A senior Chinese official for agriculture recognized today that the situation for maintaining the stable development of agriculture and the growth of farmers' income was "unusually complicated and severe."

At a press conference in Beijing during the annual session of the National People's Congress, Wei Chao'an, Vice Minister of Agriculture, illustrated the challenges posed by the financial crisis.

Prices of agricultural products will continue on a downward movement which began in September 2008, and will squeeze farmers' income. The excessive supply on the international market will be made even more evident because of the global increase in major crops output, less consumption in bio-fuel amid oil price plunge, and withdrawal of international investment.

The hard time for labor-intensive small and medium sized enterprises in more developed coastal areas is draining jobs away. Recent surveys by the Agriculture Ministry show that some 10 percent of migrant workers have returned to their hometowns after they lost their jobs. The problem is likely to be even more serious in May or June this year.

Exports of agricultural products with competitive advantages have slowed down. In 2008, the value of exports of vegetables, fruits, livestock products and aquatic products all grew slower than that in 2007. Exports of apple juice were down both in value and volume for the first time.

There is mounting pressure on township enterprises and the industry of agri-products processing. Township enterprises relying on European and US markets have seen the value of their orders and deliveries shrink notably since the second half of 2008.

According to statistics from the Agriculture Ministry, township enterprises delivered 265 billion yuan of exports a month on average in the fourth quarter of last year, 8.9 percent below the monthly average for the whole year. The export delivery for the whole year stood at 3490 billion yuan, up by 11.4 percent over that of 2007 but the growth rate is 7.46 percentage points lower than that in 2007.

(People's Daily Online March 13, 2009