CURRENT DEVELOPMENTS IN CHINESEE COMMUNIST AGRICULTURE

Created: 8/1/1968

OCR scan of the original document, errors are possible

Intelligence Memorandum

Current Developments in Chinese Communist Agriculture

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CENTRAL INTELLIGENCE AGENCY Directorate of Intelligence8

INTELLIGENCE :iEMORANDUM

Current Developments in Chinese Communist Agriculture

Summary

Current developments in Communist China'sstrongly indicate that8 grain harvest will be lessperhaps substantiallyhan the excellent crop Floods in widespread areas of southern and central China are worsening the prospects for the harvest of early rice and are delaying the sowing and cultivation of autumn grains.

The Cultural Revolution is continuing to erode the authority and morale of rural cadres and tothe supply of chemical fertilizers, insecticides, irrigation pumps, and other inputs to agriculture. The cumulative impact of the Revolution is yet to be felt on the agricultural procurement and distribution system because the7 crop relaxed the pressure on the system.

Contracts for the delivery of grain thus far8 are running about IS percent below the level Purchases for future delivery are surprisingly light in view of the favorable market price for wheat and the anticipated decline in grain outputhe regime may be awaiting the final outcome of the midyear harvest and the early indications of fall harvest prospects before negotiating additional contracts.

Mete: This memorandum vas produced solely by CIA. Ii was prepared by the Office of Economic Research.

Although shortages of subsidiary foodseterioration in the quality of the grain ration are apparent irn widespread urbanasicstandards have held up. Tho loss of discipline in rural areas is permitting peasants to increase private cultivation and marketing in spite of the regime's orders against the extension of private activity. Thus additional supplies of subsidiary foods in many local areas may be partially offsetting the reduction in the availability"of major grains.

Heavy Rainfall and Flooding

Exceptionally heavy rainfall and flooding over much of Central and South China is dimming the prospects for the early grain harvest." The damaging rainfall began during the lastays of May.in this period was more than 3S0 percent of normal over small areas along the Kwangtung coast. Damage was apparently confined to the western portion of the Canton Delta. Refugees from Kai-ping, En-p'ing, and Nan-hai hsiens in Kwangtung reported serious crop lossesor example, "the great flood in our area destroyed grain crops as thay wore budding and the crop failure will be serious."

A second period of exceptionally heavyoccurred during the lastays of June. As shown on the map, rainfall activity was intenseroad area of South and Central China. was moreercent of normal during the secondays of Juneercent of normal during the lastays of the month. The rivers draining the area swelled rapidly, flooding the adjacent low-lying fields and threatening the dikes downstream. Conditions wore especially serious on the Hsiang Chiang and Kan Rivers flowing north and emptying into the Yangtze River and on the Kwei, Hsi, Tung, and Han Rivers flowing southward into Kwangtung Province.

Accurate meteorological data are not available for July, but data from the official press and other sources confirm the occurrence of serious flooding all through the month. The Huai-pei Plain in Anhwei and Kiangsu provinceswhich hadercentercent of normal

in the lastays of Juneas added to the areas

1 The early grain harvest constats, in roughly equal portions, of winter grains (winter wheat, barley, beans, peas, and sweet potatoes) and early riae.

suffering from flood. Editorialsndulyhat "the suddenness of the flood is unparalleled'in recenthat "some areas were disasternd that "all possible ways and means to insure the safety of the north Huai main dike" were being used.

of hilly terrain in Kwangtung,crops has been largely from flash floods; only

in the Swatow area are there important losses in the early rice crop. ombination of hilly terrain and apparently successful emergency work on the dikes is preventing extensive damage in the Yangtze area. In contrast, the Huai-pei area is poorly drained farmland that is prone to flooding and waterlogging. Here the main damage is to the planting and cultivation of corn, kaoliang, millet, and soybeans to be harvested in the fall. Damage to other fall-harvested cropsntermediate and late rice, tubers, and miscellaneouse determined at this time.

Adverse Effects of the Cultural Revolution

crop prospects are furtherthe unfavorable effects of the Culturalagriculture. These problems were admittedChou En-lai8 speechhe stated that "this spring inadequatewere made for sowing, which mustpushed. This year, the situation withto water conservation and fertilizer isthat of last year, and additional stimulation

is required." In spite of Chou's warning, disruptions in farm operations and reductions in the supply of new machinery, chemical fertilizer, and pesticides continue. These difficulties will compound the effects of unfavorable weather on8 harvests.

Farming Operations

to disruptions affectingin China are much more numerous Editorials and reports confirm thatprovinces farming activities such aswork, manure collection, and fieldare behind schedule because of peasant and

COMMUNIST CHINA Areas of Heavy Rainfall and Flooding,8

cadre apathy. ecent editorial from Canton states:

ome plans have slackened later-stage field management of early rice,for the summer harvest have not been made well enough, and upsurges in thefor late-season farming have not yet been started. Insufficient manure has been collected, the speed of sowing is comparatively slow, and plans for late-season planting have not yet been translated into concrete measures at the production team level.

unrest and administrativeare still slowing up waterprojects that require large numbers ofdiscipline, and peasant cooperation. Theuncertain as to where they standshowing little initiative, and are stillin the press for "holding back."

Fertilizer and Insecticides

The Cultural Revolution continues to hamper the supply of chemical fertilizer to China'ssector. Domestic production remainsbelow potential, and delays in theand use of fertilizer are common. Fertilizer imports8 are scheduled toillion tons, an increaseillion tons However, because of delays in concludingthe bulk of these imports will not reach the farms in time to aid8 crops. Shortages of insecticides continue: ypical report, from Kiangsu Province in mid-July, spoke of insufficient insecticides tolague of cotton leaf worms.

The regime is repeating its advice to peasants to use self-reliance in meeting these shortages. An editorial from Kwangtung Province in mid-June urged that peasants "grasp firmly the collection of manure, utterly eliminate the idaa of relying on chemical fertilizer, go in for native and miscellaneous manuresig way." numerous reports from individual farmers

continue to blame fertilizer shortages for decreases in crop yields.

Grain Procurement and Food Supplies

disruptive effects of the Culturalon grain procurement and food distributionmajor factor contributing to the subsidiaryand the deterioration in the qualitywhich are occurring in many urban areas. are normally tight during the latespring period prior to the first harvest of In past years, major cities usuallytreatment, inniform flowgrain"wheat and ricewasthe ration remained stable. This year,grain rations have been reduced in manyand the less popular coarseaoliang, and sweet potatoeshave For example, corn flour has beenfor rice and wheat in rations in Pekingand wheat flour has replaced rice inin Shanghai, Fuchow, and Amoy. Shortagesfoods such as pork, poultry, andalso been reported in many urban and ruralnutritional standards, however, appear to

have been maintained.

The regime's concern over continueddifficulties is reflected in editorials during June and July. For1 June broadcast from Kiangsu Province referred to class enemies and their plots to "disrupt the procurement andof summer grain." Similar editorials have also appeared recently in Shantung, Chekiang, and Heilungkiang provinces.

A poor fall harvest combined with further impairment of administrative controls over grain procurement and distribution could cause severe dislocations in food supplies throughout the country. If this were to happen, the Chinese population during the cocning winter and spring would face further deterioration in the quality of the diet and possibly debilitating reductions in the quantity of food available. The regime could be expected to meetituation by increasing imports of Freo World grain.

Grain Imports

13. The'regime seems relatively unconcerned at the moment over its agricultural prospects. thus far for the.delivery of grain in8illion tons, oronsthe level7 (see the table) .

Communist China: Retained Imports of Grain7 and Contracts for Deliveryy Country of Origin

Thousand Tons

Country of Origin

6 3

a. Preliminary.

Rumors of negotiations with France for the purchase of anillion tons of grain have yet to be confirmed. Further, there are no indications of current Chinese negotiations with any of the other major grain exporters.

14. The present lack of Chinese interest in grain importsin spiteavorable world wheat supplymay be attributed to one or both of the following reasons: (a) The regime may beinal assessment of the early grain harvest and firmer indications of the outcome of the fall harvest, which accounts for approximatelyercent of the total.grain harvest; preliminary assessments of the fall harvest will not be available to the authorities until early September. (b) The

regime's estimates of import requirements may have been obscured by the administrative confusion generated by the Cultural Revolution. In any case, unless tho regime chooses to cut rations in urban areas, grain import requirements probably will be larger during the winter and springhan.

Private Activity

During the Cultural Revolution the official press has been castigating local officials whobourgeois attitude" in favor of private plots and private markets. This propaganda, however, isdirected against the extension of private activity, and officials have been told not towith existing private plots or private holdings of livestock.

Nonetheless, private activity in tha Chinese countryside has been increasing since the Cultural Revolution intensified in The crippling of Party and government organizations at the county level and above, together with the apathy of cadres at lower levels, has loosened the controls over the peasants. Fewer hours are being applied to collective land and to large-scale irrigation and reclamation projects. This, together with illegal diversion of chemical fertilizer, manure, and other inputs to the private plots, almost certainly is leading toincreases in the output of subsidiary foods. The increased availability of these foodstuffs will partially offset local shortages of grain.

Black market activity in rice and other foodstuffs is also increasing. This activity, coupledpercent rise in the official off-ration price of rice, suggests that the regimo is having difficulty in procuring normal quantities of staple foods. Grain normally procured and placed on the off-ration market by theis being retained in the countryside and is becoming available through black market channels.

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