Chapter 355 - 352: Under a Vicious Cycle...

January 28th.

Tianzhu.

Delhi.

Dharma, who had returned to ground-based work several months ago, was in his office.

He was listening to a report from the head of the Ministry of Agriculture.

"Friday's data shows that as of January 28th, a total of 22.43 million hectares of wheat have been sown across the country. This is a 22% decrease from the 28.13 million hectares sown during the same period last year." Cold sweat beaded on the forehead of the ministry head.

Dharma's expression was grave. "I already gave orders for the northwestern states to guarantee their wheat acreage. Why is the decrease so drastic?"

"GULP... My apologies. It's because of the global crash in grain prices. The international price for wheat has already dropped below 275 US dollars per ton, and rice has similarly fallen below 266 US dollars per ton."

Dharma's head throbbed.

After the southwest monsoon from June to September last year, Tianzhu experienced prolonged rainfall in October and November. This improved the soil moisture in the central and northern regions, creating favorable conditions for increasing the acreage of wheat, the main winter crop.

He had therefore ordered the northwestern states to increase their wheat acreage to boost Tianzhu's total grain output and reduce its dependence on grain from the Homo Sapiens Company.

However, his carefully laid plans were no match for the free market, nor for the profit-seeking mentality of countless farmers and farm owners.

Currently, even with government subsidies from Tianzhu, after factoring out costs for fertilizer, pesticides, and labor, a ton of wheat yielded a profit of only 11 US dollars at current international prices.

What was more terrifying was that the Homo Sapiens Company was already planning to lower the price of its processed flour to 120 Jin Yuan per ton in February, equivalent to 240 US dollars per ton.

At that price, growing wheat would be completely unprofitable. Farmers could only use it for animal feed or for their own consumption.

Small-scale farmers might be able to eat their own crops, but how were the large-scale farm owners with dozens of hectares of land supposed to consume it all themselves?

Of course, there was another option: Tianzhu could use its own funds to buy the wheat at a high price.

But Dharma looked at the newly released economic data for '22—a long string of deficits, a loan of 83.7 billion US dollars from America, and another 56.6 billion Jin Yuan from the Homo Sapiens Company. A look of helplessness was all that remained on his face.

For the better part of the last year, the Homo Sapiens Company's cheap grain had relentlessly flooded the entire Tianzhu market. At the same time, the company had also raised its purchase prices for various cash crops.

Many farm owners had directly converted their wheat, rice, and corn fields to grow cash crops like tea, jute, turmeric, galangal, ginger, garlic, onions, black pepper, star anise, scallions, and fruit.

This was clearly a deliberate strategy by the Homo Sapiens Company. They were targeting all of Tianzhu's staple food sources—rice, wheat, soybeans, sugarcane, peanuts, and the like—for low-price dumping.

Simultaneously, they were purchasing designated cash crops at high prices.

In terms of wheat acreage alone, Tianzhu had already lost over six million hectares this year. The projected decrease in wheat production was 30 million tons.

If this wasn't stopped, the acreage for rice cultivation in June would likely see a significant reduction as well.

The country's grain production was already only 280 million tons (after excluding the Assam Region). Now, with cash crops having already replaced a large portion of the acreage for wheat and corn, a reduction in rice acreage would mean another massive shortfall in this year's total grain output.

'Damn it!' Dharma clenched his fists. He realized that Tianzhu had fallen completely into the rhythm set by the Homo Sapiens Company.

To fill last year's grain shortfall, they had to import 30 to 50 million tons of grain. But Tianzhu didn't have the money, so it had to develop its economy, which in turn forced them to open their markets further to the Homo Sapiens Company.

As a result, Tianzhu was unable to use anti-dumping measures or increase tariffs to protect its domestic grain industry.

The Homo Sapiens Company then further exploited low grain prices and high purchase prices for cash crops to crush the incentive for Tianzhu's farmers and farm owners to grow food crops, increasing the proportion of cash crops.

This would cause Tianzhu's grain production to fall this year, and the massive food deficit would persist.

No, the food deficit might even continue to grow.

'But what can I do now? Refuse to buy grain from the Homo Sapiens Company?'

'Don't be ridiculous. ABCD is already in full retreat on the international grain market. Even with increased support from the City of the Council, there's been no way to improve ABCD's difficult business situation.'

'After all, the international grain prices are what they are.'

'The Homo Sapiens Company is already developing high-yield saltwater rice in the Suez Region. They're expected to complete the first phase of agricultural zone renovations in the Suez's Red Sea Province this year, with plans to plant 20,000 square kilometers of saltwater rice, yielding up to 72 million tons annually.'

'Likewise, the company's agricultural zones in Southeast Asia, Assam, Ceylon, and Mad Island will also see some degree of increased production.'

'The Assam Region in particular, thanks to the temporary armistice with Tianzhu, will produce 80 to 90 million tons of rice this year.'

'Following this trend, the Homo Sapiens Company's total grain production for the year '23 will reach an unprecedented 920 million tons.'

'Even if every Homo Sapiens Company employee were a glutton, and factoring in consumption for animal feed, they'd only consume 600-700 kilograms of grain per person on average. With over 800 million employees, that's only 520 million tons of grain consumed.'

'The remaining 400 million tons will be dumped onto the international market.'

Dharma was no fool. He knew that under these circumstances, global grain prices would remain depressed for a long time, and other grain-exporting nations would lose much of their interest in growing food crops.

In fact, this was the same strategy America had always used: massively subsidize its domestic grain industry, suppress other grain-exporting countries, and finally use ABCD to control the agriculture of other grain-producing nations.

The Redwood Federation in South America was a classic example; its agriculture was completely in ABCD's grip.

But now, ABCD had finally met its match.

The Homo Sapiens Company was unlike any opponent ABCD had faced before. In their several confrontations, it was always ABCD that came out on the losing end.

The reason for ABCD's devastating losses was that the Homo Sapiens Company had its own complete system, giving it an advantage over ABCD in seeds, pesticides and fertilizers, agricultural machinery, labor costs, storage and transport, agricultural land, and farming technology.

Now, the Homo Sapiens Company was deliberately waging a price war, turning ABCD's own strategy back against them.

Once caught in the Homo Sapiens Company's rhythm, the consequences were dire.

And that was exactly the situation Tianzhu was in now.

Its domestic grain production had plummeted. Meanwhile, its population, even after subtracting the 55 million people in the Assam Region, still stood at 1.345 billion. Such a massive population required an astronomical amount of grain.

After getting a taste of the profits from growing cash crops, the farm owners and farmers couldn't care less about food security. Earning Jin Yuan was all that mattered; Jin Yuan could buy anything.

For Tianzhu to escape its dependence on the Homo Sapiens Company's grain, the only way was to find an alternative supplier while also building up its own grain reserves.

The problem was, both of these things were incredibly difficult to achieve.

This was because many of the compradors collaborating with the Homo Sapiens Company had opened numerous supermarkets, helping the company dump its grain and industrial products.

Farm owners and farmers could also get exclusive coupons from the Homo Sapiens Company to buy cheap goods and grain at these comprador-owned supermarkets.

But when it came to grain procured by the Tianzhu government, the Homo Sapiens Company would drag its feet, deliberately making excuses not to sell, keeping Tianzhu's official strategic grain reserves at a constantly low level.

Dharma truly wanted to kill that bunch of compradors and farm owners, but the thought of their sheer numbers and their tangled, deep-rooted networks made him deflate with despair.

Clearly, the Homo Sapiens Company's strategy in Tianzhu was beginning to bear fruit.

In the future, Tianzhu's domestic grain production would only continue to shrink. The day Dharma stopped playing along, they could simply jack up the price of grain.