BEIJING, Sept 5 (Reuters) – China’s top grain province is offering farmers subsidies of 150 yuan ($22.46) per mu (0.067 hectares) to rotate corn with soybeans, as it seeks to cut corn output amid huge oversupply.
The move, part of a major overhaul of Beijing’s grain policy, is expected to significantly boost planting of soybeans next year, although it is unlikely to dent imports by the world’s top soy buyer.
Under its previous policy, Beijing bought corn at inflated prices for temporary stockpiles, encouraging farmers to grow more and more of the grain, and abandon soybeans. It left China with huge reserves of corn and encouraged a surge in imports of cheaper corn substitutes.
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The government is now attempting to reverse that trend by offering financial support for those who plant soybeans following a corn crop.
According to a document published by the Heilongjiang government, the province will trial the “rotation subsidy” for three to five years, including in the northern, colder part of the province as well as other areas that traditionally planted soybeans.
In total, about 6.5 million mu (433,000 hectares) of former corn area is expected to benefit from the subsidy, said the China National Grains and Oils Center, an official think-tank, on Monday.
That is only 15.7 percent of Heilongjiang’s total soy acreage, estimated by the think-tank at 41.3 million mu.
But with a much lower corn price, and a separate subsidy for soybean growers of 4,800 yuan a tonne, soybean acreage is likely to significantly increase next year, it said in a daily report, without offering a figure.
China is targetting a 37 percent rise in soybean planting by 2020, from 2014 levels of 102 million mu, said the National Development and Reform Commission last week.
Output will reach 18.9 million tonnes, up from 12.5 million tonnes this year. But that is still well below the country’s needs, with imports next year likely to hit 86 million tonnes.
Rising demand for a protein-rich diet in China has triggered a six-fold jump in imports of soybeans since 2001. The beans are crushed to make soymeal, an animal feed ingredient, and cooking oil.
There is also growing demand for the oilseed in food products.
($1 = 6.6786 Chinese yuan renminbi)
