CHINA: AGRICULTURAL PERFORMANCE IN 1981 AND PROSPECTS FOR 1982

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• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83B00227R000100230005-9
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 17
• Document Creation Date: December 20, 2016
• Document Release Date: March 2, 2007
• Sequence Number: 5
• Publication Date: July 1, 1982
• Content Type: REPORT

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Directorate of on 1 ential
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PR
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Prospects for 1982
China: Agricultural
Performance in 1981 and
Confidential
EA 82-10068
GI 82-10146
July 1982
Copy 408
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Directorate of Confidential
Intelligence
China: Agricultural
Performance in 1981 and
Prospects for 1982
An Intelligence Assessment
This assessment was prepared b
Office of East Asian Analysis, an
Office of Global Issues. Comments and queries are
welcome and may be directed to the C ' Domestic
Policy Branch, OEA,
This report was coordinated with the National
Intelligence Council.
0
Confidential
EA 82-10068
GI 82-10146
July 1982
25
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China: Agricultural
Performance in 1981 and
Prospects for 1982F_
Key Judgments Production increased in nearly all sectors of Chinese agriculture during
1981 due to the continuation of national policies giving peasants more
freedom to make production and marketing decisions and linking income
more closely to personal production. Supplies of fertilizer and other
agricultural inputs remained at the same levels or lower than in 1980;
weather was normal in most of China. In 1981:
? The grain harvest was 325 million tons,' up 1.4 percent over the previous
year despite a 2.3-percent decline in the area sown to grain. The good
harvest kept per capita grain availability at near-record levels.
? Industrial crops posted new records as higher procurement prices led to
expanded acreage.
? Improved harvests increased domestic supplies of oilseeds and cotton and
led to cutbacks in imports of these commodities.
? Grain imports slipped 0.5 million tons to 13.2 million tons. For the second
straight year the United States supplied about 60 percent of China's
imported grain. The sales represented 13 percent of the 98.5 million tons
of wheat and corn exported from the United States during the year.
We do not expect to see major changes in agricultural policies, production,
or trade during 1982. China should approach, but probably will not attain,
the 1982 grain production target of 333.5 million tons, which is slightly
above the record harvest of 1979. We expect industrial crops to continue to
increase. We estimate that grain imports will remain about the same as the
last two years while cotton and sbean imports are likely to continue their
downward trend.F- -1
The United States will remain China's principal grain supplier in 1982. We
estimate that US shipments of wheat and corn will total 8.1 million tons of
the roughly 14 million tons China will purchase this year. US sales of
cotton and soybeans are likely to continue their downward trend and we ex-
pect no sales of US soybean oil during 1982. Prospects for exports of US
wood and wood products remain bright, however
Information available as of 15 June 1982 has been used in
the preparation of this report.
Confidential
EA 82-10068
GI 82-10146
July 1982
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Figure 1
China: 1981 Grain Harvest
(as compared to 1980)
a 1981 grain output for Tianjin
Municipality not reported
u
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Prospects for 1982
China: Agricultural
Performance in 1981 and
Overall Trends in 1981
China's agricultural production rose 5.7 percent in
1981 to 231 billion yuan, 1.8 percent above the state
plan.' Most of the increase came from farm crops,
although rural industrial activity and animal hus-
bandry and fishery output grew at faster rates (see
table 1).I
Relaxed state restrictions on production and more
material incentives continued to dominate policy
changes in 1981 and, we believe, were responsible for
much of the increase. These official policy changes,
which began in 1979 and continued last year, include:
? Greater latitude for peasants to decide what they
want to plant or produce.
? Implementation of responsibility systems where ac-
counting units are small and peasants are paid
according to their production. By the end of 1981,
Chinese press reports indicated that over 90 percent
of the nation's work teams had adopted some type of
responsibility system, with half adopting the house-
hold as the basic accounting unit.
? Increases in purchase prices to stimulate production
of desired goods and to raise peasant incomes. In
1981 the Chinese increased government prices for a
number of major crops including soybeans, tobacco,
and vegetables.
? The reduction of state production quotas and taxes.
? Greater freedom for peasants to engage in private
production and marketing activities by increasing
the size of private plots, allowing more individual
sideline industry, and expanding rural free markets.
1981 Value a Percent
(in billion yuan) Growth
From 1980
231.2 6
148.9 5
33.1
9.5
These policies helped boost peasant per capita income
16.8 percent to 223 yuan in 1981, according to
Chinese statements. In contrast, average urban wages
were 463 yuan last year, but rose only 4.3 percent.
Increased peasant demand for better housing and
consumer goods naturally followed. Rural housing
construction rose 20 percent last year and rural
savings nationwide rose 29 percent, partially because
of a shortage of desired consumer goods.)
A 5.9-percent increase in the state purchasing price
index was responsible for some of last year's increase
in production value.' This was less than the purchase
price increases during 1979 and 1980, however when
the index rose 15 and 7 percent, respectively.II
Agricultural inputs stagnated in 1981 as most of the
increase in state funds for agriculture went toward
increasing purchase prices. As Chinese statistics in
table 2 illustrate, rates of growth for nearly every
' Procurement prices for all grains except soybeans remained
constant last year. Grain Crops make up the majority of the value of
agricultural production.
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Chemical fertilizer a
12.39 million metric tons
22.6
15.7
0
Nitrogen
9.86 million metric tons
15.5
13.3
-1.3
Phosphate
2.51 million metric tons
75.9
26.9
8.7
Potash
20,000 metric tons
-23.8
25.0
0
Chemical insecticides
484,000 metric tons
0.8
0
-9.9
Conventional tractors
53,000 units
10.5
-22.2
-45.9
Hand tractors
199,000 units
-1.9
-31.4
-8.7
Gunny bags
429 million units
18.6
25.9
4.4
Conventional tractors
792,000 units
19.7
11.7
6.3
Hand tractors
2 million units
21.7
12.2
8.7
Irrigation pumps
75 million horsepower
8.6
4.8
0.5
Chemical fertilizer a
13.3 million metric tons
19.0
18.4
5.2
a Based on 100-percent effectiveness.
major input have declined for the past two years. Last
year the output of nitrogen fertilizer fell for the first
time since 1976, although the state plan for total
fertilizer production was still met. We believe the
growing demand for agricultural inputs will continue
to outpace their supply, particularly as peasants put
more personal income into their own production. For
example, Chinese reports show that by the end of
1981 over 300,000 individuals had purchased their
own tractors
Grain Crops
China announced that in 1981 it harvested its second-
largest grain crop totaling 325 million tons. This was
an increase of 1.4 percent above the 1980 figure and,
coupled with grain imports, kept grain availability at
the high level (by Chinese standards) of 325 kilograms
per person (see table 3).
The small increase in grain production was achieved
despite a 2.7-million-hectare decline in the area sown
to grain. This is a continuation of a trend started in
1979 when the prices of industrial crops were raised
more than grain prices. At the same time, peasants
have received greater latitude in making their own
planting decisions. Table 4 shows the decline in grain
area from 1978 to 1981.
Weather was near normal for crops during 1981,
although some areas, as usual, were hit with serious
adverse weather. The North China Plain was dry
during the winter, and spring rains came later than
normal. Too much rain was a more common problem
last year, as the Northeast, South-Central, and North
China Plain had isolated flooding (see figure 1). The
Chinese estimate that flooding in Heilongjiang, Si-
chuan, and Shaanxi caused total losses of 5.5 million
tons of grain, and heavy rains and typhoons contribut-
ed to a 1.3-million-ton decline in Guangdong's grain
output.
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China: Grain Supply, Production, and Trade a
Year
Per Capita Availability
(kilograms)
Total Supply b
Domestic
Production
Trade
1952
280
159.8
160.2
-0.36
0.02
0.38
1957
295
189.4
190.7
-1.34
0.14
1.48
1965
270
199.0
194.5
4.50
6.02
1.52
1970
287
243.1
240.0
3.11
4.63
1.52
1971
289
251.8
250.1
1.66
3.13
1.47
1972
273
243.6
240.5
3.12
4.64
1.52
1973
296
270.2
264.9
5.32
7.90
2.58
1974
301
280.3
275.3
4.98
7.41
2.43
1975
301
286.0
284.5
1.54
3.50
1.96
1976
297
287.0
286.3
0.69
2.09
1.40
1977
294
288.9
282.7
6.22
7.30
1.08
1978
314
313.0
304.8
8.15
9.55
1.40
1979
338
342.1
332.1
10.04
11.42
1.38
1980
325
333.8
320.5
13.29
14.48
1.19
1981
325
338.2
325.0
13.15
13.95
0.80
a Million metric tons unless stated otherwise.
b Assuming no change in grain stocks.
c Includes soybean for consumption comparisons. Soybeans are not
included in other grain import figures.
Increased wheat production, according to Chinese
reports, was responsible for nearly half of the rise in
grain production last year (see table 5). Growing
conditions improved after the initial dry weather and,
coupled with the greater care for the fields fostered by
the peasant responsibility systems, yields rose more
than enough to offset the smaller sown area. Winter
wheat, which accounts for 85 percent of the wheat
harvest, made up all of the increase in production.
Spring wheat, grown in the Northeast and North,
probably failed to increase because of the extremely
wet weather in the Northeast
Rice harvests rose to near the 1979 record of 144
million tons, according to Chinese reports. The early
rice crop, harvested in July, accounted for 1.5 million
tons of the increase despite a 400,000-hectare decline
in sown area. Both the area and output of intermedi-
ate and late rice probably increased, with good har-
vests except in south China where fields were hit with
cool weather and heavy rains.
Production of potatoes, consisting mostly of sweet
potatoes, declined the most. We believe a slight
reduction in sown area probably occurred as fields
were shifted to oilseeds and cotton, but poor weather
in the main producing regions was the main cause.
Shandong, which produces 20 percent of the nation's
potatoes, had dry weather during the spring planting
season as well as during much of the growing season.
Also, flooding and heavy rains may have contributed
to a decline in Sichuan, which roduces another 20
percent of the nation's crop.
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Year Million Hectares Percent Change From
Previous Year
1979
119.3
-1.1
1980
116.6
-2.3
1981
113.9
-2.3
a For comparability, tubers are converted to grain by the weight ratio
of 5 to 1.
Beijing reported the output of miscellaneous coarse
grains, mainly corn, at close to the 1980 level. Again,
dry weather during planting in the North China Plain
and excessive moisture in the Northeast combined to
limit production. Soybeans was one of the few crops
whose procurement price was increased last year; thus
sown area rose and the crop was better cared for.
In the State Statistical Bureau announcement of 1981
results, grain production for 1980 was revised upward
from 318.2 million to 320.5 million tons. We believe
all of the change occurred in the miscellaneous grains
category, which would raise 1980 production to 91.3
million tons. The Chinese report little information on
their late-harvested crops and miscellaneous grains
are not reported by individual crops in the annual
production statistics. It is possible that the revision
was made because of information received after the
initial 1980 claims were reported. Beijing is making
efforts to improve its statistical reporting system.
Early Chinese estimates for the 1981 harvest were
very close to the final figure of 325 million tons,
whereas large upward revisions in the final output
figures have been common in the past.
Industrial Crops
For the second straight year, the highlight of agricul-
tural production in 1981 was the achievement of
record harvests for nearly all industrial crops. Since
1979, increased procurement prices, more freedom for
peasants to plant the crops they wish, and concentra-
tion of industrial crops in areas most suited for their
production have combined to boost industrial crop
production.
Rice
Wheat
Potatoes a
Soybeans
Miscellaneous
Oilseed production, the Chinese reported, rose by
almost one-third to 10.2 million tons last year, a new
record. Rapeseed accounted for most of the increase;
the rapeseed harvest was up 70.5 percent due mainly
to a 40-percent expansion in acreage. Other oilseeds
also increased substantially because of expanded sown
areas (see table 6).
We estimate that the rapid expansion of edible oil
production in the past four years has made China self-
sufficient in oils and has taken it out of the US
market for soybean oil.
332.1
320.5
325.0
143.8
139.3
143.2
62.7
54.2
58.5
28.5
27.8
25.0
7.5
7.9
9.2
89.7
91.3
89.1
Expanded acreage in north China because of higher
procurement prices and more favorable weather in
central China helped cotton production set a record
for the second straight year, rising to nearly 3 million
tons. Total sown area was reported by the Chinese to
have increased 220,000 hectares to over 5.1 million
hectares, the largest area in over 20 years, even
though Beijing had planned a 150,000-hectare decline
in sown area. Shandong, after increasing production
222 percent in 1980 to 537,000 tons, continued to
expand sown area and, according to official Chinese
statistics, reportedly produced over 680,000 tons last
year. Preliminary reports from Jiangsu indicate the
province raised output 20 percent to over 500,000
tons. Henan and Hebei were the only major cotton-
producing provinces reporting a decline in output last
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Thousand Metric
Tons
Percent Change From
Previous Year
1980 1981
1980 1981
Total oil crops
7,691 10,205
19.5 32.7
Of which:
Peanuts
3,600 3,826
27.6 6.3
year, with the output in both provinces second only to
1980 production.
We believe the increased cotton supply has allowed
the Chinese to carry through with their plans to
provide more cloth domestically and reduce cotton
imports.' As with oilseeds, China's reduced purchases
have come mostly at the expense of US sales.
The increased production of other major industrial
crops is shown in appendix 1.1
We believe, however, that the policies designed to
promote industrial crop production have worked too
well in some cases. Last year's tobacco harvest most
clearly illustrates Beijing's problems in moving from a
command economy toward a market-oriented one.
After two years of declines in tobacco acreage and
production-forcing expensive imports to try and
satisfy domestic demand-in 1981 prices were raised
as an incentive to increase output. As a result, tobacco
acreage increased nearly 50 percent and procurement
rose roughly 80 percent. Last year China reported it
may have produced as much as 250,000 tons more
than needed to satisfy the country's cigarette produc-
tion capacity. Jute and ambary hemp production also
exceeded domestic requirements by 250,000 tons.
followup care will be given.
Forestry
Timber production was reported by the Chinese to
have continued to decline in 1981, falling 8 percent to
49.4 million cubic meters. China is chronically short
of timber resources and last year drafted policies both
to increase tree planting and to reduce the amount of
timber cut. In the past, mass afforestation projects
were undertaken only to have many of the trees die
because of a lack of followup care. Peasants were only
assigned certain areas or numbers of trees to plant
with little or no control over cultivation. A policy put
into effect last year, however, gives ownership of the
trees outside state forests to the individual or collec-
tive planting them. In many cases peasants have been
assigned areas to plant trees with the hope that more
To improve state-owned forest resources, the State
Council announced a "voluntary" tree planting cam-
paign later in the year. The plan calls for all able-
11 and 55 to plant three to five trees annually. These
trees will belong to the state, and government organi-
zations at the county level and above are being
established to carry out the plan.
Beijing also announced in 1981 that the amount of
timber cut would be reduced by a total of 10 percent
for the next four years. To try and keep pace with the
growing demand for timber, imports have risen. Im-
ports of lumber and pulp continued to grow in 1981,
after tripling in 1980, followin China's lowering of
import duties on timber.
Shipments from the United States have accounted for
most of the increase in the last two years, and the
United States has been China's largest supplier of
wood and pulp since 1980. We believe there are bright
prospects for increased US sales of timber to China:
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Thousand Metric Percent Change
Tons From Previous
Year
1980
Policies allowing more private production of livestock,
however, have had an adverse impact on the raising of
pigs. Widespread adoption of the responsibility sys-
tems last year transferred the raising of livestock to
individual households; by late 1981, Beijing claimed
that over 90 percent of the nation's swine were being
raised by individual households. In many cases bonus-
es for growing pigs, including the allocation of grain
and fodder grain plots, were not given to individual
households but only to collectives. Thus household
hog production became unprofitable last year, espe-
cially when the pork was marketed through state
channels. Also, the shift created a shortage of piglets,
as fewer hogs were bred in large collective operations.
Chinese press reports reveal that authorities in many
areas reacted to the declining pork supplies by rein-
stating production quotas and rationing and by ex-
horting peasants to market their hogs through state
channels. We expect little improvement in pork sup-
Freshwater products 1,238
Meat production
Pork 11,341 11,884 13.3 4.8
Beef 269 249 17.0 -7.4
Mutton 445 476 17.1 7.0
Total livestock 12,055 12,609 13.5 4.6
products
Yearend herd size Thousand Head Percent Change
Hogs 305,431 293,702 -4.5 -3.8
Large animals
Sheep and goats
Total livestock
plies, however, unless local officials also follow state
exhortations to provide bonuses to individuals.
The category of freshwater aquatic products made a
large gain in supplies during the year and continued to
increase its share of total fishery output. Marine
production lagged as additional efforts were made to
orotect the overharvested breeding grounds.
Trade
China's grain imports fell slightly in 1981 to 13.2
We think that China's emphasis on forestry in the million tons (see figure 2). The United States re-
past year comes not only from the shortages of lumber mained the dominant supplier for the third straight
but also from concern over soil and water conserva- year, with total sales roughly equal to the 1980 level.
tion. Deforestation of China is partially responsible Last year was the first year of the Sino-US long-term
for increased erosion and changes in the climate. In grain agreement (LTA) which calls for yearly sales of
the last two years, serious flooding has occurred in at least 6 million tons with 15 to 20 percent in corn
and downstream from areas stripped of their trees. and the rest in wheat. While the total sales amount
95,246
187,311
587,988
97,641
187,730
579,073
0.7
2.3
-1.6
2.5
0.2
-1.5
Livestock and Fisheries
China reported that its meat supplies improved slight-
ly during 1981 as growth slowed in both the livestock
and fishing industries (see table 7). The production of
pork, China's main source of meat, grew nearly 5
percent but was accompanied by a decline in both the
number of hogs slaughtered and the size of the herd at
yearend. Increases in peasant incomes encouraged
peasants to finish ho s to heavier weights and con-
sume more pork
468,000 tons, of total Chinese purchases.
Canada remained China's second-largest source of
grain, with total sales of wheat and barley totaling 3.1
million tons. Sales were boosted by favorable ex-
change rates and ample Canadian harvests. With the
sharp rise in interest rates last year,
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Figure 2
China: Imports of Grain, by Source
Million Metric Tons
?i United States
Canada
Australia
Argentina
[-~ France
F-I Other
China began paying cash for Canadian
purchases rather than using the credit arrangements
provided in the Sino-Canadian LTA. credit
The Chinese also began paying cash for Australian
grain last year. Total purchases in 1981 dropped to
1.2 million tons, the last year of a three-year LTA
calling for annual sales of 2.0-2.5 million metric tons.
A new LTA was signed in November providing for
annual sales of 1.5-2.5 million tons through 1984 (see
table 8).
Argentine exports dropped to 126,000 tons last year.
Most of Argentina's available grain went to the
USSR, leaving less available than the 1 million tons
called for in the LTA. This also resulted in relative
high Argentine Grain prices vis-a-vis US nrices.~
Last year was also the first full year of France's LTA
with China. French grain is marketed through the
EC, which gives grain exports a subsidy and favorable
financing. EC shipments in 1981 totaled slightly over
500,000 tons including small shipments from West
Germany.
Rising domestic harvests cut China's imports of in-
dustrial crops in 1981, with much of the reduction
coming in purchases from the United States. Imports
of US cotton last year fell to 246,000 tons, roughly
one-half the level of the record sales in 1980. Total
Chinese cotton imports last year only fell an estimated
20 percent to 570,000 tons, however, as the Chinese
moved away from US purchases. With ample supplies
of cotton worldwide the Chinese increased purchases
from Third World countries; supplies there were
generally cheaper and probabl benefited Chinese
relations with other LDCs.II
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Chinese Long-Term Grain Agreements
Country
Annual Amount
Million Metric
Tons a
Duration
Argentina
1.0 to 1.5
January 1981-December 1984
Australia
2.0 to 2.5
December 1978-November 1981
1.5 to 2.5
January 1982-December 1984
Canada
2.8 to 3.5
August 1979-July 1982
3.5 to 4.2
August 1982-July 1985
France
0.5 to 0.7
September 1980-May 1983
United
States
6.0 to 8.0
January 1981-December 1984
a China and the exporting country negotiate actual sales every six to
12 months of the agreement.
In October Beijing suspended all new orders for US
cotton following US restrictions on imports of two
categories of Chinese textiles. Traders have been told
the cutoff is also linked with China's displeasure over
the Taiwan arms issue. Although the textile and arms
issues contributed to the cutoff, we believe the rela-
tively high price of US cotton was probably a bigger
factor. The record domestic production of cotton and
synthetic fibers, softening demand for textile exports,
and ample world cotton supplies allowed the Chinese
to cut off US purchases and apply pressure to US
textile negotiators. Since October China has pur-
chased only small quantities of US cotton to fill out
existing shipments. Meanwhile, we believe the United
States may suffer some long-term damage in the
China cotton market as other cotton-producing coun-
tries expand production to supply China and begin to
sign long-term supply agreements with the Chinese.
China's purchases of US soybeans and soybean oil
were also affected by rising domestic harvests. Pur-
chases of US soybeans fell 22 percent to 473,000 tons.
'China's record edible oil harvests have taken it com-
pletely out of the US soybean oil market; no sizable
oil deliveries have occurred since February 1981.
Outlook
Policy. We expect no major policy changes during the
coming year. Reporting from open source material
indicates Beijing is evaluating the effects of the
policies of the past three years, drawing clearer lines
as to what is acceptable activity under the new
policies, and tightening central control over agricul-
tural activity. The use of strong material incentives
over the pastthree years has not only helped increase
agricultural productivity but also produced numerous
ideological and administrative problems for the lead-
ership. Although the basic policy line does not seem to
be in danger, Deng's chosen successors, including
Zhao Ziyang, have invested much of their political
capital in these agrarian reforms.
Some of the problems that have surfaced recently
include:
? Free enterprise has gone so far in some areas that
the system no longer appears to be socialist.
? Birth rates have been on the rise in many areas
because of lax state control and the peasants' desire
for sons to help till the land.
? Increased peasant income has led to difficulty in
military recruiting.
? Higher procurement prices have contributed to bud-
get deficits and inflation.
? Direct state control over production has weakened;
press reports indicate that peasants are reluctant to
follow state directives and the orders of local cadre.
Even though it appears generally pleased with the new
systems, recent Central Committee guidelines indi-
cate Beijing is taking some steps to correct these
problems. The leadership realizes that a reversion to
excessive state control would not set well with China's
800 million peasants. Some leaders, including Hu
Yaobang, would like to continue loosening restric-
tions. Official announcements have made it clear,
however, that if current corrective measures prove
disappointing, it may be necessary to limit the more
liberal systems.
We believe the leadership's recent attempts to present
the current policies as firmly adopted and as part of
long-term plans are mainly aimed at overcoming the
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reluctance of local officials to implement them. In the
past, cadre and peasants have been caught in a
turbulence of policy change, following orders one year
only to be dis raced the next as political winds
shifted
Crops. The Chinese have announced a grain produc-
tion target of 333.5 million tons for 1982, slightly
above the record harvest of 1979 and 2.6 percent
above the 1981 level. The summer harvest, which
makes up nearly 20 percent of the total grain crop,
consists mainly of winter wheat and was completed by
mid-June. It declined slightly from the 1981 level of
60 million tons. Dry weather in the North China
Plain and a slight reduction in sown area were
responsible for the decline, although the Chinese
reported better harvests in the Northwest, Southwest,
and Changjiang Valley
Transplanting of the early rice crop in south China
was completed on schedule for the harvest in mid-to-
late July. Light rains in late April also benefited
growing crops in south China and aided in prepara-
tion for sowing fall-harvested crops in north China.
The Northeast, which suffered from waterlogging last
fall, appears to have sown fall-harvested crops without
major difficulties.
We believe the 1982 harvest will likely fall short of
the goal of 333.5 million tons. While a slight decline
in the area sown to grain is expected this year,
Beijing's insistence on stabilizing the grain area is
expected to slow the shift toward industrial crops.
A large shortfall in China's grain production is, in our
estimation, very unlikely. Variation in China's grain
production is comparatively small because of China's
diversity of crops and cropping seasons and the ability
to hand plant crops with shorter growing seasons after
disasters occur. If a significant shortfall in food
production were to occur, however, we expect that the
Chinese would respond in several ways:
? State deliveries of grain for human and animal
consumption would be cut back. Little would be
gained from cutbacks in animal feeding, however, as
only a small portion of the nation's grain is normally
consumed by livestock.
? State grain reserves would be tapped.
? Imports of grain would increase, but transport
constraints would allow only an additional increase
of 2-3 million tons.)
Trade
We expect little change in China's grain trade for
1982. Total grain imports could rise slightly to the
1980 level of near 14 million tons, with the United
States maintaining its role as the dominant supplier.
We believe total US grain sales should be near the
1981 level of 8.1 million tons, but with a larger
percentage of corn than in the past. Shipments and
outstanding sales for the first half of 1982 are 12-
percent corn, close to the LTA minimum requirement
of 15 percent and well above last year's level of 6
percent.)
We expect shipments from Canada this year will also
roughly equal last year's level of 3.1 million tons. On
5 May 1982 Canada announced the signing of a new
LTA with China to ship between 10.5 million and
12.6 million tons of wheat over the three years
beginning in August 1982. This will increase Cana-
da's annual August-July shipments from the 2.8-3.5-
million-ton range to 3.5-4.2 million tons. Canadian
sales to China will again reach the levels attained
during 1977 and 1978-before the United States
became China's main wheat supplier.
We expect Australian grain shipments this year will
show the greatest changes from last year's level. A
sale of 1 million tons announced in late March 1982
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brings total commitments to 2.2 million tons for 1982,
nearly le the 1.15 million tons shipped in 1981.
We expect expanding domestic production of both
cotton and synthetic fibers and a softening in demand
for export textiles will again combine to lower cotton
imports in 1982. The total amount and sources of
China's cotton imports for the coming year will
depend on domestic and foreign harvests as well as the
resolution of the issues arising in US trade discussed
earlier
The Chinese are continuing efforts to expand soybean
production and, barring poor domestic production,
imports should again show some downward move-
ment. We do not expect the Chinese to purchase US
soybean oil in 1982
Confidential 10
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Confidential
Appendix A
Production of Selected Agricultural Products
Amount
Percent Change From Previous Year a
Average Annual Increase
1957
1979
1980
1981
1958-78
1979
1980
1981
Grain (million metric tons) b
190.7
332.1
320.5
325.0
2.1
9.0
-3.5
1.4
Cotton (million metric tons)
1.6
2.2
2.7
3.0
1.3
1.8
22.7
9.6
Oil-bearing crops (million metric tons)
4.2
6.4
7.7
10.2
1.0
23.3
19.5
32.7
Sugarcane (million metric tons)
10.4
21.5
22.8
29.7
3.4
1.9
6.0
30.1
Sugar beets (million metric tons)
1.5
3.1
6.3
6.4
2.8
15.0
103.0
0.9
Jute, ambary hemp (million metric tons)
0.3
1.1
1.1
1.3
6.3
0.1
0.8
14.8
Silk cocoons (thousand metric tons)
112.5
271.0
326.0
311.0
3.4
18.9
20.3
-4.6
Tea (thousand metric tons)
111.5
277.0
304.0
343.0
4.3
3.4
9.7
12.8
Aquatic products (million metric tons)
3.1
4.3
4.5
4.6
1.9
-7.5
4.5
2.4
Hogs (million head at yearend)
127.8
319.7
305.4
293.7
4.2
6.1
-4.5
-3.8
Sheep and goats (million head at yearend)
98.6
183.1
187.3
187.7
2.6
7.8
2.3
0.2
Large animals (million head at yearend)
83.5
94.6
95.2
97.6
0.6
0.7
0.7
2.5
Gross value of agricultural output
(billion 1970 yuan)
79.3
158.4
162.7
172.0
2.9
8.6
2.7
5.7
Population (million persons at midyear)
641.7
1,012.2
1,027.0
1,041.5
2.1
1.5
1.5
1.4
a Based on unrounded numbers.
b Includes potatoes converted on a grain equivalent basis of 5 to 1.
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Confidential