China aims to cut corn planting in parts of farming belt by a third

China aims to reduce corn planting in parts of its farming belts by around a third over five years, representing an area larger than Belgium, and switch to crops such as soybeans or potatoes after ending policies to support corn prices.

China intended to boost domestic soybean production for human consumption, but the world’s top soy buyer would still need to import for feed, said one agriculture ministry official.

Corn acreage will be reduced in areas covering 13 provinces and regions extending from the frozen far northeast, the parched northwest and the desertified southwest by about 8.2 million acres by 2020, the ministry said.

Around 1.6 million acres of cornfields in these regions deemed unsuitable for corn growing would be reduced this year alone, while the acreage in core growing areas would be stabilized, it said.

The pledge comes after China late last month said that it would abolish its corn stockpile system to free up prices. The policy set domestic price 30-50 percent above the global market, leading to record imports of corn substitutes like sorghum and huge stockpiles of corn.

“The reduction is because we have encountered periodic surpluses of corn and reserves have increased by a huge margin,” Ye Zhenqin, an agriculture ministry spokesman, told a news conference.

In 2015, China harvested a record 224.6 million tonnes of corn on 94.2 million acres of land. Corn has been the country’s largest grain crop since 2011, according to the National Bureau of Statistics.

Beijing’s corn stockpile policy since 2008 had spurred farmers to shift to corn, even in non-traditional growing areas, leading to huge surpluses, with state warehouses said to hold as much as 250 million tonnes, the equivalent of more than a year of consumption.

Soybean Production

Farmers in arid areas would be encouraged to shift to silage corn and alfalfa, while parts of the northeastern cornbelt provinces would resume the rotation of corn with soybeans in bid to make agriculture more sustainable, the ministry said.

China plans to allocate 3.5 billion yuan (US$541 million) to encourage farmers to shift to crops such as silage corn and alfalfa, meeting demand from the dairy industry, as well as potatoes, soybeans and other crops, Pan Wenbo, deputy director at the ministry’s planting department, told reporters.

Pan said China was aiming primarily to boost domestic production of soybeans for human consumption and would try to resume domestic production after years of falling output.

“We will try to stabilize domestic soybean production and aim to meet domestic demand for food use. We are not seeking self-sufficiency in soybeans, nor seeking to resist imports,” he said.

Domestic soy supply restraints could only be resolved by importing to meet demand for animal feed and edible oil, said Pan.

China, the world’s biggest soybean buyer, imported a record 81.7 million tonnes of soybeans in 2015, accounting for 70 percent of global trade. Domestic output stood at 12 million tonnes, down from a peak of 17.4 million tonnes in 2004.

Pan said the ministry planned to try to resume domestic soy production, which is largely used to make tofu, soy sauce and soymilk.

With ample grain supplies, China has said that it would no longer pursue increases in harvests in next five years, potentially ending 12 consecutive years of increased production.