Monthly News Review, October 2002

Rollers have started cranking in the major sugar refineries in the southwestern province of Guangxi Province. October through April is the usual harvest season in this region which produces half of China’s raw sugarcane. Official estimates put the harvest for the current crop at 4.3 million tons. Evaluation of last year’s sugarcane production is positive, stating that the five major sugar refineries in Guangxi have observed the pricing guideline and “have gained the full confidence of local sugarcane farmers”. However, official reports do not quite tally with the local situation – on September 12, 2002, sugarcane farmers put the Yizhou city government under siege in a large-scale protest over the long-standing problem of low sugarcane prices. According to a local witness, around 30,000 sugarcane farmers joined the protest.

Yizhou city is in the centre of the province and is close to the main Guizhou-Guangxi railroad. On that day, enraged farmers from the surrounding rural areas stormed the government building. The national emblem and plagues that read “Serve the People” and “Three Represent Theory”, and scores of private cars in the courtyard were smashed. Upstairs, windows were smashed, and office furniture and equipment like TV sets, computers, desks and chairs were thrown out. About 10,000 of protestors then set out to block the Guizhou-Guangxi railroad, disrupting train services for six hours.

The farmers were protesting against the low raw sugarcane prices and the delay of the second payment for 2001-2002 by Boqing Foodstuffs Co. Ltd., a joint venture with British Sugar Corp (Overseas) (Note 1), which is one of Guangxi’s five major sugar refineries applauded in the official evaluation.

An official from the local complaint office confirmed the protest but he said that it was just several thousand protestors only, and that some “miscellaneous outsiders” came along, smashing police vans and office windows. He also confirmed that there were arrests and the police were still seeking the protest leaders. The search mainly targeted Beishan town, which was considered as the flash point of the protest.

According to a sugarcane farmer from Beishan town, one of those arrested was the farmer who posted a notice [around August 26] calling for fellow farmers to meet with the company on September 2. Others included farmers’ representatives who attended the meeting on September 2. Another farmer told of beatings in police custody.

By October 24, more than 20 protestors have been arrested on various charges including assault, damaging property, disrupting public order and tarnishing the national emblem, according to the local procuratorate. Further inquiries with the city public security bureau have yielded nothing and the official in charge of the city complaint office claimed that no farmers were under detention.

The immediate trigger of the protest was the delay of the second payment. The sugarcane farmers are paid in two separate installments – when they hand in the cane during the crop season, and then in August, when the ‘floating price’, set by relevant authorities based on the market price of sugar, is released. This year, the ‘floating price’ of Rmb 22 in question was released on August 20, and the farmers still had not received the payment by August 25. They started to get anxious since that was the time when payment of their children's school expenses was due.

Behind this spurt of rage is the long-term undercurrent of low sugarcane prices. For 2001-2002, they were paid at Rmb150 per ton but the same grade of cane could reportedly fetch Rmb 40-50 more in neighbouring towns. When asked about the price differential, an official from the company’s complaint office said the company was simply following the pricing guideline set by the city government. The close relationship between the sugar refinery and the local government, however, blurs the line of responsibility (Note 2).

What is obvious to the sugarcane farmers is that the prompt increase in the floating price and payment after the protest proves that the government/sugar refinery are on shaky ground when they force down the price. An official in charge of the city complaint office admitted some “deviation” in the sugarcane [floating] prices, but that the problem had been fixed – an increase of Rmb15 for each ton of high-grade cane and Rmb5 for average grade. A meeting was also convened on October 21 with the pricing problem on the agenda. Reportedly, Boqing promised to “improve their logistics” to make sure that the farmers receive their payment with no delay.

The farmers’ protest underlines the impending threat of sliding prices of domestic sugar upon China’s entry to WTO on December 11, 2002 (Note 3).

Under the catchphrase of ‘enhancing competitiveness’, an imminent hit on the sugarcane farmers is slashed sugarcane prices. Chinanews Online reported on October 21, 2002 that the increase in imported sugar “has definitely dealt a blow to the sugar industry in China. Sugarcane prices have been scaled down, directly affecting the income of sugarcane farmers”.

Official publicity of successful sugarcane farmers with the assistance of “computerized agrotechnique information service” as a preparation for China’s entry to WTO (Note 4) has done its job – just a matter of publicity. In the fields, sugarcane farmers in Yizhou are trekking a difficult path to make their ends meet.

Official statistics show that rural household per capita cash income in the first three quarters of 2002 was Rmb1721 compared to Rmb 5793 for urban households (Note 5). Guangxi Province ranks 19th among the 31 provinces/municipalities/autonomous regions, and only one fifth of the income is derived from the sale of crops. Farmers have to supplement family income with various sideline production and salaried labour.

The prospect is even more worrying when farmers’ expenses are taken into account. Heavy, and very often, illegal levy of taxes and fees are eating away farmers’ hard-earned income. New York-based China Labor Watch has released a “typical balance sheet” of a rural family in the southern province of Jiangxi, showing an unbelievable balance of Rmb 388 for the whole family in 2000-2001 (Note 6).

Protests against high taxes and local corruption, taking the form of petitions, besieging government offices, and at times, violent outbursts, are not uncommon in rural China. The ‘tax riot’ in Jiangxi Province in August 2000 in which 20,000 farmers stormed the local government building points to the scale of the problem (Note 7).

Their actions send a strong message to the government – rural poverty is really a big headache (Note 8). This is especially so when ‘stability above all’ and ‘attracting foreign investment’ are the keystones of government policies, and the 300 million agricultural workers are still denied the right to organise themselves to defend their livelihood (Note 9).

China Labour Bulletin

2002-10-31

Notes

(1) British Sugar Corp (Overseas) (BSO) is a subsidiary of Associated British Foods Ltd., and is mainly engaged in expanding sugar-related business outside Britain. Its first joint venture in China is Boqing Foodstuffs Co. Ltd., which was incorporated in 1995 in Yizhou City. BSO controls 60 percent of the joint venture's stake while the Chinese partner, Yizhou City Shibie Sugar Refinery – subsidiary of Yizhou City Sugar Company (Group) – takes up the remaining 40 percent. In October 2000, Boqing bought in another sugar refinery in Huaiyuan town (45 km to the northwest of Shibie town). BSO acquired other two refineries, Bo Hua and Bo Xuan, in Guangxi – both with majority stake. (back)

(2) Apart from the organisational link with the city-level collective enterprise laid out in Note 1, Boqing is tinted with official color since its general manager, Deng Qing, is also the mayor of Yizhou city. (back)

(3) On Most-Favoured-Nation tariffs, from the date of succession, tariff quota for sugar is increased from 1,680,000 tonnes to 1,945,000 tonnes in 2004 at an annual growth rate of 5%, and in-quota tariff rate will be reduced from the current 20% to 15% in 2004. And tariffs on cane, beet and a couple of refined sugar will be slashed from the current 71.6% to 50% in 2004. (Source: ‘Compilation of the Legal Instruments on China's Accession to the World Trade Organization’ at http://www.moftec.gov.cn/article/200207/20020700032358_1.xml) (back)

(4)‘China Sugar Industry Prepares for WTO entry’, People’s Daily Online, October 28, 2001, (http://english.peopledaily.com.cn/200110/28/eng20011028_83336.html) (back)

(5)The urban statistics refer to ‘disposable income’. Both figures are obtained from the official website of the National Bueau of Statistics at http://www.stats.gov.cn/tjfx/jdfx/200210290055.htm (urban households) and http://www.stats.gov.cn/tjfx/jdfx/200210250112.htm (rural households). (back)

(6)See ‘Chinese Peasants of Misery’ at http://www.chinalaborwatch.com. (back)

(7)In August 2000, about 20,000 farmers in Yuandu Town, Jiangxi Province, protested against heavy taxation in a ‘tax riot’. Local government building was stormed, and fittings and furniture were smashed. The riot was finally quelled when the government sent in 2,000 armed police. (Source: http://news.bbc.co.uk/2/hi/world/asia-pacific/901567.stm) (back)

(8)In the press conference after this year’s National People’s Congress, Premier Zhu Rongji referred to rural poverty as the biggest headache, particularly so with China’s entry to WTO. (back)

(9)According to the National Bureau of Statistics, 353.64 million people were engaged in the primary sector in 1999 (Source: http://www.stats.gov.cn/ndsj/zgnj/2000/E01c.htm). With more and more farmers taking up non-agricultural jobs, the current workforce in this sector should be smaller. (back)