-operation to develop its agricultural sector, using both bilateral and multilateral funding.
To implement its sustainable development strategy, Sichuan has been carrying out a series of projects related to natural forest protection, restoration of forest and pasture from cultivation on slope land, comprehensive treatment of ecological environment harnessing and water pollution control. It aims to construct the ecological shelter along the upper reach of Yangtze River. In 2002, 542 hectares arable land were reforested and the provincial forest rate reached 26.62%.

Major development fields

1. Cultivation: Construct a number of cultivation bases for quality produces such as grain, rape, fluids, tea, vegetable, cartoon, flower, silkworm, etc; Construct markets for gathering and distributing agriculture products; Set up agriculture quality standard system, quality test centres, as well as agriculture information system.
2. Husbandry: To enforce anti-epidemic shelter by carrying out forcible immunity measures. Construct a number of No-Disease Husbandry Zones. Use international standards to organise the production, processing and transport.

Potential for International Co-operation

· Rice processing: Present shortage in rice processing is high smashing rate. Advanced equipment could be required.
· Potato processing: Currently more than 10 % of potato are sold directly on the market without processing. Sichuan Hejia Ltd. (in Chengdu) is planning to set up FTY to produce 3000 tons potato powder and 2000 tons crisp per year. Interested in investment or processing equipment.
· Fruit and vegetable processing: Sichuan is a major producer of high-quality fruit and vegetables; but currently lacks advanced processing capacity.
· Meal processing: Still lacks of deep processing capacity. In 2001, 600,000 tons of pork was sold to other provinces without deep processing.
· Dairy production and processing: Currently, dairy production and processing levels are relatively underdeveloped, and the annual per capita average consumption of fresh milk is very low, only 7 kg. The authorities are actively promoting foreign investment in dairy production and processing.
· Development of Traditional Chinese Medicinal Herbs: Sichuan is one the most important production bases of Chinese medicinal herbs, but processing and marketing capacity are very low.
· Advanced agriculture technology and management.

Chongqing

Around 80% of Chongqing’s population (24.38million) lives in the rural area; and poverty alleviation in the agricultural eastern part of the municipality is a major policy objective. Chongqing enjoys a sub-tropical monsoon climate, which helps promote the municipality as a rich agricultural area. Chongqing is an important production base for grain, silk cocoons and citrus fruits; animal husbandry is also important. Agriculture contributes around 16.0% to GDP in 2002. A number of reforestation projects are underway, based on sustainable forestry and the introduction of cash crops to alleviate poverty.
Potential International Co-operation
1. Construction of Ecological and Economic Projects in the Three Gorges Reservoir Area
The completion of the Three Gorges Project will mean a major loss of arable land. As a result, there will be a major shortage of arable land around Chongqing City. The municipality is keen to promote projects in the Three Gorges Area to boost agricultural productivity. The key sectors include forestry and grassland protection and grassland animal husbandry.
2. Production, Testing and Management Technology for Eco-friendly Agriculture
Mainly aims to improve the quality and safety of produces.

· Pig raising, especially in breeding and anti-virus technology
· Meat processing technology and equipment.
· Orange cultivation and processing
· Virus-free potato (new breeding)

Yunnan

Known as the ‘Kingdom of Flora’, Yunnan boasts the biggest variety of plants in China. Almost all the species of plants that grow in tropical, subtropical, temperate and alpine zones can be found in Yunnan.
Although Yunnan’s moderate climate is a boost to agriculture, most of Yunnan (84%) is mountainous; and only 7% of land are devoted to arable agriculture. Most of this comes from subsistence agriculture. Nonetheless agriculture contributes a large amount to Yunnan’s economy (21.08% of GDP in 2002). According its10th five-year-plan, Ynnan will invest RMB4.27 bn in its agriculture by developing high quality grain (rice and potato), pollutant-free vegetable, organic tea, natural herb, flowers, high quality feed and grassland. Yunnan is the largest base in China for planting and manufacturing of lower tar tobacco and cigarettes.
In 2003, Yunan will focus on developing various cultivation bases for tobacco, flower, vegetable, fruit and potato.
Potential for International Co-operation
1. Research and development of seeds and nursery plants for agriculture and cash crops;
2. Application and promotion of genetic engineering of crops;
3. Comprehensive development of non-irrigated farming, biological farming and farming in tropical areas;
4. New technology for the prevention of pests and diseases in crops and forest;
5. Planting and processing of rubber;
6. Pollutant-free foods, tonic foods and health-care foods, traditional foods and drinks from local ethnic groups;
7. Research and development of pollutant-free feeds;
8. Quick breeding and utilisation of rare and endangered animal and plant species for protection; establishment of nursery gardens for rare tree species;
9. Afforestation for industrial materials and other purposes;
10. Planting and processing of fine quality tea and coffee.

The World Potato Congress, Kuming, China

Meeting Dates: March or April 2004 (to be advised)
Venue: Kunming Trading Centre, Kunming, China

For more details, please contact:
The Secretariat of WPC 2003
Tel: 0086 871 4141008 5516240
Fax: 0086 871 4141356
E-mail: wpc2003@public.km.yn.cn
Websites:www.china-potato.com/wpc2003kunming.htm
www.potatocongress.org

Guizhou

Guizhou is a poor, land-locked province isolated from mainstream economic activity and traditionally ranks close to last among China’s provinces in terms of economic development. Much of the land is limestone, resulting in poor soil conditions. Less than 20% of the province is cultivated, most of it intensive farming on terraced fields in the hilly terrain.
Agriculture is nonetheless a predominant industry in the province. The primary industry contributed 23.77% to total GDP in 2002; and over 85% of the population work in the primary sector (11% higher than the national average).
Guizhou has diverse agriculture: almost 6,000 varieties of agricultural crops and 39 local animal and poultry breeds. Main products include rice, wheat, potato, corn, rape, fruit, tobacco and tea. Tobacco is the largest revenue source. Cattle raising is a relatively new venture in 1990s. Since 2001, Guizhou province has invested RMB 1 bn to develop beef raising and support dairy industry. Guizhou also produces over 40 high-quality teas. Forest covers 30% of the land.

Contacts:

Sichuan Provincial Department of Agriculture
Mr. Xiao Xianggui, Vice director of International Cooperation Division
Tel: 0086 28 85571375
Fax: 0086 28 85570282

Chongqing Municipal Agriculture Bureau
Mr. Liu Baoguo, Director of International Cooperation Division
Tel: 0086 23 69016161, 69016162
Fax: 0086 23 69016163

Agriculture Bureau of Yunnan Province
Foreign Affair Office
Tel: 86871 4142250
Fax: 86871 4142008

The Secretariat of WPC 2003
Tel: 0086 871 4141008 5516240
Fax: 0086 871 4141356
E-mail: wpc2003@public.km.yn.cn
Web: www.china-potato.com/wpc2003kunming.htm

Agriculture Department of Guizhou Province
Mr. Zhu Zhengfeng, Director of Foreign Trade Section
Tel: 0086 851 5822031
Fax: 0086 851

Prepared By:
Joan Zhou
Commercial Officer
British Consulate General
Chongqing
Tel: +8623 63810321
Fax: +8623 63810322
Email: Joan.Zhou@fco.gov.uk