On the Beijing market, local people are glad to find scallions and mushrooms cheaper than before, while insiders who know the reason for the price cut are growing increasingly edgy.
The Japanese government has decided to impose temporary emergency import curbs Monday on three farm products, including scallions mainly from China. Owing to the curbs, local agricultural products can’t be sold in Japan, a main market for Shandong farmers.
The ordinance will impose higher rates of duty on imports of scallions, mushrooms and rushes used in making tatami mats whenever their import quantity surpasses the average import amount logged between 1997 and 1999.
The curbs came after Japanese domestic producers claimed that the rapid import increase of such farm products, mainly from China, have undercut their prices, making it scarcely lucrative to continue turning out such products.
China’s vegetables, which are relatively cheaper than their Japanese counterparts owing to lower labor costs, are popular in Japan and thus enjoy a rising export volume. Yet, as the country gradually involves itself in economic globalization, there are demands for a system to be established to efficiently reduce and handle the risks to protect farmers’ interest.
One demand is that Shandong, a large agricultural province, should have an efficient system for providing market information for local farmers, which can analyze the importing countries’ political and economic trends and issue timely warnings to local agricultural departments and farmers to reduce risks and adjust the agricultural mix.
Unfortunately, local farmers had been encouraged to expand their scallion cultivation when Shandong knew of the possible Japanese import curbs. Market risks were seldom a consideration. Due to the ordinance, local farmers had to sell their products on the glutted home market at lower prices with part of their harvest blocked at Japanese ports.
Chinese farmers will incur great losses even if both countries reach a compromise in the future because of the short vegetable preservation period. Although this is partly because of the Japanese ordinance, it shows the export-oriented agricultural market of China is a monoculture. When a market crisis breaks out, there is no other means to reduce the losses.
China will soon engage in free international trade of agricultural products, which means its agriculture will be subject to global changes in prices, market accessibility, trade structure and trade rules. The country will also have to fulfill the obligations to which it has committed itself during the 13-year negotiations for WTO membership.
Yet till now, many Chinese people are still unclear about the impact of the WTO membership. Many farmers in rural areas are less informed of the fast changing market due to lack of access to this information, let alone getting prepared for WTO entry. Many strategies and management methods, which we consider current, may become unpractical. China has a long way to go to find a niche in economic globalization.
(www.h5a3.com 04/23/2001)
