Last year saw an adverse balance of USD 5.5 billion in the trade of agricultural produces. How to look at the trade deficit in the Chinese agricultural produces? And how can the Chinese agricultural produces come to cope with the daily serious international competition? With these questions in mind the reporter held an interview with the person concerned from the Ministry of Agriculture.

Why the trade deficit of the agricultural products

There are many reasons causing high trade deficit but the changed situation in the supply and demand at home is the decisive factor.

In view of the customs statistics, the higher trade deficit in agricultural produces finds its main cause in the following categories of grain, cotton and sugar as industrial materials and animal and fowl products. The occurrence of trade deficit in these three major agricultural produces has different reasons.

In 2003, the grain output dropped to the lowest level in recent a few years and a series of measures were taken to stimulate the grain production in 2004. In the meanwhile the quota for the export of agricultural produces was reduced in the agricultural produce trade while encouraging measures were also taken to stimulate the import of agricultural produce. In addition, there occurred domestically a recovery price increase for major agricultural produces in 2004 with the increasing rate to reach some 30 - 40 percent, while the government and enterprises had a large amount of grain import of their own accord. This has incurred an extraordinary scale in the increase of grain import in 2004 and it is a very important factor in causing the huge trade deficit in agricultural produce.

The global quota for textile garment products was fully cancelled at the beginning of 2005. The domestic textile enterprises all took it a favorable opportunity for increasing their export and increased one after another their cotton reserve. Though last year saw a rich harvest in cotton production in China yet the supply still fell short of the demand in domestic market, therefore, a very big increase in cotton import.

With regard to the trade deficit in animal and fowl products this was closely related with the disastrous influence of the explosive bird-flu at the beginning of 2004.

Expert pointed out, the occurrence of the trade deficit in agricultural produce had many reasons but the changed situation in the supply and demand in domestic market was the decisive factor.

How to strengthen competitiveness of agricultural produce in international market

Don't be afraid of the import increase of agricultural produce and the problem lies in arranging well the ratio of import and export with the comparative superiority brought to the greatest extent.

The person concerned from the Ministry of Agriculture said, though last year saw the first occurrence of international trade deficit in China's agricultural produce yet the entry of over three years into the WTO hasn't exerted so prominent an actual impact on China's agriculture as expected before due to relatively forcible measures taken in the problem handling and some favorable changes in international environment.

The future development of the Chinese agriculture will be landed in an environment in which the international market is opened wider with every passing day. It is a necessary tendency to see a double increase in the import and export of agricultural produce. The person concerned from the Ministry of Agriculture stressed: Don't be afraid of the import increase of agricultural produce and the problem lies in arranging well the ratio of import and export with the comparative superiority brought to the greatest extent as so to reinforce the international competitiveness of China's agricultural produce.

First and foremost, we must be good at using well and enough the "Green Box" and "Yellow Box" policies of the WTO and further strengthen the protection and support of the agriculture after entering into the late transitional period of the WTO.

According to the rules of the WTO the subsidy for agriculture in its broad sense is defined as the "Green Box" policy. This, for instance, includes the service in general for agricultural production provided with the public funds or government financial expenditure, fees of payment for reserves in order to guarantee the food supply and the subsidy for natural calamities and so on. And the "Yellow Box" measures refer to the direct price interference and subsidy by the government for agricultural produce. The amount of the "Yellow Box" subsidy as committed by the Chinese government is 8.5 percent of the total value of the agricultural production. However, according to the introduction given by Chen Xiwen, Deputy director-general of the leading group of the central finance at the press conference the other day, though the Chinese government has given Chinese farmers some subsidies there is still a very big gap as in between against the rate the Chinese government has ultimately committed.

The next is that we have to develop with great efforts the export-orientated agriculture at present. It is necessary to step up the construction of the production belt for superior agricultural produces with great efforts made to develop those epitomizing the superiority in the export and also for the replacement of the import. It's necessary to push ahead the standardization in agriculture and establish a criterion and a system for healthy and quality agricultural produce and for the examination and checkup as well so as to enhance the safety level of the quality of agricultural produce.

And for another we have to strengthen strategic reinforcement for the agriculture to "go out from the country", to give play to our technical superiority in exploiting the agricultural resources from the outside world to carry along the export of the domestic agricultural produce and agro-technological products. In the meantime, efforts must be strengthened in the service of the sales promotion of agricultural produce in the world. That is by way of holding exhibitions, fairs and promotions to help the export of superior agricultural produce, especially with the stress laid on actively pushing ahead the export of the labor-intensified produces, such as vegetables, fruit and flowers and so on and so forth.

By People's Daily Online