State Council summarizes the rural economy in Q1 of 2022

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Dr. Aihemaitijiang Rouzi | Advisor Agricultural Sustainability (DCZ) | 24 May 2022

On 20 April 2022, the Chinese State Council in cooperation with the Ministry of Agriculture and Rural Affairs (MARA) held a press conference to summarize the agricultural sector of China in the first quarter of 2022. Zeng Yande, Chief of the Development and Planning Division at MARA, laid out the main summary of Q1 as follows:

1. Overall spring plantation and related farming activities have been carried out well. Zeng insisted that MARA will be working hard to reach its annual grain targets. Due to the weather events in last autumn and winter, the winter wheat harvest will face some challenges, whereas projections for the overall summer harvest are more optimistic. Currently, the winter wheat germination rate has reached 87.9 percent, down 3.7 percent from last year. The spring plantation area is anticipated to reach 62.7 million hectares, an increase compared to the previous year. 20 percent of the grain area, 70 percent of the early rice area, and 70 percent of the rice area in the Northeast have already been planted, also marking an increase over the previous years. Zeng also noted that soybean and oil seeds planting, a key task emphasized in this year’s No. 1 Policy Document, had been made the responsibility of provinces and counties.

2. China’s urban food security policy known as the “vegetable basket” program saw further improvements, Zeng stated, ensuring stable supply of non-grain foods, particularly fresh produce and meat. Pork production returned to normal levels with 41.85 million fertile sows, 102.1 percent of the normal target. Pork output stood at 15.61 million tons, marking a 14 percent increase year-on-year. Beef, mutton, and poultry output increased by 0.3 percent, milk output by 8.3 percent, and aquatic products by 2.5 percent. The area planted to vegetables increased by 200,000 hectares, with overall vegetable supply being stable. The overall pass rate of food products undergoing food safety inspection stood at 97.5 percent. Green and organic products as well as products with geographical indications reached 62,000.

3. Achievements from China’s poverty eradication campaign further consolidated. Key measures included improving employment, cultivating local products, providing investments in rural infrastructure, as well as supplying timely small loans to poverty-stricken communities. By the end of March, localities in 28 provinces offered 19.1 billion yuan of small loans, supporting 435,000 rural enterprises. 27.73 million migrant workers from poor areas have been able to secure jobs outside their rural communities, accounting for 91.85 percent of the annual employment goal.

4. Rural industrial development is on track, and the food processing industry is in good condition. The national purchasing managers’ index (PMI) in the agri-food industry stood at 50.3 percent, 0.8 percent above China’s manufacturing PMI. Online retail sales of agri-food products increased around 10 percent. By the end of March, the employment rate of returned rural residents exceeded 80 percent. This year, 50 new national modern agricultural industrial parks and 200 agri-industry focused villages were established.

5. The rural living environment and rural services were improved, while rural land reform around contracted and residential land saw progress. By the end of March, there were 3.8 million family farms, larger-scale agricultural operations run by rural households, and 2.22 million farming cooperatives in rural China. Rural social services organizations reached 965,000 and covered 38.3 percent of small holder farms. National fixed asset investment in agriculture in Q1 reached 252.2 billion yuan, an increased of 6.8 percent compared to the previous year.

6. Farmer’s income continued to increase. The annual rural resident income in Q1 stood at 5,778 yuan, a y-o-y increase of 6.3 percent after inflation and 2.1 percent higher than urban income growth during the same period. Migrant workers from rural areas and smaller cities reached 178 million, increasing by 2.2 percent y-o-y, and averaging a monthly income of 4,436 yuan.

MARA’s overall optimistic assessment, Zeng admitted, is overshadowed by continued COVID-19 woes, cutting into farmers’ incomes, as well as global market upheavals that have been driving up the costs for agricultural inputs. While fixed asset investment into the rural economy has continued to increase, its growth rate has slowed down over the last months. With the Chinese economy facing headwinds, experts and policymakers will be closely monitoring the impacts on China’s agri-food sector.

Source: State Council Information Office

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