Voluntary Report - public distribution

**Date:** 6/16/2006

**GAIN Report Number:** CH6043

**China, Peoples Republic of**

**Agricultural Situation**

**Newsflash**

**2006**

**Approved by:**

![](media/image1.wmf)Kevin Latner

Agricultural Affairs Office, U.S. Embassy, Beijing

**Prepared by:**

Zhang Jianping and Caleb O\'Kray

**Report Highlights:**

This report provides a news synopsis of trade policy and
agriculture/commodities in China. Trade policy news includes: export tax
rebate to adjust downwards; ban of Djibouti live poultry and poultry
product imports. Agriculture/commodities news includes: seed companies
segregated from administrative agencies; China loses \$9 billion in
agricultural exports due to technical barriers to trade; 2005/06 sugar
production down to 8.82 MT; avian influenza outbreaks in Tibet and
Xinjiang; China "School-Milk Program" success; nationwide check-up on
preexisting animal disease quarantine work; Dalian scrutiny of beef
imports; expected low prices for meat, chicken and eggs in 2006 second
half.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Beijing \[CH1\]

\[CH\]

### Trade Policy

## 

## Export tax rebate to adjust downward

According to officials of the relevant financial and taxation
departments, there will an adjustment to the current export tax rebate
system because of pressure from surplus production capacity, WTO rules,
and anti-dumping conflicts. Exports based on high pollution and
energy/resource consumption are likely to be affected, including light
industry and the textile industry. The State Council is to announce the
detailed adjusted export tax rebate policy. (6/13/06, China Textile
News, WXP)

## China banns Djibouti imports of live poultry and poultry products

The Chinese Ministry of Agriculture (MOA) announced during a press
conference on June 12, 2006, its intention to ban imports of live
poultry and poultry products from Djibouti due to a local outbreak of
highly pathogenic avian influenza (HPAI). (Farmers' Daily, 6/13/2006,
ZJP)

### 

### Agriculture/Commodities

Seed companies to be segregated from administration agencies by the end
of June 2007

On May 19, 2006, China's State Council issued a circular "Suggestions on
Reform of Seed Management and Marketing System". The circular requested
that all seed companies/traders be completely segregated from the
agricultural administrative agencies by the end of June 2006. The
purpose is to set up a level playing field for all seed
companies/traders and strengthen the monitoring and supervision of the
seed market. (6/10/06, Farmer's Daily, WXP)

## 

## China loses \$9 billion annually in agricultural exports due to technical barriers

China exported \$27.2 billion worth of agricultural products in 2005, up
17.7% from the previous year. More than 90% of Chinese food and
agricultural export enterprises experienced foreign technical barriers
to trade (TBT). It is estimated that TBT measures would result in about
\$US 9 billion loss for China's agricultural exports each year. The
problem is that China's testing standards are not in harmony with
international criteria. Since the food safety regulatory system is
incomplete, China has fewer testing standards and some standards lower
and outdated as compared to international standards. (Consumption Daily,
6/13/06, WBG)

## 2005/06 Sugar production down to 8.82 MMT 

The 2005/06 sugar production season has ended and the total production
was 8.82 million metric tons (MMT), down 3.9% from the previous season.
Dry weather in Hainan and Yunnan provinces have caused the sugar cane
production to drop significantly. Additionally, sugar crop area was
reduced to 1.56 million hectares, down 5% from the previous year. (China
Food Newspaper, 6/13/06, WBG)

**Avian influenza (AI) outbreak troubles Tibet**

On May 26, 2006, during a regular bird flu surveillance, the Animal
Disease Monitor Bureau of Lasa City of the Tibet Autonomous Region
tested 3 dead wild geese presented by Dangxiong County. The diagnosis
showed that the geese were infected with H5 type of avian influenza. On
June 3, 2006, the China National AI Reference Laboratory isolated the
virus of highly pathogenic avian influenza (HPAI) H5N1. By June 8, 2006,
Lasa City found 28 dead wild migratory birds. According to the Ministry
of Agriculture (MOA), the number of dead migratory birds infected with
AI in Yushu County, Qinghai Province, has been increasing since April
23. By June 8, 2006, they found 495 dead migratory birds in total. MOA
also indicated that the number of dead migratory birds infected with AI
in Guoluo Autonomous Prefecture of Qinghai Province and in Naqu Area of
Tibet has also been increasing since May 21. By June 8, 2006, they found
a total of 440 and 1154 dead migratory birds respectively in the two
places. (MOA Notification, 6/9/2006, ZJP)

## China "School-Milk Program" picks up momentum

China started "School-Milk Program" in 2000. At present, the program has
covered 28 provinces, autonomous regions and municipalities directly
under the Central Government. By the end of 2005, there were over 10,000
primary or middle schools in over 60 large- medium sized cities carrying
out this program. Daily supplies of drinking milk have reached 2.43
million boxes, up 26 percent from 1.93 million boxes in 2004. (China
Food Newspaper, 6/15/2006, ZJP)

## Nationwide check-up on preexisting animal disease quarantine work begins

The Center of Disease Control of China (CDC) is organizing a nation-wide
check of animal disease quarantine on bird flu and food and mouth
disease (FMD). It has organized 31 groups to check quarantine work for
bird flu and FMD at 2,480 households with backyard farms, 186
large-scaled commercial farms and 62 slaughterhouses in 248 villages,
124 townships and 62 counties covering all 31 provinces, autonomous
regions and municipalities directly under the Central Government. The
monitoring locations will focus on areas bordering other countries, less
developed areas, mountainous areas, watersheds, frequent marketing
places for live animal and poultry, developed transportation areas, and
those regions with prior bird flu or FMD outbreaks. The program is
targeted to collect 7,750 samples from rural animal and poultry farms.
(Farmers' Daily, 6/14/2006, ZJP)

## Dalian scrutiny of imported beef

In response to the "Urgent Request on Seriously Fighting Against
Smuggling and Marketing Beef Products from BSE Countries" issued by the
Chinese quarantine authority, AQSIQ, six government agencies in Dalian
city jointly started a campaign to monitor the local beef market. It
checked 14 high-end hotels, Western and Japanese restaurants and one
large supermarket. About 34 kg of beef were intercepted at four
locations, which purportedly carry imports from Canada, the United
States and other BSE associated countries. (China Food Newspaper,
6/15/2005, ZJP)

## Expected low prices for meat, chicken and eggs in 2006 second half

According to Li Yongqiang, Director of the Price Division, Rural
Department, of the China National Statistics Bureau, domestic prices for
meat, poultry and eggs from January to May have remained low on average,
except January due to traditional festivals. During this period, the
prices for live swine decreased 19.8 percent, the prices for live
chicken decreased 12.5 percent, and the prices for eggs decreased 11.9
percent over the same period of 2005. The low price trend is expected to
continue in the second half of the year. This is due to production
increase, import increase, and export frustration. (China Consumers'
Newspaper, 6/9/2006, ZJP)

## Avian Influenza outbreak ails Xinjiang 

The Ministry of Agriculture notified to all foreign diplomatic missions
in Beijing that there was an outbreak of highly pathogenic avian
influenza (HPAI) in Xinjiang Uygur Autonomous Region. On June 4, 2006,
during a regular bird flu surveillance, the General Animal Disease
Surveillance Station of the Xingjian Uygur Autonomous Region found 200
poultry dead on a household poultry farm at Tareshilike Village, Zhake
Township of Hetian Country. The farm had a total of 637 poultry. A
preliminary test indicated a suspected case of avian influenza (AI). On
June 7, 2006, the China National AI Reference Laboratory isolated HPAI
H5N1 from the materials presented by the autonomous region. (MOA
Notification, 6/7/2006, ZJP)