Dim Sums: Agricultural Markets in China

China is on the verge of allowing imports of Brazilian corn. Many observers think China-Brazil negotiations were pushed along by China's expectation of disrupted corn supplies due to the war in Ukraine. If so, the move illustrates China's hijacking of scientific negotiations on pest and plant disease risks for economic and political purposes, the kind of behavior that an earlier generation of trade negotiators tried to stamp out when they set up the WTO trading system. "It was a strategic consideration by the State to diversify import origins," an anonymous China-based trader told Reuters . A commentary by Chinese market analysis group Mysteel  attributed the Brazilian corn agreement to the risk that a relatively "stable" corn import pattern could be disrupted by the war in Ukraine.  What they meant is that Chinese authorities face the prospect of having to import nearly all their corn from the United States if Ukrainian corn supplies are disrupted. Authorit...

Chinese investment in agriculture around the world is not the unstoppable "land-grabbing" juggernaut often depicted by news media and NGOs. A recent article identifying difficulties encountered by Chinese outbound agricultural investment indicates that the companies are often ill-prepared to do business outside China.  An April 2022 article by the China International Economic Exchange Center repeats a series of complaints cited in other articles over the past decade that, arguably, arise from the insular nature of China's own agribusiness sector: a shortage of personnel with language skills, little understanding of foreign cultures or business practices in the host country, failure to interact with local business and government leaders, and lack of experience with international accounting, finance, law and tax practices. Some related anecdotal evidence not cited in the article: when Chinese companies hire foreigners with international skills and knowledge they are typica...

After African swine fever (ASF) virus landed in China in August 2018 it swept through every province of the country within a matter of months. Farmers killed off entire herds and even sent their sows to slaughter to prevent the virus from getting them. Monthly reports from the Agriculture Ministry indicate that the number of sows fell by 55%--from 44.7 million head in December 2018 to under 20 million in September 2019. Yet, the number of finished hogs slaughtered for commercial sale fell by only 24%. Even more remarkably, China's agricultural officials reported in 2021 that the number of sows and the swine inventory had essentially recovered to normal.  China's Central Television reported in October 2021 that the number of sows had more than doubled from a low of 19.1 million in September 2019 to 45.6 million in June 2021.  Sow inventory is level at the end of the previous year. Data from China's National Bureau of Statistics.  Most commentators thought it would take ...

Chinese officials are demolishing livestock farms again now that a meat shortage has turned to glut. In April 2022 China's central disciplinary commission posted an article  warning village and town officials they could be reprimanded or fired for complicity in illegal use of farmland. Two of four cases of illegal use of cropland from Anhui Province circulated by the commission were cases of illegal hog farms built in 2020 when the government was pushing local officials to expand hog production as fast as possible to alleviate a pork shortage.  One illegal Anhui hog farm was built by a village official in July 2020 on 1.93 mu (less than a third of an acre) of land. The official continued building the farm after receiving a warning that the project did not comply with the local land use plan. The official was reprimanded and removed from his post for ignoring warnings despite being responsible for enforcement of local land use regulations. In another village, the party secretar...

In a socialist country where farmers are just borrowing the land from the State they do not have the right to decide how they will grow and sell their crops. The State can change its mind and make up regulations on the spot on a document no one has read.  China's agriculture ministry was outraged early this month by reports that some farmers have been cutting their wheat fields a month before harvest to sell as silage for animal feed. The Ministry was responding  to online videos advising farmers to cut down their wheat to be chopped up and fed to cattle. The Ministry sent out investigation teams to ascertain the extent of the practice, instructed local officials to investigate the "destruction" of wheat fields, and promised to investigate those who violate unspecified regulations. Henan Province immediately issued an emergency document banning the sale of wheat for silage. Truck loaded with wheat chopped for silage. Securities Times explained that silage is an animal f...

China has tasked a new network of field bosses (田长) with watching for misuse of farmland as new statistics revealed huge losses of cropland in many provinces. The new system selects key people in village groups--the most basic rural unit--to watch over "permanent farmland" to ensure it is not converted to nonfarming uses or planted with non-grain crops. These grassroots field watchers report up to a field boss at the administrative village, who reports to a township field boss, who reports to a prefecture field boss official.  The new farmland-watching system was launched in 2021 after a new national land survey discovered that China's cultivated land base was 5 percent less than had previously been reported in statistics (see table below). Many southern provinces had their cultivated land area cut by 20-to-30 percent after the survey. Major agricultural provinces like Shandong (-15%), Henan and Hebei (-7% each) had reductions. Top rice-producing provinces Hunan and Jiang...

In widely circulated videos choruses of hungry and frustrated Shanghai residents  shouted from windows their requests to "give us food " and banged pots in unison  after 5 weeks of virus-prevention lockdowns and food shortages. Beijing citizens have already cleaned out supermarkets in anticipation of their own lockdown. Meanwhile, China's food reserve seems to be missing in action and its leaders are preparing for an apparently even more serious imminent and unnamed disaster. Chinese authorities have assured us that regulations require Chinese cities to maintain a 6-month supply of food reserves.  Propaganda circulated in 2020  recited the 6-month requirement for food-deficit regions and 3-month requirement for grain-surplus regions to head off food hoarding during the first round of covid lockdowns two years ago.  Another 2020 article claimed to refute "rumors"  about insufficient food reserves by citing a 910-million-ton reserve storage capacity and annu...