Farmers Reluctant to Sell Crops despite Record High Purchasing Price

Farmers in China's major crop producing provinces are now said to be reluctant to sell out their yields, despite the government moves recently to increase its minimum purchase prices. As our Wang Jing tells us, many farmers are betting on further price increases as the north China drought continues.

The Ministry of Agriculture has now raised the minimum purchasing price of rice this year by as much as 20 percent compared to last year, as the drought plagues large areas of farmland.

Zhang Changyuan, who farms in one of China's major rice production bases in Hunan province, says the increase in purchasing prices is being easily offset by the cost hikes he has had to incur during planting.

"The price of seeds, pesticides, and fertilizer are all soaring. So the cost of planting has increased by over 60 yuan for one mu, which is about 660 square meters."

Meanwhile, the purchasing price of wheat now stands at a record high of 2.3 yuan per kilo.

But Zhang Detian from Shandong says he could still earn more by doing odd jobs in the cities, rather than growing wheat.

"This year is not a good year for crops, I'm gonna lose money by growing wheat."

China's wheat growing areas are now facing their worst drought in 6 decades.

Official data shows about 40 percent of the winter wheat planted in eight major growing provinces is being affected by drought, with 6 percent of the crops facing "severe drought."

Shi Haiou, a manager of a wheat processing plant in Shandong, says the stocks in his plant are only enough for seven days of operating, which is 40 percent less than in previous years.

"In previous years, farmers who sell us their crops have already shown up before the Lantern festival. But this year, I've seen very few. Because the drought has lasted for such a long time, farmers are betting on a higher purchasing price and they will simply stockpile their yields for a while. I'm really worried."

The latest Consumer Product Index figures now show that crop prices in January have gone up 15 percent compared to December.

For CRI, I'm Wang Jing.