The communist party's December 2013 economic work conference set "food security" as the top priority. Officials are gradually dribbling out details on a more market-oriented and flexible approach to food security.
An essay by a researcher from the State Council's Development Research Center explains China's new approach to food security. The researcher, Ye Xingqing, explains that a new strategic approach to food security strategy has evolved in response to environmental pressures and resource constraints. Mr. Ye says this adjustment of strategy in response to changing circumstances is consistent with the Deng Xiaoping principle of "seeking truth from facts."
Mr. Ye emphasizes that the food security strategy is formulated with a long-term view of maintaining balanced supply and demand of staple foods in China's transition to a new stage of development with a higher degree of urbanization and higher living standards. The new strategy emphasizes the importance of relying mainly on domestic supply, but allowing for appropriate imports.
Jettisoning soybeans from the defintion of "food" makes it easier to be secure since about 80 percent of China's soybeans are imported. Since 1996 China has adhered to a quantitative target of 95-percent self-sufficiency in "grains" which included cereals, soybeans, other beans, and tubers. By 2012, self-sufficiency based on this definition was down to 89 percent, which Mr. Ye said undermined the government's credibility. The new food security strategy narrows the scope to focus on cereal grains, especially on rice and wheat. The new slogan is, "cereals basically self-sufficient, food grains absolutely secure."
Mr. Ye emphasizes that the new strategy will no longer set incontrovertible quantitative targets for self-sufficiency. The degree of self-sufficiency will be determined by the relative prices and costs of agricultural commodities in China versus the international market, "not by government slogans." Mr. Ye connects this new approach to the two principles from the November 2013 "third plenum": market-directed resource allocation and a greater degree of openness in the economy.
Mr. Ye depicts Chinese agriculture as essentially an open economy. After joining the WTO, he says, China adopted tariff rate quota management and "amber box" policies but "they are very limited." He implies that China has few policy tools to insulate itself from imports.
Authorities need to push and influence the market, insists Mr. Ye. The food security strategy calls for relying mainly on domestic production, which means production capacity must be improved. He focuses on policies that can raise productivity and reduce unit costs: restore productivity to the soil, encourage mechanization and science and technology, promote larger-scale farming operations.
Shared responsibility between central and local authorities is another important part of the food security strategy. The "governors' rice bag responsibility system" set up in the 1990s is being re-emphasized. The Number 1 document said authorities in grain-deficit areas are expected to maintain reserves, form fixed buying relationships with grain-producing areas, and set minimum amounts of cropland (errr, well maybe not all resources should be allocated by the market). Various kinds of transfer payments are being set up to help authorities in grain-producing areas to finance grain-related infrastructure improvements.
The new food security strategy acknowledges that China's current production is unsustainable. He says China must "retire the toxic capacity, add healthy capacity." Environmentally-fragile hills, grassland, and wetlands should be retired and returned to conservation uses. This year China will begin pilot programs to rehabilitate 50 million mu of severely polluted cropland.
Mr. Ye acknowledged that the "appropriate imports" part of the food security strategy is controversial.
The nuanced approach to imports was on display in another opinion piece posted on the Peoples Daily site December 30, 2013, "Simple Free Trade Thinking Can Harm the People, Harm the Country." The writer made many of the same points about the difficulty of meeting demand with domestic supply but insisted that grain is a "priceless" commodity with strategic material properties. "Facing a complex international political environment, simple free trade thinking can harm the country and the people."
Mr. Ye insists China must accept agricultural imports as an inevitable trend. In 2010, researchers estimated that imports of oilseeds and edible oils would have required 760 million mu--about a third of China's cropland--to produce domestically. He emphasizes that other countries need stable expectations about China's intention to buy commodities. He cited a food security forum held in November where representatives from the United States and Brazil wondered, "Will China want our grain?"