07:11 19/03/2010
China Worries About Snow's Impact on Food Supply

BEIJING - A top agriculture official warned Thursday that snow battering central China has dealt an "extremely serious" blow to winter crops, raising the likelihood of future shortages driving already surging inflation.

Regions hit by the worst winter storms in 50 years provide the bulk of China's winter fruit and vegetable production, Chen Xiwen, deputy director of the Communist Party's leading financial team, told reporters.

The full magnitude of the losses was unclear and much depended on the weather, he said.

"The impact of the snow disaster in southern China on winter crop production is extremely serious," Chen said. "The impact on fresh vegetables and on fruit in some places has been catastrophic."

Two weeks of near continuous snow and ice storms have paralyzed much of central and eastern China, stopping traffic, wrecking crops and killing dozens in road accidents and collapsed buildings.

Chen said the overall effect on agriculture depended on how long the storms lasted and whether they moved into northern China, which produces most of the country's wheat and oil crops.

"If it heads northward, then the impact on the whole year's grain production will be noticeable," Chen said.

Cabinet and party officials have ordered plans into place to deal with an emergency, he said.

Chen gave no figures on economic losses, although the Civil Affairs Ministry put the figure at 22 billion yuan ($3 billion) since the storms began January 10. Along with crops, fish and poultry farms have also been hard hit, and much industrial production is at a standstill.

Transport delays have already driven up vegetable prices nationwide, with those in the hardest hit areas more than doubling. Wholesalers in Beijing were quoted as saying only about 20 percent of the usual supplies of fresh vegetables were reaching the city.

Chinese cuisine places an emphasis on fresh produce, much of which is now grown in plastic-sheeted greenhouses that have buckled and collapsed under the snow.

In the central city of Zhengzhou, tomatoes had doubled in price since before the storms hit, local media reported. Lamb and other meat prices soared in the southern transport and manufacturing hub of Guangzhou, and in nearby Shenzhen, the cost of 47 types of vegetables had risen by an average of 36 percent, the reports said.

Fuel prices have also increased, with anthracite coal for household heating rising by 75 percent to 1,500 yuan ($208) per ton from before the snow.

Authorities have ordered a priority given to coal and food shipments, with all tolls, fees and restrictions waived. On the tropical island province of Hainan, transport bottlenecks maxed out refrigeration capacity, with large amounts of fruit and vegetables at risk of simply being left to rot.

Food shortages complicate Beijing's struggle to lower inflation by increasing supplies, a task the government has made a top economic and political priority.

Double-digit increases in food prices for much of last year drove December's inflation rate to 6.5 percent.

The weather crisis overshadowed essentially good news for China's farmers in 2007, a bumper year when grain production rose 0.7 percent over the previous year to 501.5 million tons.

Farmers' per capita annual incomes hit a record high of 4,140 yuan ($575), up more than 10 percent from the year before, although Chen warned they also suffered from rising consumer prices.

"The agriculture and rural economy has maintained good momentum," Chen said.

By Christopher Bodeen, The Associated Press

Moscow News №09F 2010 (18th of March, 2010)