China will end its state corn stockpiling program this year, replacing it with other subsidies, amid surging reserves in the world’s second-biggest grower, the official Xinhua News Agency reported.
The government will encourage state and private firms to buy corn at market prices and offer credit support to farmers, Xinhua reported late Monday, citing a press briefing by the National Development and Reform Commission. It will also promote changes in crop cultivation and move to reduce existing stockpiles, the news agency said. The changes will affect the 2016-17 season.
China said in January it was assessing changes to its corn purchasing and reserve program to make it more market based. The government began subsidizing output in 2008, acquiring grain at above-market prices to protect farm incomes. That increased domestic production by more than 35 percent and China now grows and consumes more than any nation except the U.S.
“Farmers are wondering what they should plant for this spring, how much they would be subsidized and whether the subsidies are able to cover the losses from falling corn prices,” said Yan Zhang, an analyst at Shanghai JC Intelligence Co. (Bloomberg)