China's "Number 1 document" promises more subsidies: target prices, revenue insurance, marketing loans, etc. Few people realize the difficulty of implementing and evaluating subsidy programs. Whenever subsidies are made available, people become eager to report subsidized things to the government. Statistics become meaningless and any subsidy program has enormous overhead costs to collect and verify information to catch cheaters and to determine whether programs are working.
In 1995, China reported that it had 95 million hectares of cropland, the basis for the oft-cited statistics that China feeds 22 percent of the world's population on 7 percent of its farmland. In December 2013, the Ministry of Land Resources announced that its new and improved survey in 2008 (but not announced until five years later) found that China had 135 million hectares of cropland, 42-percent more than the 1995 total.
Wang Shiyuan, an official of the National Bureau of Statistics, explained that the statisticians knew all along that China had more cropland than they reported. The problem was that farmers and villages hid their land from authorities--including statisticians, apparently--when they had to pay taxes based on their land-holdings. During 2004-06 these taxes were phased out. Instead, authorities began giving subsidies based on land holdings or area planted in grain. Suddenly, land started appearing out of nowhere.
Some people might have thought that finding more land means that China's grain output might be larger than had been reported. But Statistician Wang patiently explained that this was not the case. The statisticians at NBS, you see, knew that the country had more land than they published in their books. Mr. Wang said statisticians made adjustments to their sown area statistics and that "most" of the newly-found cropland is already incorporated into grain production statistics. The much ballyhooed ten-straight increases in grain output since 2004 is said to be a result of China's grain subsidies. But the increase could be a statistical illusion--land that used to be hidden is now included in statistics. Voila! more grain production.
Many of China's statistics are based on reports filed by farms and local officials and passed up the chain. The shortfalls of this system are revealed in a training meeting on information reporting for officials in charge of model livestock farms held in November 2013. Model farms are one of the Ministry of Agriculture's main strategies for disseminating new techniques--they get subsidies to "demonstrate" how modern "standardized" farms should be run. At the training, a Ministry official told the gathering that they had found much of the data transmitted to them by the model farms was inaccurate and/or late. The official stressed the importance of getting correct, timely, and complete information to assess the programs. Application guidelines for a "tourism model livestock farm" program in Qingdao warn applicants that they will be banned from the program for two years if they are found to have reported false data in the application.
In 2011, a Southern Rural News reporter was told that officials in western provinces who get subsidies for pig vaccines overstate the number of pigs they have to get more subsidies (see "Pig Vaccines: Free and Worthless"). In eastern provinces where local governments have to foot the bill for vaccines, they under-report pigs. A Guangdong official said, "We take the number of pigs and reduce it by a third."
In Heilongjiang Province, officials overseeing "General Agricultural Development" projects had to go out and personally visit over 1000 companies and 2000 farmers to get correct information on the projects.
In 2006, China began offering fishing boats a subsidy for fuel costs. In subsequent years the number of fishing boats reported exploded. This month, the Ministry of Agriculture's Fishing Bureau told industry representatives they couldn't manage the industry well because data are inaccurate.