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China 5-Year Plan

Reading the "CHINA TO INCREASE CORN ACREAGE IN 2021 - MINISTER" article reminds me of reading about the Soviet's 5-Year Plans, which were always a good laugh to read. "We're going to increase output of all these things by changing almost nothing."  In this case, China will solve all their food security problems with "better seeds".

"Farmers planted 41.264 million hectares of corn in 2020, with output of the grain at 260.67 million tonnes, according to the National Bureau of Statistics."  That's a 103 bu/ac national average, if my math is right. And my understanding is that corn is $7 - $8 now over there. I'm glad they're not capitalists or that would be a huge incentive to ramp up production. But command economies rarely respond correctly to price signals.

10 Replies
Honored Advisor

Re: China 5-Year Plan

Liberals and communists believe that if you say something no matter how ridiculous and repeat it often enough it becomes the truth.

Senior Advisor

Re: Before you get to feeling too overconfident...

I'm no fan of the Chinese Communist Party but before you get to feeling too overconfident about China's lack of ability to grow corn keep in mind that 1) the Chinese are well aware of the limits of central planning, 2) they already managed to overproduce in the recent past, 3) government subsidies have worked pretty well here in the US for forty years or more.

Honored Advisor

Re: Before you get to feeling too overconfident...

I cannot find a year in recent memory when they could produce anything close to their own needs.  Number 2 is a lie, they have never been able to over produce.  Government subsidies have not worked in the US....... Only profit motive works in the US.... for instance compare wheat subsidies and acres the last 40 years.  Number 3 is suspect.  Subsidies have most normally been a result of restricting production.

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Honored Advisor

Re: Before you get to feeling too overconfident...

How many 5 year plans have there been in China and the USSR?   Im sure we will need to form a "5 year plan" soon...

Senior Advisor

Re: Before you get to feeling too overconfident...

Seems  simple  enough   -  just study the  model after our  65  year,   of  S. Korean occupation  - theory - maybe ?  Perfect example of  fixing something  - ?   OR,  Mission accomplished  ,2003 ,  I've heard on another front, of  long  term  planning - maybe  - ?     

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Honored Advisor

Re: China 5-Year Plan

I don`t understand much of how agriculture in China operates, but they pay farmers $10 for corn and $17 for beans.  If that kind of money was thrown to BTOs around here, grain would be on the streets of Woden, as well as the streets of Wesley, Corwith and Luverne. 

I do know about communism though and the Chinese farmers do not have the FREEDOM to spend their money, which is a worse disincentive to produce than the low prices that we experience 8 years out of ten.  Until that supposedly "wise" 5,000 yr culture figures that out, they are destined to always be behind the food security tail.

One problem they have (and that I share personally) is the lack of skills to store quality grain long term.  Maybe through importing and dangling $10 carrots in front of Chinese farmers to produce gets you a big pile of grain, but if you turn it into a pile of manure in a couple years, what good did it do you?   Seems to me they`d do themselves a favor by getting Sukup bins and dryers over there to keep their grain in condition.

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Senior Advisor

Re: China 5-Year Plan

Luckily,  Russia  &  China  have  these  problems , or where would our markets be - ? 

Does China have federal crop insurance producer subsidy's  ?     

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Senior Contributor

Re: China 5-Year Plan

Well BA you'd think that, but after $1000 rent would we really be able to produce that much?

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Honored Advisor

Re: China 5-Year Plan

Lets restart this discussion with the accurate description of a Chinese farmer and stop assuming the model works anything close to a corn belt farmer who gets to pass "his Owned acres" to his children.

If china paid $40 for a bushel of soybeans, show me the breakdown of who actually recieves the division of that $40.  And what the rental rate is for the farmer to farm the political parties land....???   And maybe this is the beginning of a conversation we need to face in the US!