A farmer harvests soybeans in China's Jilin province. Photo: Xinhua
A farmer harvests soybeans in China's Jilin province. Photo: Xinhua

Soybeans have become a weapon for Beijing in its tit-for-tat trade row with Washington. Chinese importers stopped buying the US legumes after Beijing imposed a 25% tariff in early April, a move which threatens billions in exports and many farmers in the US Midwest.

US agribusiness conglomerate Bunge Ltd has said Chinese importers had stopped buying American soybeans and were now sourcing the crop from Canada and Brazil.

The US exported over 53 million tons of soybeans last year and most of that – nearly 33 million tons – was shipped to China. In 2016, some 61% of US soybeans were sold to China, a $14-billion business that made the crop the most valuable agricultural export for US farmers, according to the US Department of Agriculture, Business Insider reported.

But overseas croppers elsewhere are unlikely to fill the gap given China’s appetite for soybeans, a major source of protein to feed livestock, as well as people, and a fundamental agricultural produce for numerous industrial uses.

Reports in Chinese papers anticipate a huge shortfall in soybeans if the trade dispute is not resolved and that Beijing will be forced to turn to domestic suppliers, in particular farmers in its northeastern provinces of Liaoning, Jilin and Heilongjiang, which have long been areas where rice and other grains were grown.

Officials in the northeast, told recently to stave off defectors from North Korea and brace for refugees if Kim Jong-un’s nuclear buildup goes astray, have been assigned a new task: head to the countryside, get your hands dirty and grow soybeans.

Hong Kong’s Ming Pao daily also noted that farms in Jilin and Heilongjiang were asked to uproot corn and rice crops so there is land to grow soybeans, after an ad-hoc meeting attended by a deputy premier last month exhorted leaders in the three northeast provinces to act fast to ratchet up domestic supplies so that Beijing’s use of soybean imports as a lever in the trade war against Washington doesn’t backfire.

Heihe, a prefecture-level city in Heilongjiang, has set aside 15.5 million acres of land, which would account for a sixth of China’s total soybean cultivation. Allowances and a government-guaranteed procurement price was gazetted as an added incentive to lure self-employed peasants to grow soybeans.

Wang Xiudong, a researcher with the Chinese Academy of Agricultural Sciences, told the Beijing-based Economic Observer that the shortfall could be no less than 25 million tons this year, and that estimate was on the conservative side.

Wang said China had already bought 72% of Brazil’s soybeans while other key producers like Argentina were facing a drought. But Beijing was yet to establish diplomatic ties with Paraguay, another big exporter.

While these northeastern provinces can do little to hasten the growth of soybeans already planted there, some whimsical stop-gap measures have been proposed by Chinese papers, like a campaign against people eating meat – from livestock fed with soybeans – but also tofu, soy milk and soy sauce.