Thursday, July 31, 2014

China's Water Choice: Grain or Coal?

An official of China's Ministry of Environmental Protection dared to think clearly about environmental and energy issues. Recognizing that both coal and grain production require large amounts of water, the official recommended that China could scale back grain production in Shanxi, Shaanxi, Inner Mongolia and Xinjiang to free up water for coal production. Instead, China could import more grain from overseas, the official suggested.

The daring proposal was made by an environmental assessment inspector  at the "2014 China international energy summit" held in Beijing July 28-30.

The official was inspired to think the "forbidden thought" of importing grain when he visited Italy and found farmers protesting outside the parliament over the cancellation of a plan to export grain that had collapsed because they couldn't find a market.

The environmental official notes that many people in China say the country should never import grain. But he doesn't see why "food security" should be elevated above "energy security", noting that China imports 60% or more of its energy. He argues that the "cold war mentality" [of grain self-sufficiency] must be broken to relieve pressure on the "precious water resources" of coal-producing areas and revive their "fragile ecology." Importing grain from Canada, France, or Italy, he says, would also reduce pesticide and fertilizer use "a little bit."

The official addressed the concern that "everything China buys gets expensive." He says if China starts importing modest amounts of grain, prices may go up at first. But the "law of the market" may make prices go down in the long-run (as other countries expand output).

This official's proposal does not appear to reflect official policy, but it is significant that someone has begun a public discussion of environmental choices. Of course, this is China and appearances can be deceiving. As the story acknowledges, importing grain has always been a taboo subject and this story's appearance on grain market web sites is unusual. It's possible the story was planted by top officials laying the groundwork to open the market to "reasonable imports" of grain--one of the key points of the new food security strategy.

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