Required Report - public distribution

**Date:** 11/30/2007

**GAIN Report Number:** CH7091

CH7091

**China, Peoples Republic of**

**Planting Seeds**

**Annual**

**2007**

**Approved by:**

![](media/image1.wmf)William Westman

AgBeijing

**Prepared by:**

Jorge Sanchez and Wu Xinping

**Report Highlights:**

In MY07/08, China\'s planting seed supply for its main crops, including
grain, oilseeds (soybeans, rapeseed and peanut) and cotton is expected
to be sufficient with high surplus of hybrid corn and rice varieties.
Imports of seeds for vegetables, turf grass, fruit/melon, and sunflower
are expected to continue growing in MY07/08. Domestic seed marketing
continues to be fragmented albeit the on-going reform and
consolidations. The restrictive policy on seed trade, gentically
engineered (GE) seeds, and foreign investment in the seed industry
remains in place.

Includes PSD Changes: No

Includes Trade Matrix: Yes

Annual Report

Beijing \[CH1\]

\[CH\]

Table of Contents

[**Executive Summary 3**](#executive-summary)

[Production 3](#production)

[General situation 3](#general-situation)

[Seed production and supply expected to be stable for MY07/08
3](#seed-production-and-supply-expected-to-be-stable-for-my0708)

[Seed industry reform and consolidation continues
5](#seed-industry-reform-and-consolidation-continues)

[Agricultural Planted Area and Yields
6](#agricultural-planted-area-and-yields)

[Trade 7](#trade)

[Seed imports are expected to increase in MY07/08
7](#seed-imports-are-expected-to-increase-in-my0708)

[Demand for turf seeds and nursery seedlings remains strong
7](#demand-for-turf-seeds-and-nursery-seedlings-remains-strong)

[Seed exports are expected to rise in MY07/08
8](#seed-exports-are-expected-to-rise-in-my0708)

[Marketing Entry and Promotion 9](#marketing-entry-and-promotion)

[Policy Issues 9](#policy-issues)

[No new amendments to China's Seed Law
9](#no-new-amendments-to-chinas-seed-law)

[Agricultural commodity import regulations remain in place
10](#agricultural-commodity-import-regulations-remain-in-place)

[Planting seed phytosanitary and licensing restrictions
10](#planting-seed-phytosanitary-and-licensing-restrictions)

[Seed tariffs and the value added tax (VAT)
11](#seed-tariffs-and-the-value-added-tax-vat)

[Plant variety protection (PVP) background and development
11](#plant-variety-protection-pvp-background-and-development)

[Intellectual property rights (IPR) issues for planting seed enterprises
12](#intellectual-property-rights-ipr-issues-for-planting-seed-enterprises)

[Biotechnology and planting seeds 13](#biotechnology-and-planting-seeds)

[Trade Tables 14](#trade-tables)

[Table 1 China\'s Imports from the World in Volume & Value
14](#table-1-chinas-imports-from-the-world-in-volume-value)

[Table 2 China\'s Imports from the U.S. in Volume & Value
15](#table-2-chinas-imports-from-the-u.s.-in-volume-value)

[Table 3 China's Major Seed Imports and Major Countries of Origins
16](#table-3-chinas-major-seed-imports-and-major-countries-of-origins)

[Table 4 China\'s Exports to the World in Volume & Value
18](#table-4-chinas-exports-to-the-world-in-volume-value)

[Table 5 China\'s Exports to the U.S. in Volume and Value
19](#table-5-chinas-exports-to-the-u.s.-in-volume-and-value)

[Table 6 China's Major Seed Exports and Major Countries of Origins
20](#table-6-chinas-major-seed-exports-and-major-countries-of-origins)

# Executive Summary

China's planting seed supply for its main crops, including grain,
oilseeds (soybeans, rapeseed and peanut), and cotton in MY07/08 is
expected to be sufficient with high surplus for hybrid corn and rice
varieties. Imports of seeds for vegetables, turf grass, fruit/melon and
sunflower are expected to continue growing in MY07/08. The constant
increase in the turf grass imports is mainly driven by beautification
programs in urban areas. Increasing imports of sunflower seed (for oil)
indicate a diversified vegetable oil demand, while strong imports of
vegetable, and fruit/melon seeds reflect increased domestic demand and
strong export-oriented seed production. Exports of vegetable and hybrid
rice seeds are also anticipated to increase in MY07/08. Domestic seed
marketing continues to be fragmented notwithstanding ongoing
consolidation in the most sectors of the seeds industry. It appears that
the awareness for protection of new plant varieties was enhanced in the
past two years, the enforcement of relevant laws and regulations,
however, continues to be challenging to the relevant government
agencies. Restrictive policies on seed trade, GOM seeds and foreign
investment in the seed industry remain in place.

# 

# Production

## 

## General situation

China continues to be one of the world's largest seed producer:
self-sufficient in planting seeds for its main crops, including grain,
major oilseeds, and cotton. This trend is likely to continue throughout
MY07/08 and well after. Although official seed production statistics are
not available, industry sources estimate annual seed use at 12.5 MMT
with total seed sales for MY06/07 grossing over \$2.9 billion.
Additionally, an official media source reported that, the total annual
commercial seed production is estimated at more than 8.5 MMT,
seed-processing capacity is estimated at 6.5 MMT of which more than 1.9
MMT were treated seeds. China is home to 815 advanced seed processing
lines in operation. With a total of 56 state-level seed warehouses, the
seed storage capacity stands at 4.3 MMT.

Seed self-sufficiency rates for rice, corn, wheat and soybeans are 100
percent, with cotton seeds at 85 percent (the rest are likely met by
joint ventures in China) and vegetable and fruit/melon seeds at 95
percent. The traditional practice of farmer-saved seeds for major crops
is declining. According to China's Ministry of Agriculture (MOA), in
MY06/07, high quality seed varieties covered 95 percent of the market,
and accounted for more than 36 percent of China's total agriculture
production growth. China's low labor cost enables it to produce hybrid
seeds for overseas markets at lower costs compared to other countries.
In fact, China's seed exports for July 2006 to June 2007 marketing year
(MY06/07) increased by 18 percent in value over MY05/06, with vegetable,
rice and fruit/melon seed and hybrid rice leading the pack. Seed imports
for MY06/07 also hit a record high of \$122 million in value, up by 15
percent over the previous year. The import varieties mainly include
vegetable, turf and forage and sunflower seeds.

## Seed production and supply expected to be stable for MY07/08 

Maintaining a stable supply of high quality seeds for major grain crops
is a stated priority for China's relevant agencies. According to MOA,
seed production for all major crops in MY06/07 met domestic demands with
surplus for corn. Additionally, high quality seed varieties coverage
exceeded 96 percent of the planted area. The latest MOA information
showed that corn and rice seeds production for MY07/08 are expected to
exceed demand due to better yields and overall improvements in quality
as compared to the previous year. In an effort to improve seed
production, in 2007, two more hybrid rice bases were constructed in
Sichuan Province and two new hybrid corn bases were built in Gansu
Province, respectively, with financial support of \$2.5 million from
MOA. Another 14 conventional grain seed producing bases in major grain
provinces were constructed with MOA support of \$1.25 million per base.

MOA conducts a quality sample survey for grain crop seeds each year. The
results from the latest survey conducted in December of 2006 showed that
seeds that met the national quality standard were 93 percent for hybrid
corn and 100 percent for hybrid rice. This is a remarkable improvement
compared to 86 and 95 percent, respectively for the previous year. Most
notably, the "purity" and "germination percentage attributes" improved
significantly. The survey collected 247 corn samples from 146 seed
companies and 144 hybrid rice samples from 87 seed companies nationwide.
Based on the survey results, however, one seed enterprise had its
business license revoked because the seed quality could not meet the
standards in the last two consecutive years, and three other enterprises
were warned and are currently under strict supervision due to failure to
provide samplings.

Rice\--Rice seed supply for MY07/08 is expected to reach 320,000 MT with
surplus estimated at 80,000 to 100,000 MT. The excessive supply is
attributable to good harvest as well as high carry-in stocks in MY06/07.
Prices are expected to remain stable. According to MOA, the 2007
breeding area for hybrid rice is 80,000 hectares (Ha), down from the
100,000 Ha in the previous years. Total production is estimated at over
220,000 MT, despite flood and drought conditions in some of the
producing provinces. Hybrid rice seed breeding is conducted mainly in
Hainan, Hunan, and Sichuan provinces. According to China's Ministry of
Science and Technology (MOST), hybrid rice's planted area for 2007 is
estimated at 1.6MHa, slightly expanded from the previous year and
accounting for 55 percent of China's total rice area, as compared to the
51 percent in 2006.

Corn---Hybrid corn seed supply for MY07/08 is forecast to be 1.7MMT,
outweighing the domestic demand with an estimated surplus of 600,000 MT.
Prices are expected to be unaffected. According to MOA, the 2007 hybrid
corn seed area is estimated at 230,000 Ha with production at 1MMT.
Together with the 700,000 MT of carry-in stocks, total supply will
likely reach 1.7 MMT during MY07/08. Higher production reflects
increasing competition in the corn seed sector. Despite the surplus, MOA
officials maintain that the market situation will remain stable because
the leading seed companies' sales will likely increase due to strong
demand for major varieties. Hybrid corn varieties dominate seed corn
use. China's largest hybrid corn-breeding facility is located in Gansu
Province, accounting for more than half of China's total production.

Wheat\--The majority of wheat seeds are conventional varieties, most of
which are produced in China's northern provinces. Industry sources
reported that the high quality and specialized wheat varieties continued
increasing, accounting for 61 percent of the planted area in 2007.

Cotton -- Cotton seed breeding is increasingly industrialized and
commercialized. Based on survey results of the China Cotton Research
Institute, 68 percent of cotton farmers purchased seeds in 2006, up 5
percent over the previous year. Planted varieties increased to 456 in
2006, however, of which only 53 varieties' area coverage reached 0.5
percent or above with the highest at merely 6 percent. Although the
number of new varieties surged, yields did not increase. In 2007, the
planted area for biotech (BT) varieties is estimated at more than 3.6
MHa, out of the total 5.5 MHa of planted area. In the Yellow River
region, BT varieties coverage reached 100 percent. Some industry sources
estimate that the market share for domestic BT cotton varieties for 2006
continued to dominate at 75 percent although no official data is
available. Some Chinese sources claim that Chinese-produced BT cotton
varieties are more suitable and tailored to the local environment and
lower in price compared to imported varieties.

Other crops---Production of planting seeds for oilseeds including
soybeans and rapeseed are expected to increase slightly in MY07/08 based
on the decrease of soy bean planted area and available seed stock in
MY06/07. The demand for soybean and rapeseed planting seeds are expected
to increase for MY07/08 because of the relatively higher profit received
by farmers in 2007. Several conventional "high oil content" soybean
varieties are being planted in China's four northeastern provinces. The
"double low" (low erucic acid and glucosinolate content) rapeseed
varieties account for over 70 percent of the planted area. In September
2006, the Oilseeds Research Institute of China's Academy of Agricultural
Science (CAAS) reported that it had developed a new rapeseed variety
with about 55 percent oil content. The Institute will be promoting
rapeseed production in South and Central China for biofuel use, although
the use of rapeseed for biofuel appears unlikely in the short term
because of the strong domestic demand for edible vegetable oil.

It is expected that imports of sunflower planting seeds will remain
strong in MY07/08 due to the high demand for better varieties for oils
and snacks. Vegetable and fruit/melon seeds are produced throughout
China, which enables them to be bred and marketed to suit local
preferences and requirements. However, imports of seeds of various
vegetables and fruit/melon are also expected to continue growing to meet
the diversified demands of consumers. Export-oriented vegetable seed
production is concentrated in the eastern China provinces, mainly
Shandong. Seed breeding is being outsourced to China by foreign
companies mainly from Japan, EU and US because of the relatively cheaper
production cost.

## 

## Seed industry reform and consolidation continues

Seed production and marketing continues to be fragmented, but the trend
for restructuring the sector is quickly accelerating. On May 19, 2006,
China's State Council issued GuoFaBan (2006) No. 40 decree on
"Recommendations on Expediting Seed Management Reform and Strengthening
Marketing Supervision". The Decree stipulates that the "Complete
Segregation of all Seed Trading Entities from the Agricultural
Administrative Agencies" should be completed before the end of June
2007, as traditionally most seed trade are entities affiliated with the
agriculture bureaus (more background provided in CH6104). On July 10,
2007, MOA issued Decree NongFa No.7 on "Review and Acceptance Measures
of Seed Trade Entity's Reform" mainly focusing on the "Complete
Segregation." Upon the pubilication of this Decree, MOA's "Review and
Acceptance" teams began touring nationwide. The above mentioned
"Complete Segregation" results are not yet available. Industry sources
indicated that they expected the "Complete Segregation" to facilitate
consolidation of the industry.

The fragmented seed market originates from China's old planned economy,
which created a model of segregated research/development, breeding, and
marketing. Better integration of variety research and development, seed
breeding, and the distribution chain remains a goal for policy makers,
industry associations, and research institutes. Although there has been
some consolidation in the industry in recent years, it may take years
before flagship enterprises replace the thousands of small players.
Industry contacts estimate that the total number of "seed companies" is
declining due to the restructuring of the industry. In November of 2006,
MOA released the second listing of the 50 largest seed-producing
enterprises based on their comprehensive strength and sales value in the
past two years. Industry sources, however, reported that the largest
annual seed sales value among the top-50 seed enterprises is still below
\$ 100 million for MY05/06. One MOA official reported that the market
share of the "50 largest" increased to 30 percent in MY04/05, from 15
percent in MY00/01, hinting to a consolidation trend within the
industry, albeit at a rather slow pace. A few of these companies have
established comprehensive variety development, seed breeding, and
marketing systems. Few, however, have their own research and development
facilities. Some of these companies only engage in seed sales. The
traditional seed breeding and distribution model still prevails.
Developers are mostly state or provincial sponsored agricultural
research institutes and universities, while seed companies are
responsible for breeding and marketing seeds to farmers. It is worth
noting that researchers and developers are increasingly involved in seed
breeding and marketing through established breeding enterprises. Some
new seed companies also have set up independent research facilities,
which enable them to develop their own new varieties and retain
intellectual property rights.

In most cases, breeding enterprises may opt to purchase the new
varieties directly from the developer. According to MOA, several seed
companies purchased new crop varieties from agricultural research
academies in the 3^rd^ Agriculture New Varieties Show held in May 2007.

Another serious problem is that there are too many varieties for each
crop in the market (in particular for corn, rice, and cotton), while few
of them show significant genetic advantage, therefore, the coverage of
each variety is usually limited. This increases the difficulty and
complexity in quality supervision and marketing of new varieties.

# 

# Agricultural Planted Area and Yields

Total sown area for all crops is generally stable at more than 150
million hectares. Grains and oilseeds take up the largest share, but the
planted area for vegetable and other horticultural products is
increasing. Multiple cropping, although declining, generates enormous
year-round seed demand. It is estimated that the 2007 sown area for
grain crops increased by 1 MHa relative to that for 2006 mainly due to
government's efforts to increase the national grain production.
Additionally, a decline in soybeans and rapeseed production, due to
lower profit received by farmers in the previous season, also
contributed to an increase in grain seed in China. Total sown area for
all crops is unlikely to fluctuate dramatically because of the limited
availability of arable land per capita. However, the planted area
designated for individual crops may vary slightly from year to year in
response to the market situation.

Agricultural Crop Sown Area in Million Hectares

<table>
<colgroup>
<col style="width: 8%" />
<col style="width: 7%" />
<col style="width: 9%" />
<col style="width: 7%" />
<col style="width: 11%" />
<col style="width: 9%" />
<col style="width: 11%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 7%" />
</colgroup>
<tbody>
<tr class="odd">
<td>Year/Crop</td>
<td>Rice</td>
<td>Wheat</td>
<td>Corn</td>
<td>Soybeans</td>
<td>Cotton</td>
<td>Rapeseed</td>
<td>Tubers</td>
<td>Peanut</td>
<td>Vege-tables</td>
<td><p>Sun-</p>
<p>flower</p></td>
</tr>
<tr class="even">
<td>2002</td>
<td>28.2</td>
<td>23.9</td>
<td>24.6</td>
<td>9.6</td>
<td>4.2</td>
<td>8.5</td>
<td>9.9</td>
<td>5</td>
<td>17.4</td>
<td>NA</td>
</tr>
<tr class="odd">
<td>2003</td>
<td>26.5</td>
<td>22</td>
<td>24</td>
<td>9.5</td>
<td>5.1</td>
<td>8</td>
<td>9.7</td>
<td>5.4</td>
<td>18</td>
<td>1.2</td>
</tr>
<tr class="even">
<td>2004</td>
<td>28.4</td>
<td>21.6</td>
<td>25.4</td>
<td>9.6</td>
<td>5.7</td>
<td>7.3</td>
<td>9.5</td>
<td>4.7</td>
<td>18.5</td>
<td>0.9</td>
</tr>
<tr class="odd">
<td>2005</td>
<td>28.8</td>
<td>22.8</td>
<td>26.4</td>
<td>9.6</td>
<td>5.1</td>
<td>7.3</td>
<td>9.5</td>
<td>4.7</td>
<td>17.7</td>
<td>1</td>
</tr>
<tr class="even">
<td>2006</td>
<td>29.3</td>
<td>23</td>
<td>27</td>
<td>9.3</td>
<td>5.4</td>
<td>6.9</td>
<td>9.5</td>
<td>4.6</td>
<td>18.2</td>
<td>1</td>
</tr>
<tr class="odd">
<td>*2007</td>
<td>29.3</td>
<td>23</td>
<td>27.5</td>
<td>8.6</td>
<td>5.5</td>
<td>6.5</td>
<td>9.5</td>
<td>4.6</td>
<td>18.2</td>
<td>1</td>
</tr>
<tr class="even">
<td colspan="11">Source: State Statistics Bureau. *Estimates by
USDA/FAS/China.</td>
</tr>
</tbody>
</table>

Crop yields remain stable, despite new hybrids and innovations in the
planting seed sector. Some experts suggest that as more farmers migrate
to cities, the reduction of in-farm labor, coupled with inadequate
rotation will inhibit genetic improvements and ultimately output. Still,
China's cotton yield remains high and is likely to increase further
along with the adoption of biotechnology. If the government is to
achieve its concurrent goals of food self-reliance and rural
development, then it must encourage development and planting of new
high-yielding varieties that require fewer inputs.

Agricultural Crop Yields in Metric Ton per Hectare

  ------------- ------- ------- --------- ---------- --------- ---------- ---------
  Year/Crop     Rice    Wheat   Corn      Soybeans   Cotton    Rapeseed   Peanut

  2002          6.2     3.8     4.9       1.7        1.2       1.5        3

  2003          6.1     3.9     4.8       1.6        1         1.6        2.9

  2004          6.3     4.3     5.1       1.8        1.1       1.8        3

  2005          6.3     4.3     5.3       1.7        1.1       1.6        3

  2006          6.2     4.55    5.4       1.7        1.25      1.8        3.2

  \*2007        6.2     4.6     5.4       1.6        1.25      1.7        3.2

  Source: State                                                           
  Statistics                                                              
  Bureau.                                                                 
  \*Estimates                                                             
  by USDA and                                                             
  FAS/China.                                                              
  ------------- ------- ------- --------- ---------- --------- ---------- ---------

# Trade

## Seed imports are expected to increase in MY07/08

China's seed imports for MY07/08 are forecast to increase from the
previous year. Imports of vegetable seeds and grass seeds are also
forecast to grow. Seed import value for MY06/07 stood at \$122 million,
up 15 percent over MY05/06. Vegetable, grass/forage, and sunflower seeds
continued to be the three largest categories, accounted for 43, 30, and
13 percent of the total value of seed imports, respectively. Increased
grass/forage and sunflower seeds, vegetables seed, and sugar beet
imports mainly supported the MY06/07 import growth. Industry sources
explained that the government's financial support for the "Grain for
Green[^1]" program was highlighted in the 11^th^ five-year period
(2006-2010). In 2006, the Chinese government appropriated \$125 million
in grassland restoration in western provinces. Another \$125 million was
appropriated to reduce desertification in the northern area of Beijing
and Tianjin. Some of these funds were used to purchase grass/forage
seeds. In the longer term, most industry sources expect grass seed
imports to increase because of pastureland restoration projects in the
western provinces and landscaping in China's burgeoning cities
continues. Increased vegetable seed imports reflect a more diversified
demand for varieties by the consumers with increased disposable incomes.
The trend is also driven by strong growth of vegetable product exports.
According to MOA, as compared with the same period in the previous year,
export of vegetable products in the first three quarters increased by 11
percent in volume and 15 percent in value, respectively. Japan,
distantly followed by the United States, is the major destination for
Chinese vegetable products. Thus, many industry experts believe
vegetable seed imports will continue growing in next few years,
especially the most popular varieties of onions, asparagus, squash, egg
plant, and tomato. Meanwhile, the rapid growth of China's dairy and
livestock sector (CH6074 and CH6100) is driving the demand for high
quality forage seeds.

In MY07/08, seed imports from the United States are forecast to increase
mainly because of the strong demand for grass and sunflower planting
seeds. MY06/07 imports from the United States grew dramatically to
\$50.6 million in value, up 41 percent from the previous year. Most of
this increase is attributed to increased vegetable, grass, and sunflower
seed imports. According to industry sources, the growth in sunflower
seed imports will continue in MY07/08, however, the growth rate is
likely to level off in the next 2 to 3 years. Sunflower seed demand has
grown because it can be used in almost any terrain and rising prices in
soybeans and vegetable oils will increase demand for sunflower oil.
Japan continued to be the largest supplier of vegetable seeds to China
with a total export value of \$15.6 million in MY06/07, up from \$14
million in MY05/06, although Thailand has ranked as the highest in
export volume to China for the past three years.

# 

## Demand for turf seeds and nursery seedlings remains strong

Imports of grass seeds for MY07/08 are expected to continue growing due
to large scale beautification projects in cities and other public areas
including green spaces for the massive residential construction
projects, highways, and parks/golf courses. The allocation of government
funds for grassland restoration in western provinces will also drive
turf grass seed imports. MY06/07 imports of grass and forage seeds
valued at \$37 million, up from the \$32 million for MY05/06. Planting
of grass and nursery products in parks, zoos, and on roadsides has also
grown sizably (see the following table). Although official data is not
available, the sod demand remains strong by numerous new living quarters
in cities mostly built with open green spaces and even sports
facilities. Industry sources report China's total number of golf courses
is estimated at more than 300 and expected to increase in the next few
years. The long-term outlook for urban beautification/green space design
includes planting more trees, shrubs, and grass, not only the largest
metropolitan areas like Beijing, Shanghai, Guangzhou, Qingdao and in
Dalian, but also in central and western China. Based on the State
Forestry Administration's (SFA) 11^th^ Five-Year (2006-2010) Forestry
Plan, China's cities' urban green space will reach 8 square meters per
urban dweller by 2010, from the present 6.5.

# 

  ------------------------------------- ---------- ---------- ---------- ---------- ------------
  **Urban Green Space**                 **2000**   **2003**   **2004**   **2005**   **2006\***

  Public Green Areas (10,000 Ha)\*\*    86.5       121.2      132.2      146.8      132.1

  Area of Parks and Zoos (10,000 Ha)    8.2        11.3       13.4       15.8       20.8

  Number of Parks and Zoos (unit)       4455       5832       6427       7077       6908

  \*Source: NSB 2005 Yearbook Table                                                 
  11-12; \*\*before 2005 defined by NSB                                             
  as \"area of urban garden and green                                               
  areas\"                                                                           
  ------------------------------------- ---------- ---------- ---------- ---------- ------------

The future of urban beautification landscaping and the nursery sector
remains bright as Chinese cities clamor to host international events,
e.g., the Beijing Olympics, the 2010 World Expo in Shanghai, and other
events that draw international visitors and businesses. Additionally,
many cities are spending more money on urban landscaping especially
lawns. Constraints to expanding domestic floriculture and sod farms
include inadequate water supply, rising water costs, poor soils, and
competition with food crops (less marginal land planted with grass and
nursery products). Nursery vendors remain optimistic at the growing
interest in importing grass seed for direct planting and for sod,
shrubs, and tree seedlings.

Nationwide Horticultural Planting Area (Ha)

  ----------------------------- -------- --------- --------- --------- --------
                                2000     2003      2004      2005      2006

  Cut Flowers, Vines, and       10,750   28,842    35,138    38,853    41603
  Potpourri                                                            

  Potted Plants                 18,841   46,626    78,529    60,007    72799

  Ornamental Trees              65,588   233,111   356,011   415,035   401639

  Food and Medicinal Flowers    14,801   51,325    84,382    182,589   85325

  Industrial Flowers            29,479   28,314    39,648    60,339    66473

  Grass Sod                     11,120   26,083    23,757    28,341    31025

  Flower Seed                   1,819    2,463     4,149     6,015     5061

  Young Plants/Seedlings        2,824    9,415     10,705    14,391    14806

  Flower Bulbs                  1,281    3,936     3,685     4,609     3404

  Source: Ministry of                                                  
  Agriculture Statistical                                              
  Abstract                                                             
  ----------------------------- -------- --------- --------- --------- --------

## Seed exports are expected to rise in MY07/08

Seed exports are forecast to continue growing in MY07/08 due mainly to
China's low cost structure for seed breeding operations. Total seed
exports for MY06/07 rose rapidly to \$88.3 million from the \$75.1
million for MY05/06. Vegetable, rice, and fruit/melon seed export values
continue to rank the highest, accounting for 46, 22, and 10 percent,
respectively. Hybrid rice seed exports, mainly to Vietnam and
Bangladesh, remain unchanged. Industry contacts reported that hybrid
rice seed exports to other Asian countries are likely to increase
steadily in the foreseeable future due to China's technical advantages
and the successful adaptability of China's hybrid rice to climate and
the local environment. Vegetable seed exports also increased to \$40
million from \$37.8 million in MY05/06.

In MY06/07, the United States, Korea and the Netherlands were the three
largest export markets for China's vegetable seeds in value. Korea,
however, ranked first in volume. The value of vegetable seed exports to
the United States reached \$12.4 million from the \$11.6 million for
MY05/06. Strong exports reflect China's price advantage in seed breeding
whether these are imported (for re-export) or new domestic varieties.
According to MOA, contracted seed breeding by foreign seed trade
companies is increasing along with the improved implementation of
regulations on the "Protection of New Plant Varieties".

# Marketing Entry and Promotion

China's onerous investment, import, and marketing laws and regulations
for the planting seed sector remain unchanged. The country's policy on
foreign investment in the seed sector (CH2012 and CH7048) still prevents
any investment by foreign enterprises in genetically engineered planting
seed sector, while investment for "main crop" varieties is limited to a
minority share. Many foreign seed companies, however, have established
representative offices in China. They normally work with a few
importers, but establish vast networks and relationships with seed
wholesalers and vendors in regions or markets with the best potential.
When introducing new varieties to China, companies usually demonstrate
seed quality in trial plots before they decide which varieties to market
to farmers. Demonstration trials are the best way to showcase farmers
the advantages of newly developed varieties. This is commonly done by
domestic seed enterprises. Local officials/experts and farmers are
usually invited and briefed, especially during harvest season. It is
also effective to provide free seeds to farmers or farmer cooperatives
for trial planting. For instance, seed traders in China's western
provinces introduced several sunflower varieties from the United States
and other countries for trial planting before they decided to select the
varieties for import. In general, farmers purchase seeds from local
county or village level seed stations. Seed vendors mainly promote the
seeds that have the highest profit margins; therefore, it is important
to note that price is an important concern when selling seeds to
small-scale household farmers.

In recent years farmer cooperatives have facilitated the dissemination
and trade of BT cotton seeds. A newly adopted legislation passed by the
National People's Congress is expected to benefit farmer cooperatives on
production and marketing. Cooperatives will also help farmers become
more self-sufficient and market-oriented.

Trade shows are another way to expose farmers to new varieties. For
example, China's National Agriculture Technology Extension Center/MOA
and China Seed Association sponsor an annual national seed fair with
support from the leading (mainly domestic) seed companies. The fair
principally focuses on main crops but also includes vegetable and fruit
seeds/varieties. The 2007 fair was held in Hefei, Anhui Province, in
October. Over two thousand seed-related entities participated with more
than 400 including thirty overseas entities from the United States,
Demark, Israel, Korea and Japan exhibited products in the fair. Many
regional (one or several provinces) or specialized (such as vegetable or
oilseeds seed fairs) are held regularly such as "Seed Fairs" held in
Guangzhou, Wuhan, Hefei, Beijing, Yangling and Harbin etc. There are
also several new variety transfer fairs held regularly, which provide a
platform for variety developers and seed companies to trade. The 3^rd^
China New Plant Variety Show and Transfer Fair was held in Jiangsu
Province in May 2007. The MOA sponsored event included 15 entities that
were granted new plant varieties certificates. More information on the
fair is available at: <http://www.aweb.com.cn/>,
<http://www.agri.gov.cn/> and [http://www.seedchina.com.cn/]{.underline}

The 21^st^ International Grassland Congress and the 8^th^ International
Rangeland Congress will be held in Hohhot, Inner Mongolia, China from
June 29 to July5, 2008. The congress is expected to provide a platform
for scientists and industry leaders on preservation and utilization of
grassland and rangeland. For more information, please see:
<http://igc-irc2008.org/index.htm> and link.

# 

# Policy Issues 

## No new amendments to China's Seed Law 

In August 2004, China published changes to Articles 17 and 33 of its
Seed Law (GAIN CH4063 and CH0031). The Seed Law Implementation Measures
(CH1052) and the Interim Articles from Crop Seed (seedling) Import and
Export (CH4060) were not affected. Nevertheless, MOA said some problems
surfaced along with the rapid development of the seed sector. Industry
sources said the problems focus on "new variety approval structure",
"market access mechanism" and "market management system". In response to
some questions raised by the industry, on January 26, 2006, MOA issued a
circular clarifying the definition and coverage of some articles of the
Seed Law. There have been no reports on additional amendments to the
Seed Law thereafter.

Industry sources report there is no significant improvement on the
enforcement of the Seed Law and relevant rules and regulations. Official
statistics are not available on IPR infringement and counterfeit cases
for MY06/07. Industry sources reported that the low threshold for new
variety review and approval provoked IPR infringement. Along with the
increased applications for new varieties, more "new varieties" share
similar characters and traits. According to MOA, as of the end of
September 30, 2007, the total approved corn and rice varieties reached
537 and 456, respectively.

The Administrative Measures for Grass Seeds (CH6008) published by MOA
took effect on March 1, 2006, but was not notified to the World Trade
Organization (WTO). Post contacted the relevant Chinese authorities and
requested that they comply with the WTO SPS notification requirements by
notifying this decree. Incidentally, Post has received no complaints
since the implementation of the Decree.

Labeling -- China's National Standard "General Directive for Labeling of
Agricultural Seeds" took effect on November 1, 2006. In general, the
standard was a combination of the existing rules and regulations. As of
this report, there have been no complaints by seed traders on the
enforcement of the standard.

## 

## Agricultural commodity import regulations remain in place 

China's Animal and Plant Quarantine Law (CH1051), its Implementation
Regulations (CH3110), the Administrative Measures (CH2039), and the
"items on Handling Review and Approval of Entry Animal and Plant
Quarantine" (CH4020) establish procedures for importers wishing to
purchase propagating material, including seed. Essentially, importers
must apply for a Quarantine Import Permit (QIP) before signing any
contract. Only with a QIP (valid for six months), is it permissible to
sign a contract to import seeds.

## 

## Planting seed phytosanitary and licensing restrictions 

Corn and soybean seeds imports from certain countries including the
United States are still prohibited because of quarantine restrictions on
"Stewart's Wilt" and "Phytophthera Megasperma". (Additionally, China has
not yet approved any GE corn and soybean varieties for environmental
release). As for other planting seeds, both the requirements for "main
crops" variety approval, as well as licensing requirements for seed
production and marketing, place arbitrary restrictions on the seed
trade.

Industry sources indicate importers of certain seeds have been asked to
submit an annual import plan to MOA and China's State Forestry
Administration (SFA). A fee ranging from 0.5 to one percent of the
import contract value is collected by the relevant government agencies.
The statutory basis for this requirement, however, is unclear.
Government offices reportedly use the information when deciding how to
award VAT-free import approvals.

Exporters of U.S. planting seeds should contact the USDA Foreign
Agriculture Service Planting Seeds Group
([www.fas.usda.gov/cots/seeds.html]{.underline}), APHIS officers
([www.aphis.usda.gov/is/tst/RegionThree.html](http://www.aphis.usda.gov/is/tst/RegionThree.html)),
and the American Seed Trade Association
([www.amseed.com/](http://www.amseed.com/)) and the Oregon Seed Council
([forages.oregonstate.edu/organizations/seed]{.underline}) to understand
the process and regulations for planting seed exports to China.
Exporters should be aware, however, that final import approval of any
product is subject to the importing country's rules and regulations as
interpreted by border officials at the time of product entry. Therefore,
it is particularly valuable to ensure that importers are familiar not
only with published rules but also the customary practices.

## Seed tariffs and the value added tax (VAT) 

China has tariff-rate quotas for seed wheat, rice, corn, and a few other
non-grain commodities[^2]. In-quota wheat, corn, and rice seed are
subject to a 1 percent tariff, while all other planting seeds enter
tariff-free. Out-of-quota tariffs for seed corn are 20 percent, while
out-of-quota tariffs for wheat and rice are 65 percent (See CH6036).

The VAT-free policy on seed imports took effect in 2006, and will remain
in place during China's "11^th^ Five-Year Plan" (2006-2010) period. The
VAT exemption procedure, however, lacks transparency and efficiency.
Industry sources report that, in the current VAT-free regime, within
each year of the plan, usually during April or May, the relevant
government offices send circulars or other internal notices to customs
officials confirming what products and companies have VAT-free status.
There are also tedious procedures for a company to be registered in the
importation of seeds. This confusing system leads to an unstable market
because importers and the companies they represent cannot book seeds for
shipment from the beginning of the year to the time the Customs Offices
are notified by the above-mentioned VAT Exemption Circular/Notice.

## 

## Plant variety protection (PVP) background and development 

China became the 141st member of International Plant Protection
Commission (IPPC) on October 20, 2005. The official liaison office is
affiliated with MOA. China has legally recognized the 1978 version of
the International Convention for the Protection of New Varieties of
Plants (UPOV) effective since October 1, 1997 (CH7023). MOA and SFA are
responsible for reviewing PVP applications. China's UPOV membership
obligates China to honor, sui generis, the breeders' rights for
registered and approved novel, distinct, uniform and stable (DUS) seeds.

+----------------------------------+-----------------------------------+
| ####### Gov                      |                                   |
| ernment Offices Responsible for  |                                   |
| PVP Applications and Development |                                   |
+----------------------------------+-----------------------------------+
| Ministry of Agriculture PVP      | State Forestry Administration's   |
| Office                           | PVP Office                        |
+----------------------------------+-----------------------------------+
| No. 11 Nongzhanguannanli         | No. 18 Hepingli Dong Jie          |
+----------------------------------+-----------------------------------+
| Chaoyang District                | Chaoyang District                 |
+----------------------------------+-----------------------------------+
| Beijing, China 100026            | Beijing, China 100714             |
+----------------------------------+-----------------------------------+
| Tel: 86-10 64193029/65927554     | Tel: 86-10 84238883               |
+----------------------------------+-----------------------------------+
| Fax: 86-10 64194661              | Fax: 86-10 64213084               |
|                                  |                                   |
| E-mail:chenhong@agri.gov.cn      | E-mail:webmaster@cnpvp.net        |
+----------------------------------+-----------------------------------+
| Web:                             | Web:                              |
| [www                             | [www.                             |
| .cnpvp.cn](http://www.cnpvp.cn/) | cnpvp.net](http://www.cnpvp.net/) |
+----------------------------------+-----------------------------------+
| Web2:                            |                                   |
| [www.stee.agri.gov.c             |                                   |
| n](http://www.stee.agri.gov.cn/) |                                   |
+----------------------------------+-----------------------------------+

MOA reports that from the time it began accepting applications in 1999
through September 30, 2007, the PVP office received 4,367 applications
for new PVP. At present, 1,303 applications have been completely
reviewed and approved. The greatest number of applications and approvals
are for major field crops including corn, rice, wheat, soybeans, and
rapeseed in this order. The number of applications for corn, rice and
wheat, as the top three, accounted for roughly 38, 32, and 10 percent,
respectively. Interestingly, only a few applications for turf grass have
been accepted: two for Rumex L and one for alfalfa. The total approved
corn and rice varieties reached 993, accounting for 76 percent of the
total approved plant varieties. Total applications for 2006 (as of
September 30) are slightly lower than the same period in 2006.
Agricultural research institutes and universities/colleges filed 58
percent of the applications as compared to the 38 percent by domestic
seed enterprises and individuals. Additionally, 20 out of the 168
foreign applications received for new PVP were reviewed and approved. As
of the end of October 2007, SFA also received about 480 applications,
including 126 by foreign enterprises. As of the end of June 2007, a
total of 140 applications had been reviewed and approved.

At present, there is one MOA distinctiveness, uniformity, and stability
(DUS) testing center, 14 DUS sub-centers, and 21 SFA testing agencies
around the country. According to MOA and SFA, more new testing
laboratories will be established in the "11^th^ Five-Year" period. To
ensure scientific and authoritative determination of plant variety
rights, China formulated guidelines for testing 80 new varieties of
plants, including corn, rice, poplar and peony, of which 18 have been
promulgated and implemented as the "national or industrial standards".

On January 18, 2006, the National Technical Committee for New Plant
Variety Testing Standardization was established. The committee,
affiliated to MOA but including experts from SFA and Ministry of Science
and Technology (MOST), is aimed to lend technical support for PVP
management practices.

On September 19, 2007, MOA published "Implementing Rules for the
Regulations on Protection of New Plant Varieties/Agriculture Part" and
the Rules will take effect beginning January 1, 2008. The Implementation
Rules for the Regulations on the Protection of New Plant Varieties of
the People's Republic of China (Agriculture Part) promulgated on June
16, 1996 will be simultaneously annulled. An unofficial translation of
these Rules as a GAIN report will be published shortly. The trade impact
of these rules is still not clear.

## Intellectual property rights (IPR) issues for planting seed enterprises 

Despite the implementation and enforcement of IPR laws and regulations,
IPR infringement and counterfeit cases occur frequently. According to
MOA, cumulatively IPR infringement and counterfeit cases reached 299 and
564 as of the end of 2004, respectively. Though no official statistics
are available for MY06/07, industry sources said the situation had seen
slight improvement in the past two years. It is increasingly popular for
seed traders to purchase new varieties directly from the developers
including research institutes and universities. China's Industry sources
report that trademark or copyright registration will facilitate
marketing and IPR protection.

Seeds sold in counterfeit packages identical to legitimate brand names
are the most frequent problem for seed companies. Other IPR crimes
include theft of seed/germplasm from production fields or facilities
that are then bred and marketed by other companies. Seed companies also
report demands for restitution for "inferior quality" seeds sold by
counterfeiters.

GAIN report CH2049 provides information on how to access UNOFFICIAL
English translations of China's Copyright Law, Trademark Law, and Patent
Law along with the Implementation Regulations or Enforcement Measures
for each of the aforementioned.

## Biotechnology and planting seeds 

China has a strong biotech research program and has committed \$500
million in investment monies during the 11^th^ Five-Year Plan
(2006-2010). China has commercialized four GE plants since 1997,
including cotton, tomatoes, sweet peppers, and petunias. Although there
are no official statistics, some experts reported the development of
over 100 transgenic crops with about 60 already in field trials,
including rice, corn, wheat, soybeans, and peanut. Although biotech (BT)
cotton has been widely planted, China has yet to approve any major food
crop for environmental release. MOA has approved four GE cotton
varieties for import and planting, and one GE soybean, seven GE canolas
and nine GE corn varieties for import as processing material. MOA is
drafting 51 transgenic crop testing and safety evaluation standards in
anticipation of increased transgenic crop development. MOA also requires
authorized domestic institutions to conduct environmental safety (field
trials) and food safety (animal feeding) tests to verify data provided
by the seed developer.

Transgenic crops and seeds need to be approved by the National Biosafety
Committee (NBC) after environmental and food safety evaluations by MOA
and government affiliated institutes. Once granted MOA safety approval,
transgenic seeds must then undergo examination for distinctness,
uniformity, and stability (DUS) by PVP examiners. China's PVP office
drafted new DUS testing guidelines for corn and rice, thereby lending
speculation that if transgenic corn and rice events receive safety
approval, the process for PVP testing for those seeds can move forward
quickly and transparently.

The approval process so far has proved cumbersome and lack transparency.
China's biotechnology regulations require foreign introduced transgenic
events to first receive approval abroad and then undergo subsequent
evaluation in China. This is a painstaking process not only for
commercial shipments containing transgenic commodities, but also for the
adoption of future transgenic seeds in countries that export to China.
The barriers include requirements 1) that product must be fully approved
in the originating country before the application can be submitted for
approval in China; 2) unprecedented testing for products already
approved in other countries, a requirement that foreign seed developers
provide viable seeds for developing detection methods; 3) the lack of
specific regulatory guidelines to approve stacked events; 4) and holding
only two windows a year for acceptance of applications.

Many scientists and economists recognize the potential benefits of
commercializing transgenic planting seeds. Analysts point out that not
only will state-sponsored research institutes benefit from licensing
technology to seed companies, but farmers would also benefit from lower
direct and indirect costs, increased yields, and lower pesticide
applications. Official studies demonstrate both the economy and the
environmental benefits, including the elimination of hundreds of
accidental pesticide poisonings.

# Trade Tables

## Table 1 China\'s Imports from the World in Volume & Value

  ---------- ---------------- ------------- ------------- ------------- ------------- ------------- -------------
             MY(Jul-Jun)      **Volume                                  **Value                     
                              (KG)**                                    (US\$)**                    

  **HS       Planting Seeds   **MY04/05**   **MY05/06**   **MY06/07**   **MY04/05**   **MY05/06**   **MY06/07**
  Code**                                                                                            

             **Total**        21,398,960    24,587,807                  77,508,210    106,100,000   122,378,000

  10019010   Wheat            1             0             0             1             0             0

  10020010   Rye                            0             0             0             0             0

  10030010   Barley                         0             0             0             0             0

  10040010   Oats             49            0             0             438           0             0

  100510     Corn             76,267        71,910        97,732        594,049       1,099,000     1,758,000

  10061011   Rice,long grain                0             0             0             0             0

  10061019   Rice, other      685           2,000         0             21,570        68,000        0

  10070010   Sorghum          115           363           2,487         194           3,000         4000

  10089010   Other cereals    0             0             0             0             0             0

  12010010   Soybeans         40            1,047         135           376           8,000         1000

  12021010   Peanuts          0             0             0             0             0             0

  12051010   Rape/Colza,low   0             0             0             0             0             0
             erucic acid                                                                            

  12059010   Rape/Colza,nes   3             0             0             6             0             0

  12060010   Sunflower        910,664       1,592,845     1,669,078     5,042,782     13,718,000    16,181,000

  12072010   Cotton           1,906         1,530         9,280         10,655        7,000         23,000

  12091000   Other sugar beet 389           1,003         235           14,010        4,000         4,000

  120921     Alfalfa          766,770       129,506       65,005        1,477,675     418,000       258,000

  120922     Clover           1,269,134     2,147,802     1,009,733     3,739,220     7,605,000     2,690,000

  120923     Fescue           5,621,940     5,416,877     6,437,681     6,421,425     6,919,000     11,876,000

  120924     Kentucky         1,739,080     2,026,502     3,427,141     4,749,913     5,211,000     8,256,000

  120925     Rye grass        2,784,158     2,670,556     4,440,496     2,828,405     3,059,000     5,040,000

  120930     Herbaceous       225,380       171,938       67,720        4,405,003     4,400,000     4,303,000

  120926     Timothy          22,007        0             4,000         61,000        0             4,000

  12092990   Other Forage     872,579       2,338,199     1,756,577     2,811,350     4,551,000     4,424,000

  12092910   Sugar beet       420,361       341,250       894,949       2,359,938     3,026,000     8,483,000

  120999     Fruit,Melon and  944,774       1,174,728     1,229,736     4,776,372     6,193,000     6,249,000
             Other                                                                                  

  120991     Vegetable        5,742,658     6,499,751     5,501,908     38,193,828    49,811,000    52,824,000
  ---------- ---------------- ------------- ------------- ------------- ------------- ------------- -------------

Source: World Trade Atlas

## Table 2 China\'s Imports from the U.S. in Volume & Value 

  ---------- --------------------- ------------- ------------- ------------- ------------- ------------- -------------
                                   **Volume                                  **Value                     
                                   (KG)**                                    (US\$)**                    

  **HS       **Planting            **MY04/05**   **MY05/06**   **MY06/07**   **MY04/05**   **MY05/06**   **MY06/07**
  Code**     Seeds/MY(Jul-Jun)**                                                                         

             **Total**             11,357,704    11,542,168    14,416,547    26,957,979    35,857,000    50,653,000

  10019010   Wheat                 0             0             0             0             0             0

  10020010   Rye                   0             0             0             0             0             0

  10030010   Barley                              0             0             0             0             0

  10040010   Oats                  0             0             0             0             0             0

  100510     Corn                  4             0             0             6,096         0             0

  10061011   Rice, long grain      0             0             0             0             0             0

  10061019   Rice, other           0             0             0             0             0             0

  10070010   Soghum                0             0             0             0             0             0

  10089010   Other cereals         0             0             0             0             0             0

  12010010   Soybean               0             0             0             0             0             0

  12021010   Peanut                0             0             0             0             0             0

  12051010   Rape/Colza,low erucic 0             0             0             0             0             0
             acid                                                                                        

  12059010   Rape/Colza, nes       0             0             0             0             0             0

  12060010   Sunflower             618,820       1,238,036     1,344,049     3,578,363     9,637,000     13,762,000

  12072010   Cotton                1,881         0             0             10,449        0             0

  12091000   Other sugar beet      0             0             205           41            0             3,000

  120921     Alfalfa               62,504        15,000        5,000         202,961       84,000        23,000

  120922     Clover                10,000        24,947        19,958        32,000        80,000        79,000

  120923     Fescue                5,424,585     4,722,736     5,525,689     6,202,667     6,071,000     10,336,000

  120924     Kentukey              1,615,980     1,804,908     2,791,115     4,492,683     4,777,000     7,137,000

  120925     Rye grass             2,518,558     2,006,901     2,386,029     2,397,515     2,258,000     2,486,000

  120930     Herbaceous            46,924        7,087         2,413         2,399,636     2,409,000     2,610,000

  120926     Timothy               10,001        0             0             35,000        0             0

  12092910   Sugar beet            0             0             200           0             0             20,000

  12092990   Other forage          568,107       615,267       1,405,873     2,327,836     2,680,000     3,994,000

  120999     Fruit, Melon & Other  138,731       627,722       484,585       874,885       2,994,000     2,676,000

  120991     Vegetable             341,609       479,564       451,431       4,397,847     4,867,000     7,527,000
  ---------- --------------------- ------------- ------------- ------------- ------------- ------------- -------------

Source: World Trade Atlas

## Table 3 China's Major Seed Imports and Major Countries of Origins

  ------------------- --------------- -------------- ------------- -------------
  **Clover Imports                                                 
  Volume and Major                                                 
  Origins (in KG)**                                                

  **Country**         **MY 03/04**    **MY04/05**    **MY05/06**   **MY06/07**

  Australia           1219877         806984         1535800       377,400

  New Zealand         149199          0              209259        0

  Canada              151000          311650         148000        320,000

  United States       22948           10000          24947         19,958

  Others              293975          140500         229796        292,375

  **Total**           1836999         1269134        2147802       1,009,733

                                                                   

  **Fescue Seeds                                                   
  Imports Volume and                                               
  Major Origins (in                                                
  KG)**                                                            

  **Country**         **MY 03/04**    **MY04/05**    **MY05/06**   **MY06/07**

  United States       6,325,012       5,424,585      4,722,736     5,525,689

  Denmark             352,729         58,830         426,111       677,165

  Canada              180,935         138,525        267,964       200,826

  **Total**           6,898,855       5,621,940      5,416,877     6,437,681

                                                                   

  **Kentucky Seeds                                                 
  Import Volume and                                                
  Major Origins (in                                                
  KG)**                                                            

  **Country**         **MY 03/04**    **MY04/05**    **MY05/06**   **MY06/07**

  United States       2,030,153       1,615,980      1,804,908     2,791,115

  Denmark             454,925         123,100        201,575       635,550

  **Total**           2,601,294       1,739,080      2,026,502     3,427,141

                                                                   

  **Rye Grass Imports                                              
  Volume and Major                                                 
  Origins (in KG)**                                                

  **Country**         **MY03/04**     **MY04/05**    **MY05/06**   **MY06/07**

  United States       3,544,715       2,518,558      2,006,901     2,386,029

  Denmark             349,900         158,000        264,725       643,828

  Canada              2,041           0              175,946       1,256,563

  Netherlands         40,000          60,000         75,975        134,051

  **Total**           4,253,106       2,784,158      2,670,556     4,440,496

                                                                   

  **Herbaceous                                                     
  Imports Volume and                                               
  Major Origins (in                                                
  KG)**                                                            

  **Country**         **MY03/04**     **MY04/05**    **MY05/06**   **MY06/07**

  United Kingdom      289,285         18,166         99,395        100

  Poland              0               0              44,000        354

  Netherlands         3,768           3,041          12,996        63,498

  United States       18,057          46,924         7,087         2,413

  **Total**           419,201         225,380        171,938       67,720
  ------------------- --------------- -------------- ------------- -------------

Source: World Trade Atlas

**Table 3 (Continued)**

  ---------------- ------------- -------------- -------------- -------------
  **Other Forage                                               
  Imports Volume                                               
  and Major                                                    
  Origins (in                                                  
  KG)**                                                        

  **Country**      MY03/04       MY04/05        MY05/06        MY06/07

  **United         862,058       568,107        615,267        1,405,873
  States**                                                     

  Canada           75,000        44,100         1,305,531      79,539

  China            0             0              280,000        0

  Denmark          71,065        61,985         125,894        30,000

  **Total**        1,317,203     872,579        2,338,199      1,756,577

                                                               

  **Sunflower                                                  
  Planting Seed                                                
  Imports Volume                                               
  and Major                                                    
  Origins (in                                                  
  KG)**                                                        

  **Country**      **MY03/04**   **MY04/05**    **MY05/06**    **MY06/07**

  **United         372,353       618,820        1,238,036      1,344,049
  States**                                                     

  Australia        66,480        184,893        140,387        83,605

  Israel           29,100        41,740         95,776         16

  India            210           40,018         64,202         94,732

  **Total**        470,345       910,664        1,592,845      1,669,078

                                                               

  **Fruit, Melon                                               
  and Other Import                                             
  Volume and Major                                             
  Origins (in                                                  
  KG)**                                                        

  **Country**      **MY03/04**   **MY04/05**    **MY05/06**    **MY06/07**

  **United         244,073       138,731        627,722        484,585
  States**                                                     

  Taiwan           804,555       420,322        220,277        145,763

  Thailand         185,179       205,368        78,463         51,729

  Canada           67,542        339            73,097         43,577

  Australia        54,622        54,154         68,151         147,230

  **Total**        1,687,730     944,774        1,174,728      1,229,736

                                                               

  **Vegetable                                                  
  Import Volume                                                
  and Major                                                    
  Origins (in                                                  
  KG)**                                                        

  **Country**      **MY03/04**   **MY04/05**    **MY05/06**    **MY06/07**

  Thailand         2,227,317     2,216,903      2,399,937      1,638,425

  Japan            770,377       757,396        791,999        923,490

  Australia        1,225,818     797,161        783,013        660,814

  **United         197,814       341,609        479,564        451,431
  States**                                                     

  Germany          1,972         80,138         463,007        3,679

  Denmark          406,795       359,204        421,522        718,067

  Indonesia        177,260       556,424        404,223        284,793

  New Zealand      211,704       115,957        256,979        128,701

  **Total**        5,595,609     5,742,658      6,499,751      5,501,908
  ---------------- ------------- -------------- -------------- -------------

Source: World Trade Atlas

## Table 4 China\'s Exports to the World in Volume & Value

  ---------- ----------------- ---------------- ------------- ------------- ----------------- ------------- -------------
             **MY(Jul-Jun)**   **Volume(KG)**                               **Value(US\$)**                 

  **HS       **Planting        **MY04/05**      **MY05/06**   **MY06/07**   **MY04/05**       **MY05/06**   **MY06/07**
  Code**     Seeds**                                                                                        

             **Total**         26,441,290       30,548,936    33,257,466    60,503,914        75,131,000    88,257,000

  10019010   Wheat             300,001          84            0             60,001            0             0

  10020010   Rye               304,400          1,200         0             136,205           1,000         0

  10030010   Barley            244,500          29,214        0             61,050            12,000        0

  10040010   Oats              45,500           0             0             16,586            0             0

  100510     Corn Seed         347,614          128,434       108,758       313,756           146,000       185,000

  10061011   Rice Long Grain   10,867,943       11,200,613    14,846,429    9,381,635         10,690,000    15,676,000

  10061019   Rice Other        2,107,649        1,835,045     1,872,141     3,238,256         2,462,000     3,329,000

  10070010   Sorghum           9,257            6,580         15,410        15,872            10,000        22,000

  10089010   Other Cereals     9,173            1,990         2,674         16,524            1,000         1,000

  12010010   Soybeans          151,858          240,492       316,791       138,546           119,000       120,000

  12021010   Peanuts           90,600           0             256,550       56,170            0             161,000

  12051010   Rape/Colza, low   0                1,740         7,128         0                 3,000         10,000
             erucic acid                                                                                    

  12059010   Rape/Colza,nes    22,125           15,001        7,823         13,593            2,000         18,000

  12060010   Sunflower         81,345           102,055       84,749        244,307           236,000       77,000
             Planting                                                                                       

  12072010   Cotton Planting   171,268          224,181       484,592       427,666           897,000       1,637,000

  12092910   Other Sugar Beet                   0             440           0                 0             2,000

  120921     Alfalfa           2,936,865        3,864,435     4,650,825     3,821,498         4,326,000     6,724,000

  120922     Clover            3,350            0             2,120         8,620             0             7,000

  120923     Fescue            20,000           103,073       0             30,400            133,000       0

  120925     Rye Grass         18,070           0             415           44,422            0             2,000

  120930     Herbaceous        618,713          819,203       745,651       4,744,890         5,619,000     5,641,000

  120926     Timothy           3,000            8,000         0             10,000            13,000        0

  12091000   Sugar Beet        536              24,054        0             1,044             74,000        0

  12092990   Other Forage      2,337,536        4,363,414     4,379,067     2,891,030         5,618,000     5,299,000

  120999     Fruit,Melon and   1,147,914        1,030,052     975,105       6,028,404         6,989,000     9,209,000
             Other                                                                                          

  120991     Vegetable         4,602,073        6,550,076     4,500,798     28,769,017        37,780,000    40,137,000
  ---------- ----------------- ---------------- ------------- ------------- ----------------- ------------- -------------

Source: World Trade Atlas

## Table 5 China\'s Exports to the U.S. in Volume and Value

  ---------- ----------------- ------------- ------------- ------------- ------------- ------------- -------------
             **MY(Jul-Jun)**   **Volume                                  **Value                     
                               (KG)**                                    (US\$)**                    

  **HS       **Planting        **MY04/05**   **MY05/06**   **MY06/07**   **MY04/05**   **MY05/06**   **MY06/07**
  Code**     Seeds**                                                                                 

             **Total**         766,517       1,140,797     1,448,723     10,026,632    13,501,000    14,470,000

  10019010   Wheat             0             0             0             0             0             0

  10020010   Rye               0             0             0             0             0             0

  10030010   Barley            0             0             0             0             0             0

  10040010   Oats              0             0             0             0             0             0

  100510     Corn              0             0             0             0             0             0

  10061011   Rice Long Grain   0             0             0             0             0             0

  10061019   Rice Other        0             0             0             0             0             0

  10070010   Sorghum           0             0             0             0             0             0

  10089010   Other Cereals     1,936         0             0             7,373         0             0

  12010010   Soybeans          119,010       0             0             52,364        0             0

  12021010   Peanuts           0             0             0             0             0             0

  12051010   Rape/Colza, low   0             0             0             0             0             0
             erucic acid                                                                             

  12059010   Rape/Colza,nes    0             0             0             0             0             0

  12060010   Sunflower         0             0             1,983         0             0             1,000

  12072010   Cotton            14,846        96,102        15,655        37,105        384,000       39,000

  12092910   Other Sugar Beet  0             0             0             0             0             0

  120921     Alfalfa           20,175        93,500        118,150       19,973        35,000        288,000

  120922     Clover            0             0             0             0             0             0

  120923     Fescue            20,000        40,052        0             30,400        51,000        0

  120925     Rye Grass         0             0             0             0             0             0

  120930     Herbaceous        214,711       227,882       336,285       298,616       423,000       658,000

  120930     Timothy           0             0             0             0             0             0

  12091000   Sugar Beet        0             0             0             0             0             0

  12092990   Other Forage      20,475        113,226       23,857        27,192        209,000       47,000

  120999     Fruit,Melon and   35,945        36,866        35,622        826,440       762,000       1,052,000
             Other                                                                                   

  120991     Vegetable Seeds   319,419       533,169       917,171       8,727,169     11,637,000    12,385,000
  ---------- ----------------- ------------- ------------- ------------- ------------- ------------- -------------

Source: World Trade Atlas

## Table 6 China's Major Seed Exports and Major Countries of Origins

  ------------------- ----------------- ----------------- ----------------
  **Other Forage                                          
  Exports Volume and                                      
  Major Destinations                                      
  (in KG)**                                               

  **Country**         **MY04/05**       **MY05/06**       **MY06/07**

  Korea, South        1,262,704         3,672,889         3,703,611

  Japan               546,857           405,535           286,919

  Germany             238,000           0                 141,720

  Taiwan              0                 108,440           108,930

  United States       20,475            113,226           23,857

  Others              269,500           63,324            114,030

  Total               2,337,536         4,363,414         4,379,067

                                                          

  **Rice, Long Grain                                      
  Exports Volume and                                      
  Major Destinations                                      
  (in KG)**                                               

  **Country**         **MY04/05**       **MY05/06**       **MY06/07**

  Vietnam             10,149,905        9,608,941         10,571,987

  Bangladesh          546,440           1,131,077         3,237,582

  Pakistan            120,000           350,519           909,218

  Indonesia           8,248             0                 126,000

  Philippines         2,150             2,076             1,300

  Others              41,200            108,000           342

  Total               10,867,943        11,200,613        14,846,429

                                                          

  **Vegetable Seed                                        
  Exports in Volume                                       
  and Major                                               
  Destinations (in                                        
  KG)**                                                   

  **Country**         **MY04/05**       **MY05/06**       **MY06/07**

  Korea, South        1,267,537         1,935,511         1,493,564

  United States       319,419           533,169           917,171

  Netherlands         877,847           1,040,098         450,239

  Japan               311,622           280,378           383,863

  Taiwan              232,857           276,865           263,851

  France              386,791           435,638           183,482

  Thailand            218,683           294,524           137,283

  Others              987,317           1,753,893         671,345

  Total               4,602,073         6,550,076         4,500,798
  ------------------- ----------------- ----------------- ----------------

Source: World Trade Atlas

**Table 6 (continued)**

  ---------------------------- -------------- -------------- --------------
  **Vegetable Seed Exports in                                
  Value and Major Destinations                               
  (in US\$)**                                                

  **Country**                  **MY04/05**    **MY05/06**    **MY06/07**

  **United States**            8,727,169      11,637,313     12,385,374

  Korea, South                 4,570,454      5,606,431      7,982,574

  Netherlands                  4,492,026      6,267,241      5,725,368

  Japan                        2,232,132      2,589,800      4,062,361

  Others                       8,747,236      11,679,708     9,981,007

  Total                        28,769,017     37,780,493     40,136,684

                                                             

  **Fruit, Melon & Other                                     
  Exports in Volume and Major                                
  Destinations (in KG)**                                     

  **Country**                  **MY04/05**    **MY05/06**    **MY06/07**

  Korea, South                 583,300        536,371        375,292

  Japan                        340,418        228,083        294,259

  Netherlands                  19,626         30,320         45,251

  France                       8,309          37,858         45,140

  **United States**            35,945         36,866         35,622

  Pakistan                     10,734         12,506         32,135

  Taiwan                       49,536         35,582         28,002

  Russia                       103            462            26,126

  Others                       99,943         112,004        93,278

  Total                        1,147,914      1,030,052      975,105
  ---------------------------- -------------- -------------- --------------

Source: World Trade Atlas

[^1]: ^1^ A program that pays farmers to plant trees or grasses instead
    of row crops.

[^2]: This is allowed under China's WTO accession agreement.