(Yicai Global) Feb. 8 -- China’s soybean production reached an all-time high in 2022, but prices have dropped and, even with government subsidies, farmers are reluctant to expand their planting area.

China produced a record harvest of 20.3 million tons of soybeans last year, largely due to the larger planting area. Some 10.3 million hectares of the grain were planted, a jump of 21.7 percent from the previous year and the second largest area since 1949, according to the National Bureau of Statistics. And yields edged up 1.6 percent from a year earlier.

But soybeans grown in China are more expensive than imported varieties and farmers need government subsidies in order to break even, Li Mingfeng, chairman of Heilongjiang Longke Seed Industry Group, told Yicai Global. Even with assistance, the return is still not high compared to planting corn, resulting in a general unwillingness to plant the crop.

Zhao Jinyu’s earnings from soybeans this year were not bad thanks to government subsidies, but not as good as that from corn, the farmer from Suihua, northeastern Heilongjiang province told Yicai Global.

Zhao was able to sell at a good price, earning around CNY3,000 (USD442) per hectare, when not taking into account government subsidies, but not all local famers were so lucky, said Zhao, who is also the head of an agricultural cooperative in his village. By comparison, a hectare of corn can bring in CNY4,540.

The income gap between soybeans and corn was about CNY2,300 a hectare for farmers at Heilongjiang Longlian Farmers Cooperative Association, Meng Deli, general manager of China’s largest agricultural operator, told Yicai Global. Longlian has around 130,000 allotments covering 73,300 hectares, one tenth of which is used to plant soybeans.

Before, when land rents were lower, farmers could get a good income from planting soybeans, Meng said. But in the past two to three years, land rents have climbed with higher corn prices and farmers in many regions are unable to get government grants for various reasons.

Despite the reluctance to plant the grain, the Ministry of Agriculture and Rural Affairs has set a target of expanding the planting areas for oil crops such as soybeans by another 666,000 hectares this year.

Most of the land available for soybean cultivation in Heilongjiang has already been utilized so the central government should assign part of the expansion task to other provinces with more land, such as the Inner Mongolia Autonomous Region and Xinjiang Uyghur Autonomous Region, Li said. Heilongjiang can provide technical support.

Editors: Tang Shihua, Kim Taylor