Chinese peasants reaping benefits of rising food prices

Article after article has come to the news regarding the alarmingly high inflation levels for food prices in China. Initially blamed on seasonal and weather-related effects or tied to the price of global commodities, it has become clear that booming food prices represent larger structural change. China’s current dual track system, forming a transitional government from its former command economy to a more market-driven economy, may be partially the cause.  Others have pointed to a steadily expanding economy or the changing make-up of Chinese exports.  Whatever the driving force might be, food prices have gone up by 11.7% this year alone and in some cities the prices of basic commodities like rice, cooking oil and vegetables have risen by 100%.

So what does this situation mean for the workers?  In fact, some argue that rising food prices might in some part be the result of improving working conditions.  Frequent labor protests throughout China have led to raises in the minimum wage and improving conditions for industrial workers have pulled agricultural workers into the factories.  This subsequent drop in farm workers has led to a labor shortage that has allowed for increasing wages for farm workers and a food shortage resulting in spiking food prices.  Though these prices mean a higher income percentage paid for food, the more than 600 million rural peasants of China could actually reap the benefits.

Food shortages have required an increased demand for agricultural product and a rising call for farm workers themselves.  While higher food prices are pulling at the pockets of China’s urban dwellers, a Business China article argues that “The increases this year in food prices have done more, in a shorter time, to lift income levels for many of China’s 600 million peasants than any other single measure taken over the last 30 years.”  According to official Chinese media outlets, wages for farm workers have increased by as much as 100%.

While the Chinese government continues to frantically open up extra food supply stock and encourage farmers to produce more food next year, there clearly is an upside to this problem.  The poorest members of the Chinese community may finally be reaping the benefits.  Rising wages throughout China mean that an increasing food bundle price may not have the harrowing impact that some speculators predict.  Although continued rapid inflation overall is cause for concern and should be properly addressed through the strengthening of currently fixed Chinese currency, it must be acknowledged that the balance might finally be shifting back a bit toward agricultural workers.

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