Is growing grain actually worth it? High grain yields do not equal higher farmer incomes

“China's number one wheat county” welcomes a twelfth consecutive summer grain increase, yet a major grain county is not equal to a strong agricultural county, and high grain yields are not equal to higher farmer incomes. Even when grain is grown to the utmost, farmers' incomes are still not high, and Hua County is not content to accept this. Sharply raising grain prices is unrealistic; to both stabilize grain and increase income, Hua County is exploring a path to comprehensively upgrade agricultural industrialization.

1. Ordinary farmers: smallholders are still the main force; a year of farming equals just over a month of off-farm work

Li Ronghao's ledger

Cost per mu of wheat: 508 yuan

Cost per mu of corn: 450 yuan

Net income from 7.2 mu of land: 7,000 yuan

Hua County in Henan Province has 1.95 million mu of cultivated land, with more than 400,000 mu transferred through land circulation. 78% of the area is farmed by ordinary households, and 350,000 smallholders remain the main force in farming.

“This year the weather has been favorable and the harvest is good. Each mu of wheat yielded 1,200 jin.” said Li Ronghao, a farmer in Xixindu Village, Liugu Town, Hua County. Farmers in Hua County have an average of 1.5 mu of land per person. Li Ronghao is an average household in the village, with a total of 7 mu and 2 fen of land.

How much does a year of farming bring in? Old Li looked troubled: “The farm accounts are usually roughly the same and hard to calculate clearly. For example, the labor put into the fields over a year is definitely a cost. How much should that be counted as?”

“Then let's calculate it item by item.” Under the reporter's questioning, Li Ronghao began to work out his grain-growing accounts.

First, the input into farming. Counting on his fingers, Li Ronghao said that grain growing in Hua County generally consists of one season of wheat and one season of corn, with two harvests a year. For one mu of wheat, 20 jin of seed is used, at 2.8 yuan per jin; base fertilizer and topdressing cost 200 yuan, pesticides about 36 yuan, plowing and harvesting 180 yuan, and three rounds of irrigation 36 yuan. Added together, the input for one mu of wheat is 508 yuan. For corn, the input is not much different.

Next, calculate income. Li Ronghao said that in a normal year one mu of wheat yields 1,200 jin, which can be sold for 1.2 yuan per jin, and corn can also yield 1,200 jin, sold at 1 yuan per jin. In this way, the gross income from one mu of land is 2,600 yuan. Subtracting the farming expenses, the return per mu is 1,600 yuan. If labor is also deducted, the net income is 1,000 yuan.

In fact, in areas with two harvests a year, farmers generally accept a simple accounting method: including labor, the wheat season covers the cost, and the autumn season is pure profit. Li Ronghao's family has more than 7 mu of land and a net income of more than 7,000 yuan a year.

“Farming income still isn't enough. A year's income is only equivalent to one month of my son's work away from home.” Li Ronghao said that his son works in an anti-corrosion materials factory in another province, earning more than 7,000 yuan a month. Even so, the old couple are unwilling to transfer their land out. “Our ancestors farmed. With land there is a root. Besides, if we grow it ourselves, we eat it ourselves, and that feels secure.”

What worries Li Ronghao is that in recent years agricultural input prices have risen too fast. Take urea: two years ago a bag cost more than 90 yuan, but now it is about 120 yuan. Applying one bag of urea per mu costs 30 yuan more. Corn seed has risen by 5 to 10 yuan per mu, and pesticides and agricultural diesel are likewise expensive. He said: “If grain prices were a bit stronger and agricultural input prices dropped a bit more, enthusiasm for growing grain would be higher.”

2. Large grain growers: returns depend on “extensive planting and thin margins”; hope to solve the land circulation problem

Yu Tongqin's ledger

Circulated land: 305 mu

Land circulation fee: 1,000 yuan per mu

Total annual return: 150,000 yuan

Yu Tongqin is a large grain grower in Huang Village, Baidaokou Town. These days his mood is like the plump kernels: “Last year wheat yielded 1,080 jin per mu, and this year it reached 1,216 jin. How could I not be happy?”

In 2004, Yu Tongqin gave up the chance to work away from home, determined to “dig” gold out of the land, so he returned to the village and contracted more than 130 mu of wasteland to grow grain. Today, the land he has circulated reaches 305 mu, and by signing orders with a seed company he mainly breeds improved wheat varieties.

Speaking of grain growing, Old Yu described the scale advantages of large growers: agricultural inputs are obtained more cheaply than by smallholders. When wheat harvest time comes, others pay 50 yuan per mu, but he can wait for harvesting teams to bid, ending up at 35 yuan per mu.

But compared with smallholders, large growers still spend more overall:

Yu Tongqin said that to circulate land now costs 1,000 jin of wheat per mu, and this market rate is becoming a bit hard to bear.

In addition, with more contracted land, manpower alone is not enough. Old Yu invested more than 100,000 yuan successively to purchase machinery including a combine harvester, a straw-returning machine, a tractor and a seeder. “Full mechanization of plowing, planting and harvesting makes the busy farming season easier.”

There is also constantly rising labor cost. “Irrigation requires hiring three or four people, and harvesting requires hiring seven or eight. In the past, one person cost 60 yuan a day and was easy to find; now even 100 yuan a day cannot get anyone.” Old Yu described the difficulties of grain growing.

Yu Tongqin admitted that the per-mu return for large growers is not necessarily very high. It relies on extensive planting and thin margins, with profit coming from volume. He did the accounts: based on 1,200 jin of wheat and 1,200 jin of corn per mu, after subtracting the land circulation fee and then deducting expenses such as seed, pesticides and chemical fertilizer, the net income from one mu of land in a year is only about 560 yuan. “A lot of money is spent without noticing, and what truly ends up in my pocket each year is less than 150,000 yuan.”

As a large grain grower like you, what difficulties do you have?

“If you want high income from grain growing, you need scale, but now the land circulation fee is 1,000 yuan per mu, and relying on grain growing is not worth it.” Old Yu is helpless about the constantly climbing land circulation fee.

“Also, land circulation is difficult.” Yu Tongqin said that once water, electricity and roads are improved, you can flip a switch to irrigate, and farming becomes easy and convenient, so quite a number of farmers are unwilling to transfer their land out. But where facilities are not matched, poor land cannot be transferred out either.

In Hua County, standard grain field renovation is advanced at a rate of 200,000 mu per year, while land circulation is far below this scale.