In 2018, the Chinese fertilizer industry has experienced price hike and weak demand led by stringent regulations on environmental and quality promotion, polarizing market. As the end of 2018 approaches, we summarized 10 most influencing policies chronologically and offered a brief analysis on their effects.
January: Environmental and export tariff
- On 1 Jan 2018, China implements the Environmental Protection Tax Law and imposed tax rate of 1.2 to 12 Yuan per equivalent on air pollutants and 1.4 to 14 Yuan per equivalent on water pollutants. As a replacement of pollution discharge fee system already adopted for 38 years, the use of tax leverage has added additional tax burden on chemical fertilizer producers.
- In this month, China also made adjustment on tariff on chemical fertilizer exporters: tax rate of NPK (3-nutrients) compound fertilizers has been adjusted from 20% the 100 Yuan per ton and the rate of rock phosphate has been reduced from 15% to 10%. Compared with the previous year, Nitrogenous and phosphoric fertilizers continued to enjoy zero-tariff treatment and the direct export of potash continued to be restricted.
April: National anti-counterfeit campaign
- On 3 Apr 2018, China MoARA issued the Announcement of “Action Plan for the Special Rectification of Counterfeit Agricultural Inputs in 2018”. During the rectification, illegal use of unregistered ingredients, insufficient active/nutrient ingredient, excessive ionic chlorine and other illegal acts were crackdown and infringing companies were disclosed through a blacklist.
May: VAT reduction, optimized plant structure and flexible implementation of environmental law
- Starting from 1 May 2018, China adopted a cut in VAT from 11% to 10% on pesticides, fertilizers and other goods. Overland and waterway transportation received a reduction to 10%. Criteria for the annual sales of industrial-enterprise and merchandizing-enterprise small-scale taxpayers have been elevated from 500,000 and 800,000 Yuan to 5 million Yuan.
- On 16 May 2018, MoARA confirmed favorable changes in planting structure. Rice acreage has been reduced by 0.67 million hectares to some 29.3 million hectares and soybean acreage has been increased by 0.67 million hectares to some 8.5 million hectares. The acreages of coarse cereals and beans grew by 670,000 hectares to some 9.3 million hectares. Other high value-added crops that represented increased acreages included strong gluten wheat, weak gluten wheat, high-quality rice, low erucic acid and glucosinolate rape, high protein soybean and reach sucrose and high yield cane, etc.
- On 28 May, MoEE issued a position paper on stopping the non-discretionary execution in environmental enforcement. Local governments that subject to central environmental supervision should adjust appropriate measures to differing conditions and minimize the impaction on production and economy. Neglectful behaviors such as “all shut down” or “shut down first and then rectification” should be strictly forbidden.
June: Agricultural brand building
- On 8 Jun 2018, MoARA passed the position paper on accelerating agricultural revitalization through brand building and an action plan to promote agricultural brand construction was implemented. MoARA added that the plan will be adopted across the whole agricultural production chain and plays an important role in China’s agricultural transformation and upgrading.
August: Soil pollution prevention law
- On 31 Aug 2018, the 5th session of the NPC standing committee passed the “Soil Pollution Prevention and Control Law”, which consists of 7 chapters and 99 articles. As the first legislation be specific to soil pollution control, its final implementation on 1 Jan 2019 will facilitate soil treatment sectors such as soil conditioner and bio-remediating products.
September: 7 billion Yuan special fund for contract agriculture production service
- On 12 Sep 2018, MoARA replied to a petition on contact production service by private investors. The Ministry and MoF(Ministry of Finance) have jointly offered a 7 billion Yuan special fund for small farmers using contract agriculture service, including soil tillage, factory seedling and pest control, as well as other critical production points.
November: Negative growth of chemical pesticide and fertilizer use by 2020
- On 1 Nov 2018, MoARA organized a communication meeting on chemical pesticide and fertilizer use reduction and green development of fruit, vegetable and tea plant. The Ministry deployed the key works in efficiency improvement, aim to achieve a negative growth of chemical pesticide and fertilizer use by 2020.
Something Wrong? At Chemlinked we do our utmost to provide you with accurate information. However sometimes errors slip under the radar, we’re only human. That’s where you our vigilant reader come in! If you notice any errors contact us on: email@example.com Budding Journalist ? Send us your news on: firstname.lastname@example.org