Thursday, December 6, 2012

Time to Abandon the Food Self-Sufficiency Delusion?

An opinion piece circulating on China's Internet calls for China to give up its near-sacred goal of self-sufficiency in grain.

For a long time Chinese government officials have stressed the importance of maintaining self-sufficiency in grain with rhetoric like, "The Chinese peoples' rice bowl must be firmly in their own hands." The 2008 medium and long-term plan for food security insisted that China must produce at least 95 percent of the grain it consumes. The Ministry of Agriculture reiterated the self-sufficiency goal in February of this year.

The article places the self-sufficiency issue in historical context. It suggests that the insistence on self-sufficiency is based on China's history as an agricultural country with a large population. It refers to the huge famine in the early 1960s, referring to it as a "manmade disaster" (officials still refer to it as several years of "natural disaster"), as an event that influences the grain self-sufficiency fixation.

The article picks up on the "urbanization" mantra that dominates official rhetoric about China's new stage of historical development. While not stated explicitly, the article seems to imply that China should quit pretending it can remain a big agricultural country that feeds itself as it becomes an urbanized society. With China facing a huge task of urbanization, cities will have to expand, reducing land available for agriculture, argues the article's author. China should be realistic and prepare to become the world's biggest importer of agricultural products.

The writer quotes Chen Xiwen, the country's top rural policy advisor, who has acknowledged that China would need 3 billion mu of land planted in crops to eliminate agricultral imports, but it only has 2.4 billion mu--a deficit of 20 percent. The article also cites an assertion by the Chinese Academy of Social Sciences that China's cultivated land area has already dipped below the 1.8-billion-mu "red line" deemed necessary for maintaining food security. (The 1.8 billion mu refers to the physical amount of land available; the 2.4 billion presumably double-counts land that has two crops a year planted on it.)

The NBS announced this month that grain production increased in 2012 for the ninth year in a row. The total grain output of 589 million metric tons this year already exceeded the goal of 550 mmt for 2020. Yet China already imported over 60 mmt of grains and soybeans in the first ten months of this year. Since last year China has been a net importer of all the major grain crops--corn, wheat and even rice. The article says grain and soybean imports are on track to reach 72 mmt this year, which would be 10.9 percent of all grain consumed in China.

The article warns that it is inevitable that China will become a bigger importer of grain. It already accounts for 30 percent of world trade. China needs to pay attention to overseas trends and developments. China must be more proactive, buy or rent land overseas, invest in foreign agricultural and trading companies, and gain influence and control in world agricultural markets, argues the author.

The writer recommends that grain prices be increased. This would make agriculture more profitable and attract capital investment needed to upgrade the agricultural industry. China needs to reverse its traditional "scissors policy" of setting low prices for agricultural commodities to subsidize industry and urbanization.

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