By Albert Nyberg, World Bank

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7a. Source: World Bank staff estimates. essentially wastedpossibly contributing to environmental pollution. The underapplication of potash diminished the efficiency of nitrogen and phosphate uptake, and crop production was lower than it would have been with balanced fertilizer application. This analysis is consistent with a recent study of nutrient input and output on farms by the China National Rice Research Institute. In the short run nutrients are applied only to the extent that there is an economic yield response since some nutrient uptake is provided by soil nutrient reserves.

China has only one deep-water berth dedicated to bulk grain handling, with one other under construction. Most grain is now imported on 45,00050,000 dwt vessels, costing at least $10 more per ton in transocean freight charges than 80,000 dwt vessels. Without more deep-water facilities, trebling imports could add $400 million in transport costs. High throughput storage is crucial in a bulk grain logistical system. Domestic grain flows between coastal ports now exceed foreign imports and exports, while transfers through inland ports have remained stable.

Develop dedicated and integrated grain and oilseed transport facilities. Reduce government intervention in the cereal and fertilizer sectors, encourage market-determined prices, and open marketing and trade competition. Since the early 1960s China has made remarkable progress in national food security, though household food security remains a problem for low-income groups. Through the late 1960s and 1970s, large investments in agricultural research led to the production and adoption of new technologies.

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