By Joe Lardy, research manager, CHS Hedging
China has had a long-standing policy to be self-sufficient in key food source production, including rice, wheat and corn. In 2004, the Chinese government made historic adjustments to its agriculture policy when it eliminated taxes on agriculture and created a new system of subsidies for key commodities. The subsidies supported seed and machinery purchases and resulted in improved infrastructure.
This set the stage for a huge buildup of acreage devoted to corn production. (more…)