Price freezes squeeze Chinese farmers

While most Chinese consumers, particularly in urban areas, are relieved at the government’s decision to freeze prices on key household commodities, some of the country’s farmers argue their interests might be ignored.

The Chinese government moved this month to restrict price hikes of daily necessities, such as grain, edible oil, meat, milk, eggs and liquefied petroleum gas, in an effort to bring rising inflation under control.
“Major enterprises are required to submit the price-raising scheme

to the government for official approval 10 working days before they intend to raise the prices,” said the National Development and Reform Commission (NDRC) in a circular on January 16. The government will reject a scheme if it deems price rises are ungrounded or too high.

Xu Shaohua, a rice farmer from the Dongting Lake area, a key grain production base in central Hunan province, hopes that additional measures will be taken to satisfy people who live in the countryside.

“Prices of pesticides and chemical fertilizers have continued to soar, but the price of rice has not undergone big hikes in recent years,” Xu said. “Rice in 2007 only fetched 80 yuan (US$11)or so per 50 kilograms on the market. I don’t have much left after labor costs are deducted. It is simply unrealistic to rely on plowing the fields and becoming prosperous.”

Asia Times