Securing Grain

By LAN XINZHEN

Securing Grain

By LAN XINZHEN

New policies address grain concerns and allow China to remain grain self-sufficient

XINHUA

The current drought that has depleted water resources in many parts of China is the worst in nearly 60 years. However, the Chinese Government has launched new measures to fght the natural disaster.

The State Council unveiled 10 measures to support grain production at an executive meeting presided over by Premier Wen Jiabao on February 9. The following day, the Chinese premier held a conference to address national grain production, drawing universal concern about China’s food security.

Ding Shengjun, a professor at the Academy of State Administration of Grain, said this reflects China’s concerns about worldwide price hikes in grain and future increases in grain production.

In early February, the Food and Agriculture Organization of the United Nations (FAO) issued a report warning of grain production decreases in many countries as a result of extreme weather conditions. On February 15, the World Bank said an additional 44 million people may have fallen into dire poverty in low- and middle-income countries due to rising food prices since June 2010.

China has suffered a long spell of drought since October 2010. According to figures from the Ministry of Agriculture (MOA), by February 9, 2011, drought had affected 7.73 million hectares of winter wheat farmland in eight provinces, accounting for 42.4 percent of the total planting area in these provinces.

The State Council’s 10 new measures to boost grain production show the government’s commitment to addressing this problem and will help reduce the negative infuence of natural disasters upon grain production, Ding said.

Ensured food security

Despite droughts and foods, China was still able to produce 546.4 million tons of grain in 2010, an increase of 2.9 percent year on year. While keeping an increase in grain production for seven consecutive years, China is able to maintain a small surplus after achieving grain self-suffciency.

According to the State Administration of Grain (SAG), at present China has suffcient grain supplies, with a balance kept between demand and supply, and with inventory hovering at a comfortable level. In 2010, local grain and edible oil reserves increased by 26 percent and 208 percent respectively compared with those of 2005.

China has 13 primary grain-producing regions, Heilongjiang, Jilin, Liaoning, Inner Mongolia, Hebei, Henan, Shandong, Jiangsu, Anhui, Jiangxi, Hubei, Hunan and Sichuan, contributing almost 80 percent of the country’s total grain output. The grain production in these regions features a large scale and the use of advanced production techniques. The SAG fgures show that with vigorous government support, signifcant progress has been made in creating priority industrial belts of grain crops. So far nine such belts for wheat, rice, corn and soybean production have been set up in China.

Since China is self-sufficient in rice, wheat and corn, according to MOA fgures, it is less dependent on the international market for these products. Excluding soybean, the proportion of imported grain among the country’s total grain output has been kept below 5 percent.

MOA information released on February 17 showed that after vigorous irrigation efforts and precipitation earlier that month, the spreading drought had been curbed and even eased in a few areas.

“Even if wheat output decreases this year, the reduction won’t be that big,” said Li Guoxiang, a researcher with the Rural Development Institute of the Chinese Academy of Social Sciences. “China can cope with the reduction by using inventory and won’t need to increase its imports of wheat.”

Lurking dangers

“For China, which has a population of 1.3 billion, the bowl for our people must be in our own hands,” said Ding. “Right now, the mainstay of Chinese food security is not at all solid, and actually it’s likely to weaken.”

Ding said there are six points of concern for Chinese food security that need attention.

First, some local governments do not put enough stress on food security. Although the Central Government has set national food security as an important strategic task, some local governments are still advancing industrialization, commercialization and urbanization at the price of sacrifcing agriculture and grain production.

Second, grain consumption will soon surpass available supplies. With population growth, improved food structure, as well as development of modern food industries and expansion of the feedstuff industry, the country’s total grain demand will show rigid growth, Ding said. It’s estimated that by 2020 China’s total grain demand will top 600 million tons, which will surpass the country’s total grain supply at the same time.

Third, grain production is more restricted by agricultural resources, such as reducing per-capita cultivated land and water resources, deteriorating land quality, and environment pollution for grain production. MOA fgures show at present the per-capita cultivated land in China is less than 953 square meters and per-capita water resource is about 2,070 cubic meters, both much lower than the world average level.

Fourth, the resource allocation and structure for grain production are increasingly unbalanced. South China used to be the main wheat- and rice-growing region, but has now become a major grain consumer. North China, which lacks water resources, now contributes more to the grain output, but faces more serious shortages in water resources for irrigation.

Fifth, China lacks a quality industrial force for modern grain production. Chinese agricultural production now mainly depends on small-scale family operations. Women and the elderly now constitute the main labor force in rural areas that lack young, strong hands and talent well versed in science and technology.

“For a country that relies so heavily on grain, it’s worrisome that there lacks a quality contingent of agricultural workers in rural areas,” Ding said.

Sixth, foreign grain merchants look to nibble away at China’s food industry. The weak U.S. dollar has further driven up international grain prices denominated in dollars, stimulating and driving international speculative capital to fow into bulk farm produce markets. Now the four biggest transnational grain merchants—Archer Daniels Midland Co., Bunge Ltd., Cargill, Incorporated and Louis Dreyfus SAS—monopolize 80 percent of the world’s grain transactions and control absolute grainpricing power. China has almost no say in the international grain market.

“There are lurking risks or hidden troubles for China’s sustainable food security, so we must be careful to cope with it,” Ding said.