Low Returns from Wheat Production

By CnAgri2012-10-19 10:50:19 Print

According to the State Development Commission, the yield/cost ratio of wheat production was 16.56% in 2011. Taking into account of the government’s subsidy of RMB1,275/hectare, farmers’ yield/cost ratio was 28.49%.

Due to fertilizer price increase, the yield/cost ratio of wheat production is 11.59% in 2012. Taking into account of the government’s subsidy of RMB1,466/hectare, farmers’ yield/cost ratio is 24.38%.

Calculating at the fertilizer and labor cost in 2012 and the government’s protective wheat procurement price of RMB224/100kg for Grade Three wheat in 2013, the yield/cost ratio of wheat production is 12.58% in 2013. Taking into the government’s subsidy of RMB1,686/MT, farmers’ yield/cost ratio is 26%. But if farm material price runs high, the ratio may drop next year, hampering farmers’ initiatives.

From “China Grains Market Weekly Report”