Farmers in Shaanxi province, one of the country's major wheat and maize production areas, are both happy and worried following the summer harvest.

"We had a very good harvest. My 6.7 hectares of farmland has given me an extra income of 2,400 yuan ($350), compared with the previous year because the central government had set a minimum purchase price for wheat early this year," Liu Chunqiang from the village of Poliu, Xianyang city, said.

But he is also worried - fertilizer prices are going up.

"I could buy a bag of potash for 120 yuan last year, but now I have to pay 265 yuan," Liu said.

Yang Maisheng, a farmer from the village of Jiulong, Weinan city, said he could not buy urea because of a shortage.

"The price today is 110 yuan for a bag, it was only 90 yuan in March," Yang said.

The farmers said more pressure will be put on them during the autumn harvest as prices continue to rise.

Yu Qi, manager of a fertilizer supply company in Weinan, said his company had been unable to sell urea since April despite having paid manufacturers in March.

Fertilizer manufacturers said the tight supply was due to rising production costs, snowstorms in late January and the earthquake last month. The subsidy policy introduced by the Shaanxi provincial government also played a part.

Jiang Jitao, deputy general manager of a large fertilizer company in Shandong, said the snowstorms and the rising price of coal had affected the production of fertilizers.

Statistics from the China nitrogenous fertilizer industry association show the country's total output of urea decreased by about 1 million tons this year.

Shi Juntong, deputy director of the Shaanxi provincial agriculture department, said the provincial government early this year paid 47 million yuan to local fertilizer companies to reduce their prices in order to help farmers.

Zhang Zi'an, manager of a fertilizer company in Liquan county, said: "The policy reduced the price of fertilizers produced by Shaanxi companies, but we suffered a loss because we had bought a large amount of fertilizers from other provinces at a high price. We bought high and had to sell low."

Local agricultural officials are worried if shortages and high prices cannot be solved by the autumn harvest.

Shi said the agriculture department will encourage local dealers to try to get more fertilizers for farmers.

(China Daily June 24, 2004)