China: Price Freeze Could Hurt Farmers
22 January 2008 While urban Chinese consumers are pleased about the government’s decision to freeze prices on certain household commodities, farmers feel their interests are being ignored and that their ability to farm viably will be hurt by the decision, according to an article on XinhuaNet.
The government moved to restrict price hikes of daily goods such as grain, edible oil, meat, milk, eggs, and liquefied petroleum gas in an effort to bring rising inflation under control. However, the article quotes Dongting Lake area rice farmer Xu Shaohua as pleading that measures need to be taken to satisfy the country’s rural population.
“Prices of pesticides and chemical fertilizers have continued to soar, but the price of rice has not undergone big hikes in recent years,” Xu said. “Rice in 2007 only fetched 80 yuan or so per 50 kg on the market, I don’t have much left after labor costs are deducted. It is simply unrealistic to rely on plowing the fields and becoming prosperous.”
Like many rural families in China, Xu Shaohua and his wife, take care of their grandson, who helps farm their land, the article explains. Their son and daughter-in-law have left to work in the city, and with the cost of tripling in the past three years along with price increases in inputs such as fertilizers, the family’s costs of production are soaring — but a freeze on prices would prevent their profit from rising accordingly.
Chen Wensheng, deputy head of the New Countryside Research Center with Hunan Provincial Academy of Social Sciences, said in the article that the government should leave the price of goods to market forces. “Rises in farm produce reflect the law of the market, which will in turn help compensate farmers,” Chen said. “Without question, it is a key challenge for the Chinese government to balance inflation curbs and steady price increases of produce for the good of farmers.”
To help alleviate the situation, the central government has pledged to enhance rural infrastructure construction, promote stable development of agriculture, and facilitate a sustained income growth for farmers in 2008.
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