GuoXiaoming, Sichuan Academy of Social Sciences
In September 2011, the Food and Agriculture Organization of the United Nations officially released its "World Crop Prospects and Food Situation" report, emphasizing that the global food supply was under serious threats from poor harvesting, price hikes and export restrictions, which madeglobalfood security conflicts evident once again. Nonetheless,the food production data released in the same year by the National Bureau of Statistics on November 30, 2012 was extremely encouraging: China achieved yet another record high in harvest of 590 million tons, increasing 3.2% or 18.36 million tons from2011.This was the first time China, since its establishment, realized new highs in its harvest for the“ninth consecutive year”. ThatChina came up trump in achievingfood production growthamidst global food production decreases not only effectively responded to the once widespread doubt aboutChina's ability to solve itsfood security issues. Most of the doubt stemmed froman article entitled Who Will Feed China?: Wake-up Call for a Small Planet, which was written by Lester Russel Brown, the head of the Worldwatch Institute, and publishedin World Watchin 1994.It is believed that the fact thatChina’s food growth for nineconsecutive years had shownthat Brown’s viewpoints put forward inWho Will Feed China?: Wake-up Call for a Small Planet and How can China affect the world as one nation that cannot feed itself? (Translated) are groundless.A more optimistic view isthat China’s food security is reliable, and Chinese people's livelihood can be entirely in their own hands; therefore, it isunnecessary to excessively fear and even magnifyChina's food security issues, if any. However, hasthe pressure on China’s food security beentruly significantly eased? Or, is China’s food security issue is by itself a problem arising from the thinking errors? It can be certainthat views on this will not be consistent with each other and the debate will ragefor an extended period of time. It is highly important that China, accounting for 22% of the world’s population, has reliable food security at any time and underany circumstances. Even though its food productionhad risen for eight consecutive years, China still needs to be more clearly aware of the severe constraints and significant challenges facing itself with regard to food production, in order to prevent what former Premier Wen Jiabao described as "blind optimism growsalong with laziness and slackness.”
I. The situation of China's grain supply and demand is still critical
Despite the frequent occurrence of natural disasters, highly fluctuatedmarket conditions, and soaring production costs, China still managed to achieve food production growth for nine consecutive years, showing thatthe country has made tremendousefforts to achieve this result. This not only is one of the highlights in China's economic and social development, but also has established a solid foundation for China to deal with international financial crises, stabilize commodity prices, and promote steady social and economic development. Notwithstanding, there is no reason for us to be blindly optimistic and even slack off, because information closely relating to food securitycoming through other channels is very worrisome, andtoa large extentdirectly tests China's food security.
Although China’s food production realized the unprecedented “nine-consecutive-year growth”, China’s food import has also been growingfor ten years. The General Administration of Customs’ import and export data indicated that in 2012,China imported a total of 80.25 million tons of food, a year-on-year increase of 25.9%, including 13.98 million tons of cereals and cereal flour,58.38 million tons of soybeans, as well as 8.45 million tons of vegetable cooking oil. The year 2012 is also the year when China's foodimports reached a new recordhigh,growingby 2.33 times when compared with the year 2004, when the country for the first timebecame a food net importer and imported24.12 million tons of food. Due toa particularly acute contradiction between the land and peopleas well as fasterdemand growth than supply increase, it is inevitable that China rapidly increases itsfood imports, which is somehow a way of making up for its lack of resources by“borrowing overseas land for food cultivation”. According to the rough estimate of yield per acrefor domestic soybeans and rapeseed oil, in 2012 China's imports of soybeansand vegetable cooking oil wereequivalent to the amounts cultivated on650 million acresof foreign land. Together withthe imported cereals, the total area increased to 700 million acres. While it is important and essential tomake full use of both international and domestic agricultural resources and markets to ensure domestic food security, as the world's most populous country, China’s annual food consumption accounts for onefifth of the world’s total food consumption each year, andaround two times the global food trade volume. As a vast country, China must achieve balance between food supply and demand by mainly relying on its domestic production. It is due to the fact that excessive dependence on the international market is equivalent to building your food warehouse on overseas lands, which will make China controlled by other nations, as well as face huge natural, economic and political risks. In this perspective, in 2012 China's food import constituted 13.7% of its total consumption, which already exceeded the10% food security warning line.
While realizing“nine-year consecutive growth" in food production,China is witnessing an increasing imbalance between food supply and demand, andgrowing dependence on the international foodmarket.The country has already well exceeded its domestic food self-sufficiency line. We must face thishardreality, which is also a key pointfor our clear understanding ofthe nation’s food security status at present.
In addition, there are two aspects of facts which are confirmed bymany surveys and especially requireseriousattention.Firstly, owing toreasons including reduced food production and household eating-out consumption, and improved convenience in food purchase thanks to widespread markets, there is an obvious drop in food storage by farmer households. As a result, the "reservoir" effect of such practice, which originally served to scatter and ease food security pressure, decrease, which may magnifythe adverseeffects of food security issues. Secondly, the state food authoritieshavedifficulties in food purchase, leading to many state-owned food warehousesreaching new lows in food stock or even zero stock. The reduction of government reserves necessarily means decline state ability to realize balance between food supply and demand and deal with sudden, unexpected food-relating crises through governmental food reserves.
Thus,although mainly relying on policy and technological support, China has achieved the performance of food production growth for nine consecutive years.Nevertheless,the tight balance betweenfood supply and demand remains a very serious situation, andthe increasing external dependence onfood supplyis a trend in need of the most alert. Realistically, any tendencyto underestimate or ignore China's current food security issuesis very dangerous, and the thought that China's food security itself as a pseudo-problem is unfounded.
II. China’s food security has immediate concerns and long-term worries that cannot be ignored
For China,its food security is a theme in need of long-term, close concerns, and resolution ofthe issue of food security is even a very complex and difficult task, which would faceresource constraints in thelong run and institutional obstacles in the short term.
First of all, the long-term contradictions restricting China's food securityremain severe.
On the one hand, population growth and consumption level increasewill keepChina'sdemand for food on the increase.A related forecast indicatesthat for the next decade, China's population will continue the average annual growthof 8-10 million. By 2020, China's total population will reach 1.46 billion. Population growth will inevitably lead to increase in food demand. Supposingeach person consumes 400kg of food per annum, by 2020, China's total fooddemand will reach 584 million tons, an increase of 6.57% when compared with 548 million tons in 2010.Thiswill greatly exceed the growth rate of China’s food production for the same period. Concurrently, the acceleration of urbanization will make China's urban population increase at an annual rate of 11 million over the next decade.Alarge number of migrant workers will turn from food producers intofood consumers, which will also increase the amount of food consumption. In addition, changes in food consumption structures brought forth by economic growth will become more substantial. The increase in the demand for both feed grain and industrial use of grain will further speed up. According to arelevant forecast, by 2020 China’s feed grain demand will reach 236 million kg in total, accounting for 40% of the total food consumption. Concurrently, rapid development of bio-fuel, bio-pharmaceuticals and the brewing industrywill not only significantly increase the proportion of food spending, but also push up food prices, thus causing the anticipation of general commodity price increases.
Moreover, due to backward storage technology and poor facilities, thepostpartum loss rate of China’s food reachesabout 10%.Aside from that, the waste in the nation’s food consumption is very astonishing because of public consumptions and undesirable spendinghabits. These two reasons unreasonably increase food consumption and the pressure onfood supply.
On the other hand, the irreversible trend of decreasing arable land resource and water resource shortage will constitute long-term, tremendous pressure on China’s food supply. Under the institutional context of excessive pursuit of GDP, the "crowding out effect” on food production by industrialization and urbanization is extremely strong, andthe "non-agriculturization” of farmlands spreads across China. According to the relevant information published by the Ministry of Land and Resources, over the past decade China’s total arable land area reduced from 1.951 billion acres to 1.826 billion, a total decrease of 125 million acres(i.e. an annual reduction of 8.292 million acres). At present, per capita arable land areaper capitais onlysome 1.38 acres, approximately 40% of the globallevel. Meanwhile, the overall quality of arable land is quite undesirable.Fields with low and middleyield account for about 67% of the total land area, while problems, such as water and soil erosion, land desertification, and soil degradation, are severe. The back-up resource of arable farmlands is scared, andland areaappropriatefor cultivation totals under70 million acres. Similarly, the rapid industrialization and urbanization areobviously a dominant position in their competition against rural and agriculture areas for water resources. Because of the low threshold of water resources development as well as low-cost and low efficiency of industrial urban water usage, the latter’s water demand spirals out of order, while the phenomenon of "ride on a horse to enclose water” actually constantly intensifies the serious monopolistic behavior for water resources. At the same time, in rural areas, due to the coexistence of shortage of water resources and water for engineering, backward engineering construction, serious waste of waterin theuse process, there is increasing imbalance between water supply and demand. Overall, China's water resourceper capitaisonly 2,100 cubic meters, 28% the world average, and the water resource distribution is uneven inspatial and temporal terms. Water shortage has become a way of life, while respondingto frequent droughts has become the most daunting task to ensure food security in most domestic areas. The severe scarcity of strategic resources such as arable land and water, coupled with the irreversibly sharp decline in quantity and quality of such resources, together constitute the strongest long-term resources bottleneck forChina’s food development in the future.
Second, short-term factors affecting China's food security areeven moreworrisome.
Since 2010, the rising food prices and the ensuing quite large increase in commodity prices substantially reflected the full or partial imbalance between the supply and demand for food and agricultural products. This is, to some degree,yet again a comprehensive warning of China's food security. Reality shows that in addition to long-term constraintsimposed bydemand increase and mounting supply pressure, China's food security is also confronted with serious challenges in the following three aspects:
First, it is theincreasingly serious phenomenon of"non-food" arable land.For a long time, China’s agricultural style of fragmentedand small-scale agricultural lands led to low yield. In order to change this situation, local governments have introduced many preferential policies to guide companies and owners to engage in the rural land contractspractice for scale operations. Under such circumstances, the trend of rights to land contractual operation being transferred and concentrated to the owners continues to be strengthened. The land transfersbeganto break rural administrative boundaries, while bringing forth strong economic powers. The external industrial and commercial companies with abundant capital certainly occupydominant positions in rural land circulation. It should be noted that, since these urban and industrial companies intend to operate in the rural sector for profit, inevitably they will tend to cultivatecrops with higher profitability, so as to maximize the economic benefits. A typical survey by the Ministry of Agriculture shows thatof all the external owners with agriculturalactivities onthe arable land under circulation, only 7% of them grow food-related products by means of seed production and the like, the othersplant high-value products including vegetables, fruits andherbs.Some even have changed the purpose of land use in the disguise of agritourism. Obviously, we are faced with such a reality: the land circulation process is accompanied by the"non-food" trend and the larger the scaleof land transfer, the faster development of the "non-food" trend.Judging from these trends, China’s farmland circulation and concentration are being further accelerated, and despite much doubt,urban industrial and commercial companies with capital are still marching unstoppably into rural areas inlarge scale. It is foreseeable that the "non-food" trend will further expand, with the contradictions of seizing land from food production being sharper. Should these continue, they will inevitably exacerbate China’s food security situation.
Secondly,the extensive operation keeps running. Although in recent years food prices have tended to rise, with the food production tools rising more than food in prices, farmers' enthusiasm aboutgrowing producehas remained low. The rising labor costs in recent years have lifted the opportunity cost of farmers growing food and motivated more farmers to become migrant workers. After a large number of rural young workers migrate to the city, the problem ofan aging population in agricultural production becomesincreasingly prominent. We should be clearlyaware that currently we are indeed faced with a hardreality, which is the coexistence of the rapid development of modern agriculture in some areas and the decline of traditional agriculture in even wider regions. In many traditional agricultural areas, the industrial structure basically remains the same as before: outdated technologies, senior farmers, ultra-small scales, mainly with extensive management plus self-sufficiency, which together constitute the major characteristicsleading tothefading of traditional agriculture in these areas. As the remainedfarmersare aging, theycan only cultivate ona small scale for self-sufficiency, which will inevitably lead to more and more extensive operations or even farmland abandonments in many areas, which constitutesthe key factor affecting food production growth.In general, the basic pattern of scattered small and medium farmlandsforthe vast majority of food production areas remains unchanged. There are widespread extensive land operations, andthe internal mechanism for encouragement to increase the food production scale to an appropriate level has yet to be formed, which will undoubtedly restrictChina to further develop its ability forsustainable fooddevelopment.
Thirdly, inefficient state policies remain unchanged. The fundamental improvement in China’s food production is directly related to strong policy input. In 2012, such "four subsidies” (i.e. the direct subsidy for food, seed subsidy, farming machinery purchase subsidy and comprehensive agricultural materials subsidy)reached RMB 164.3 billion, an increase of 10.3 times over the RMB 14.5 billion in 2004. The substantial increase in agricultural subsidy, though being well received byfarmers, is not enough to make up for the gap of comparative effectiveness, and thus cannot generate adequate production incentives for most farmers to expand the scale of their food production. More importantly, for the GSP (generalized system of preference) way of existing subsidies mainly distributed averagely by contracted land area, the subsidy targetis only the farmland contractor rather than the actual producer.The implementation of the policy involves high costs, and to some extent makes farmland extensive operations and fallowing phenomena supported by policy, resulting in adverse factors infood supply increase. The main drawback of current agricultural subsidy policy lies in the confusion of two major policy objectives, namelyinterest compensation for farmers, and food production incentives, resulting in significant restrictions to such policies’ results.In astrict sense, the existing policy on agricultural subsidy is seemingly aimed to benefit farmers rather than for the reinforcement of food production policy. In the context of mounting pressure on food security, the agricultural subsidy policy cannot produce more direct and stronger policy signals for production scale expansion tofood producers. It is obviously important for us to reasonably adjust the corresponding policy in this aspect.
Moreover, food security includesnot only the quantity, but also the safety. In many areas, there is increasingly excessive use of fertilizers andpesticides, which is coupled with large-scale residues of plastic sheeting and manure discharge, leading to increasinglyheavier pollution of arable land and water.Therefore,foodquality and safety havebecome an increasingly serious problem.
III. Alarm bells must keep ringing on China's food security
As an important basis for national safety, the requirements for food security shall not be relaxed any time.China achievedincrease in in food production for ahistorically rareeight consecutive years.The pressure that food production falling behind demand is thus eased andthebasic balancebetween foodsupply and demand has been accomplished. Yet overall speaking, the balance betweenChina's foodsupply and demand is a low one achieved under a variety of constraints. From the development perspective, China's food production has both immediate concerns and long-term worries, and we have to face a basic long-term national condition that the foodsupply and demand balance will become an ordinary situation. From a fundamental viewpoint, to achieve China’sstrategic objectiveof food security will be a long-term arduous task. There are many huge, unforeseeable risks latent in the uncertainties in natureand on the international market. Torealize further breakthroughs in existing institutional and policy factors, China would also face extremely complex benefit constraints.
Realistically speaking, we shall cope with China’s long-term problem of food security on five fronts.Firstly, we shall continue to adhere to the most stringent farmland protection system, and further improve our ability infood supply and security on the basis of strengthening agricultural infrastructure and agricultural science and technology support, as well as the controlled use of international markets.Secondly, we shall optimize the food subsidy policy and build the long-term effective mechanism for food production with main focus on efficiency improvement, which can be achieved by reasonably balancing interest relationships betweenmajor food production and sales, as well as betweenfoodand non-foodfarmers; Thirdly, we shall increase the efforts inrural ecological construction and environmental management, improve food quality and safety, and wherebyestablish apollution-free industrial chain for the whole process, from thefood cultivation land to the table.Fourthly, we shall strengthen the state’scapability for monitoring and early warning for food security, and further improve the logistics system for foodstorageso as to strengthen the "stable product" feature of food supply and demand. Fifthly, civilized consumption shall be vigorously advocated to effectively curb the irrational waste offood.
In summary, to cope with China’s food security issue, we shall not accept the superstitious myth that “the market can guarantee our food security”, and need to remain high alert on "food weapon" frequently used in international trade.For China's food security, there are many insecurity factors which are difficult to resolve. While being not so terrible, such status is very worrisome. Any blind optimism is extremely dangerous, and any numbness or delay is intolerable. We must always remain clear-minded and keep due sense of urgency and crisis, in orderto keepthe alarm bell ringing, as well asmaking maximum and sustainable efforts.