The Chinese government recently announced that it would increase investment in its agricultural sector, ramping up farm loans and farm subsidies in order to increase domestic food production and modernize its agricultural infrastructure. China has long been one of the major importers of American agricultural products. With over 1 billion citizens, China accounts for roughly 1/5 of the world’s population, but only 9 percent of its arable land. By increasing access to farm loans and farm subsidies, the Chinese government hopes to reduce their nation’s dependence on foreign food sources.
In an ambitious blueprint for agricultural reform, the Chinese State Council laid out a series of farm goals the country hopes to achieve over the next several years. By increasing access to farm loans and government support, the State Council hopes to improve land yield, resource efficiency, labor productivity, and technical innovation. Achieving these goals could help prevent a future national security crisis and increase the economic stability of the Chinese state.
Vital farm loans and government grants would go towards increasing corn and soybean production in particular. While China is largely self-sufficient in wheat production, it relies heavily on soybean and corn imports. This lack of food supply has helped increase consumer inflation. Farm loans and grants to large-scale agricultural producers could help stimulate domestic production. In addition, the State Council laid out a goal of promoting the use of modernized agricultural practices, revising guidelines on seed cultivation, and pressuring major banks to free up capital for farm loans and agricultural investment.
In addition to these traditional changes, the Chinese government hopes to encourage significant technological innovation through direct government investment. Chinese officials called for scientific research into seed production and the development of disaster resistant plants. The government is also considering expanding access to farm loans for farmers who participate in these scientific endeavors. Finally, according to documents issued by the Central Committee of the Communist Party of China, the government has committed to across the board increases in agricultural funding, including increasing direct investment and expanding access to farm loans.