China will spend 26 billion yuan ($3.81 billion) over the next five years to boost grain output in Jilin, its largest corn producing province, by 20 percent to help meet rising demand, the governor of Jilin said on Thursday. The north-eastern province aims to increase grains output by 5 million tonnes to 30 million tonnes, Han Changfu, the governor, said at a press conference.
It targets a 3 million tonne increase in corn output and 2 million tonnes in rice. An expansion in the province's corn processing industries has already reduced supply to feed mills and other consumers in the south, which used to rely on Jilin for feed grain supply.
"How to ensure grain security and enough food for 1.3 billion people has become the most important issue in the country's economic development given the population increase and more industrialisation and urbanisation," Han told the conference. Jilin will use the investment, which includes bank loans, to cultivate extra land and improve low-yielding land and irrigation system.
It would not build any new processing plants which turn corn into a range of chemical products, but would encourage more use by local feed mills and food processors, Han said. Jilin's processing industries consume 8 million tonnes of corn a year, or about 40 percent of its corn output. Major corn processor Global Bio-chem Technology Group Co Ltd is based in Jilin.
The province, once the largest corn exporter, now exports more value-added food products and meat, rather than grains, said vice governor Wang Shouchen. Beijing has not issued any corn export quotas this year despite an expected bumper harvest. Increasing output in Jilin will help China, the world's second-largest producer and consumer, stave off corn imports, particularly after world corn prices hit a record high this year on fears of tight supplies thanks in part to the biofuel boom in the US.