The Development of Grain Markets in “Big Agricultural Provinces”

• In Event: China’s Provincial Economy: Diversification, Institution and Development

Abstract

“Big Agricultural Provinces”, namely Jilin and Heilongjiang, have become increasingly important as suppliers of both stable food for people and feed for livestock in China. Total grain production of the two provinces rose to 95.5 million tons in 2013, accounting for 15% of the national production. Although there had been constant policy supports from the central and local governments to foster the grain markets in “Big Agricultural Provinces”, it was not until 2006 that grain markets in Jilin and Heilongjiang were able to absorb all of the locally produced grains for the first time after the 1990s. This paper aims to reveal the developing mechanism of the grain markets in Jilin and Heilongjiang after the 1990s by focusing analysis on the corn market and the dry bean market. This paper examines changes in agricultural polices, production, domestic marketing channels and international trade. Three conclusions can be made from the analysis: 1) Efficiency of the grain markets in “Big Agricultural Provinces” have been improved by local traders activities, and this contributed greatly to the recent increase of China’s grain production; 2) policies to foster grain markets are effective only when both peasants and local traders are benefited from grain trade; 3) the growth of grain markets in “Big Agricultural Provinces” contributed to the growth of local grain processing industry and livestock industry. It also brought structural changes in related industries in coastal provinces and changes in China’s international grain trade.

Author

• Xinyuan Zhang, The University of Tokyo