Soybean Planting Acreage Is Unlikely to Growing Significantly due to Uncertain Policy

By CnAgri2017-04-01 10:28:57 Print

March is the plowing season in the northeast. In the past, the purchase of seeds, fertilizer and other agricultural materials had reached half at the end of March but it only recorded 20% this year mainly because the farmers were uncertain about what to grow and were inactive in plowing and planting after the policy adjustments.

On the one hand, with the support of the temporary storage corn purchase policy, corn planting acreage grew rapidly in recent years which also boosted the land rent (the rent rose to 6,000 RMB/ha in 2016); after the purchase price was lowered and canceled, plus the national policy of reducing corn planting, corn prices dropped sharply which led to a profit decline in growing corn, corn planting profits were very uncertain.

On the other hand, although the state intended to adjust the policy of the soybean target price, it only released a market-oriented acquisition and subsidy mechanism, meanwhile, the central government will subsidize the soybean producers but the details were undecided; soybean planting is unlikely to profit without subsidies so the farmers were inactive in planting soybeans.

Although the government strongly supports soybean planting, most farmers choose to grow corn or coarse cereals due to the undecided policy details, soybean acreage is unlikely to grow significantly. After a sharp decline of corn price, the land rent dropped sharply in the northeast ( 2,000 - 3,000 RMB/ha) which can offset the canceled policy subsidy; but the soybean price is difficult to rise from the low level in the short run due to the pressure from imported soybeans, soybean planting profits are not as good as corn planting.