Dim Sums: Agricultural Markets in China

Plans to build pig farms on cropland to alleviate China's meat shortage highlight mounting conflicts in a resource-poor food system. Earlier this year pig-farming giant Muyuan Group announced aggressive plans to build 84 industrialized pig farms in 13 counties surrounding its headquarters in Nanyang, a city in the hinterland of Henan Province. The plan stirred up controversy because 55 of the pig farms would be built on 1,000 hectares (2,500 acres) of "permanent cropland" designated by the government for producing grain crops.  In 2019, Muyuan produced over 10 million swine--making it China's largest pig producer. Its sales of hogs, feeder pigs, and breeding stock reached nearly 12 million head in the first nine months of 2020. Only 6 of Muyuan's 90 branch companies are located in Nanyang, according to the company's semi-annual report. This month, Muyuan announced projects in counties of Anhui, Hubei, and Liaoning Provinces. In late August, state media's ...

Muchuan County in Sichuan Province illustrates China's efforts to simultaneously boost the meat supply and fight poverty on the fringes of the Middle Kingdom. A featured prong of China's "precise poverty alleviation" initiative is to recruit companies that boost local specialty industries in the impoverished hinterland. Incorporating poor farmers into modern supply chains that tie "small farmers" into "big markets" is the initiative's core. A stream of propaganda articles over the years described initiatives to promote swine-farming in a mountainous Leshan region of Sichuan Province as a "precise poverty alleviation" strategy. An article this month recounts construction of giant swine farms in the county by a half-dozen prominent companies and restocking of farms with local government subsidies to achieve the numerical targets for restoring hog production in the counties of Leshan.  A September article promoted another poverty allevi...

Chinese officials are on alert for transmission of covid-19 via imported meat and seafood. With imports filling a meat shortage of epic proportions this year, testing, disinfection and other precautious could keep meat prices at record highs for a little longer. Chinese officials stepped up surveillance of imported meat when a worker at the port of Tianjin tested positive for covid-19 on November 8, four days after unloading a shipment of imported frozen meat. The worker was hospitalized and 156 of his coworkers and neighbors were tested (results not released yet). Officials in China have been on guard against transmission of new covid-19 outbreaks through frozen food most of this year, following covid-19 outbreaks at meat processing plants in exporting countries such as Germany, the United States and Brazil.  On November 6, local officials in Dezhou, a city in northern Shandong Province, tested a shipment of German pork knuckles and found four samples with weak positive covid tes...

China's national grain reserve company signed a soybean purchase agreement last week that exemplifies Xi Jinping's approach to creating an "open" economy: create compliant Chinese behemoths big enough to negotiate deals that neutralize the "unfair" advantage of multinationals.  On November 6, 2020, China's national grain reserve corporation, Sinograin, signed a soybean purchase framework agreement committing to purchase soybeans from Brazil and Argentina. Suppliers signing the agreement included the so-called "ABCD" grain traders--ADM, Bunge, Cargill, Louis Dreyfus--plus China's COFCO International, ECTP (Engelhart Commodities Trading Partners), state-owned chemical giant Sinochem, and Sinochem-owned Swiss seed/chemical manufacturer Syngenta.  The announcement of the soybean purchase agreement was a piece of political theater to promote Xi's "opening" initiative. The announcement revealed no details of the agreement. The arti...

China's Xinjiang "Autonomous" Region is the world's biggest cotton-producing region, but its cotton farms depend on billions of dollars in subsidies to keep them viable in what is also one of the world's most remote regions. Depressed cotton prices this year are inflating the subsidy bill, but officials grudgingly pay the tab to support this "pillar" industry, maintain stability on the fringes of the empire, and avoid relying on cotton imports from unfriendly countries. Rising wages generally spell trouble for production of cotton, one of the most labor-intensive field crops. China's farmers were eager to grow cotton when they were poor in the 1990s, but they have been quick to abandon the crop as wages grew. Cotton production fell in eastern and central regions, and increasingly concentrated in the Xinjiang region bordering central Asian countries where yields are higher, there are fewer alternative crops, and where the government was willing to spe...