There has been a lot of discussion of food security issues in China in recent months.
In a January speech, Development Research Center vice director Han Jun noted that China's grain supply had become tighter despite nine consecutive increases in grain output and China's self-sufficiency rate had fallen to under 90 percent in 2012. "Grain" imports were 77 million metric tons last year. Soybeans accounted for most of the imports, totaling 58 mmt. Han pointed out that China was an exporter of soybeans until 1996 but it now imports 80 percent of the soybeans it consumes.
Han attributed the increase in imports to rapid dietary change, limits on natural resources and lower prices overseas. He recalled reading a report that said China had experienced an unprecedented dietary change. Over 20 years, fresh water fish production increased five-fold, poultry meat four-fold and pork output doubled. With this kind of upgrade continuing into the future, Han thought that China would need to utilize both domestic and foreign markets to satisfy demand. Han also called attention to the challenge of preventing atrophy of agriculture as the country urbanizes, citing worries about bankrupt farmers and emptying out of villages as people migrate to cities.
National Development and Reform Commission researcher Jiang Changyun is more optimistic. He defines away the problem by changing the "food" definition from the traditional Chinese definition of "grain" that includes cereal grains plus soybeans to just "cereal grains" to conform with the Food and Agriculture Organization definition. He points out that China was self-sufficient in rice, wheat and corn until the last few years and in 2012 imports were still less than 2 percent of consumption for rice, 4.4 percent for wheat and 3.6% for corn.
This week Liu Hanyuan, the chairman of one of China's largest feed companies, discussed food security while in Beijing for the Peoples Consultative Committee meeting. Liu expressed concern about pressure from the rising imports of grain and foreign dependence. Liu worried about the geographic reliance on imports from North and South America, asserting that grain trade is more concentrated than petroleum trade. This reliance, said Liu, makes China vulnerable to security risks if there are changes in the international political and military environment. Liu amplifies Han's recommendation by calling for more concentrated, commercial-scale farming and a steady increase in grain prices to give farmers production incentives.
Jiang Changyun provides the conventional justification for why China needs to be self-sufficient. He thinks that a big country like China must remain self-sufficient in grains because "whatever China buys becomes expensive, and whatever China sells becomes cheap." He implies that China's grain imports in 2012 were not problematic since they were a small share of world trade, but he asserts that the world wouldn't have enough grain to supply large Chinese imports. He points out that all the biggest countries--the United States, Canada, Brazil, Russia--are self-sufficient or nearly self-sufficient. Only Africa is below 90 percent self-sufficiency.
Well, if the rest of the world--maybe including Africa--could count on China being a regular customer they could ramp up production a lot more than Mr. Jiang realizes. Consider the example of soybeans. In 1991 when China's massive soybean import program was just a gleam in Deng Xiaoping's eye, world trade in soybeans was 28 million metric tons. Who would have thought the world would ever be able to supply China with nearly 60 mmt of imports--twice what total exports were in 1991? More surprisingly, China's imports haven't reduced imports by the rest of the world. Imports by the rest of the world are expected to be 33 mmt in 2012/13.
In a January speech, Development Research Center vice director Han Jun noted that China's grain supply had become tighter despite nine consecutive increases in grain output and China's self-sufficiency rate had fallen to under 90 percent in 2012. "Grain" imports were 77 million metric tons last year. Soybeans accounted for most of the imports, totaling 58 mmt. Han pointed out that China was an exporter of soybeans until 1996 but it now imports 80 percent of the soybeans it consumes.
Han attributed the increase in imports to rapid dietary change, limits on natural resources and lower prices overseas. He recalled reading a report that said China had experienced an unprecedented dietary change. Over 20 years, fresh water fish production increased five-fold, poultry meat four-fold and pork output doubled. With this kind of upgrade continuing into the future, Han thought that China would need to utilize both domestic and foreign markets to satisfy demand. Han also called attention to the challenge of preventing atrophy of agriculture as the country urbanizes, citing worries about bankrupt farmers and emptying out of villages as people migrate to cities.
National Development and Reform Commission researcher Jiang Changyun is more optimistic. He defines away the problem by changing the "food" definition from the traditional Chinese definition of "grain" that includes cereal grains plus soybeans to just "cereal grains" to conform with the Food and Agriculture Organization definition. He points out that China was self-sufficient in rice, wheat and corn until the last few years and in 2012 imports were still less than 2 percent of consumption for rice, 4.4 percent for wheat and 3.6% for corn.
Charts showing proportion of rice, wheat and corn imported last year.
This week Liu Hanyuan, the chairman of one of China's largest feed companies, discussed food security while in Beijing for the Peoples Consultative Committee meeting. Liu expressed concern about pressure from the rising imports of grain and foreign dependence. Liu worried about the geographic reliance on imports from North and South America, asserting that grain trade is more concentrated than petroleum trade. This reliance, said Liu, makes China vulnerable to security risks if there are changes in the international political and military environment. Liu amplifies Han's recommendation by calling for more concentrated, commercial-scale farming and a steady increase in grain prices to give farmers production incentives.
Jiang Changyun provides the conventional justification for why China needs to be self-sufficient. He thinks that a big country like China must remain self-sufficient in grains because "whatever China buys becomes expensive, and whatever China sells becomes cheap." He implies that China's grain imports in 2012 were not problematic since they were a small share of world trade, but he asserts that the world wouldn't have enough grain to supply large Chinese imports. He points out that all the biggest countries--the United States, Canada, Brazil, Russia--are self-sufficient or nearly self-sufficient. Only Africa is below 90 percent self-sufficiency.
Well, if the rest of the world--maybe including Africa--could count on China being a regular customer they could ramp up production a lot more than Mr. Jiang realizes. Consider the example of soybeans. In 1991 when China's massive soybean import program was just a gleam in Deng Xiaoping's eye, world trade in soybeans was 28 million metric tons. Who would have thought the world would ever be able to supply China with nearly 60 mmt of imports--twice what total exports were in 1991? More surprisingly, China's imports haven't reduced imports by the rest of the world. Imports by the rest of the world are expected to be 33 mmt in 2012/13.
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