Economics Case Study

Agriculture - Overgrown
Adapted from ChinaEconomicReview
Economics Case Study

©Copyrighted - Economics 2010
Information – News Article
 Date : September 2010

 Source : China Economic Review
 Website :
http://www.chinaeconomicreview.com/cer/2010_09/Overgrown.html
 Title : Agriculture - Overgrown
 Writer : Not stated
Issues Highlight
 Problem of oversupply of fertilizer in its

fertilizer industries.
 Three main causes that result the
overproduction of fertilizer are :
 Imbalance of demand and supply
 Subsidies from China’s government
 Droughts and floods
Issues Highlight
 Fertilizer overproduction has brought some

impacts and awareness to societies :
 Increase in fertilizer exports
 Overuse of fertilizer - leads to soil destruction and
rivers and air pollutions.
Issues Highlight
 There are few ways to overcome the problem

of fertilizer oversupplying :
 Consolidation of fertilizer companies
 Reducing sources of fertilizer
 Stop the approval of new license to fertilizer
manufacturers
Causes of Overproduction
1. Imbalance of supply and demand
 Supply and demand imbalance is the factor

that causes oversupply of fertilizer.
 When the demand of the fertilizer decreases,
the quantity supplied increases.
 When supply of fertilizer increases, demand
of fertilizer may not as high as of the supply.
2. Subsidies from China’s government

 -China’s government plays an important role
in subsidizing agricultural efforts.
 For example, the subsidy for agricultural
supplies have increased from US$ 1.7 billion
to US$ 10 billion.
 Lead to oversupply of fertilizers as the cost of
fertilizer production has decreased.
3. Droughts and Floods

 Droughts and floods happened in China nowadays
causes :
 Land destroyed
 Affect the farmers to plant crops and thus the fertilizer
are hardly seldom used.
 To retain the good land after the droughts and
floods, required - large capital.
 Gave up and unable to afford the expenses for
retain the land.
Impacts or Awareness to Societies
1. Increase in fertilizer exports

 Increase the exportation of fertilizer efforts as
China produces excess of:
 Nitrogen
 Phosphorous
 Compound Fertilizers.
 To moderate the imbalance of supply and
demand of domestic fertilizer market.
2. Overuse of fertilizer which leads to soil

destruction
 Overproduction causes excessive usage of

fertilizers. This causes soil destruction
happens in China.
 Heavy use of chemical fertilizers in China had
caused severer acidification of the soil.
3. Rivers and air pollution
 Fertilizer oversupply leads to overuse.

 China has a relatively high consumption of
fertilizer if compared to other countries.
 High usage of fertilizer causes pollution to
the environment of China such as the air and
the rivers.
Solutions
1. Consolidation of fertilizer companies

 In a business competition, a weaker and
smaller company will surely get taken over by
other stronger companies.
 Over 800 small companies have either gone
bankrupt or being taken over by big
companies.
 Reduce the amount of companies, the
production of fertilizer will decreases.
Solutions
2. Reducing sources of fertilizer

 Nowadays, two types of fertilizer which are
the organic fertilizer and chemical fertilizer
are being used.
 Source of organic fertilizer which is the
livestock must be reduced.
 Mineral used for producing chemical fertilizer
must also be reduced. Thus, the production of
fertilizers will be cut down.
Solutions
3. Stop the approval of new license to fertilizer

manufacturers.
 Factor that cause overwhelming producers :
 Does not use up much resource to step into a fertilizer
production business.
 Encouraged many entrepreneurs to take the risk and
try invading into the fertilizer market.
 The license should be limited so that the amount
of companies producing fertilizer will decrease.
Conclusion
 Solutions must be taken to avoid the

overgrown of agriculture in China.
 If the solutions are not taken by government,

the impacts will continue and thus bringing
harm to human and Earth.
References
 ChinaAgriculture.2010.http://www.economywatch.com/agriculture/country-wide/
china.html (accessed 26 September 2010).
 China Fertilizer Exports expected to Increase. n.d.
http://news.agropages.com/Feature /FeatureDetail---254.htm (accessed 26
September 2010).
 Fertilizer overuse destroying Chinese soil. 2010.
http://www.alertnet.org/thenews/newsdesk/TOE61805G.htm (accessed 26
September 2010).
 Overgrown. 2010.
http://www.chinaeconomicreview.com/cer/2010_09/Overgrown.html (accessed 26
September 2010).
 Overuse of fertilizer and pesticide.2009.
http://www.china.org.cn/opinion/2009-10/15/content_18711525.htm (accessed 26
September 2010).
 Zenaide. 2009. http://news.frbiz.com/zhejiang_fertilizer_price_trend-
143900.html(accessed 26 September 2010).
Group Members
1. Wong Yu Ling 7E0A7437

2. Wong Ngie Kiong 7E0A7277
3. Wilson Wong 7E0A7391
4. Yong Kok Hiung 7E0A7733
5. Shirley Kiu 7d9a6745

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Agriculture - Overgrown

Adapted from ChinaEconomicReview

Economics Case Study

 Date : September 2010

 Problem of oversupply of fertilizer in its

 Fertilizer overproduction has brought some

 There are few ways to overcome the problem

1. Imbalance of supply and demand

 Supply and demand imbalance is the factor

2. Subsidies from China’s government

3. Droughts and Floods

1. Increase in fertilizer exports

2. Overuse of fertilizer which leads to soil

 Overproduction causes excessive usage of

3. Rivers and air pollution

 Fertilizer oversupply leads to overuse.

1. Consolidation of fertilizer companies

2. Reducing sources of fertilizer

3. Stop the approval of new license to fertilizer

 Solutions must be taken to avoid the

 If the solutions are not taken by government,

1. Wong Yu Ling 7E0A7437

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