Thursday, April 16, 2009

China is mostly self-sufficient in the crops it considers key to its food security: rice, wheat and corn.

TO BE NOTED: From the FT:

China sows seeds of food self-sufficiency

By Javier Blas and Geoff Dyer

Published: April 16 2009 17:29 | Last updated: April 16 2009 17:29

China's agricultural growth

Ever since China entered its phase of high economic growth 30 years ago it has faced apocalyptic warnings that its huge population and rising wealth would lead to food shortages.

By and large, these warnings have turned out to be wide of the mark.

China is mostly self-sufficient in the crops it considers key to its food security: rice, wheat and corn. Nevertheless, its agricultural trade balance has moved from the small surplus of the 1990s to a large deficit as it has become the world’s largest buyer of soyabeans, only partially offset by exports of vegetables, fruit and seafood.

Yet while the worst fears have been avoided and the country weathered last year’s food crisis better than others, Beijing still has to feed its population with limited fertile land, scarce water and the threat of climate change.

Given China’s size, if these problems are not addressed they will have huge effects on global agricultural markets as Beijing will have to import large amounts of food products, tightening markets and sending prices higher.

At a time of heightened concerns about food security – illustrated by this weekend’s first Group of Eight ministerial meeting on agriculture – Beijing’s challenge is a concern at home and beyond. The G8 has warned that, without a doubling of spending by 2050, the global food crisis “will become structural”.

So far China’s response to the global and domestic challenge has won praise. “Beijing recognises the strategic need of investing in agriculture,” says David Nabarro, head of the United Nations’ taskforce on the global food security crisis, echoing a view widely held by other experts interviewed by the Financial Times.

Shenggen Fan, an expert at the Washington-based International Institute for Food Policy Research and professor at Nanjing Agricultural University, adds that China’s policy reaction was spurred by the food crisis, which emerged in 2007.

“The global food crisis gave China a lesson,” he says, adding that Chinese policymakers realised they had to pay even “more attention to food security”.

China said this year it would remain almost self-sufficient in wheat, rice and corn until at least 2020, when it hopes to produce 540m tonnes of grain a year, up from last year’s 470m tonnes.

To achieve its goal, Beijing increased its agriculture budget by 27 per cent in 2007, another 38 per cent last year and a further 20 per cent this year, boosting spending on agricultural research, infrastructure and farmers’ subsidies. No other big country, barring India, has increased spending on farming so much.

Even so, the planned output increase presents a big challenge, experts say.

In the short-term, water scarcity, loss of fertile land and slowing agricultural productivity growth will be the key problems. The US department of agriculture estimates that China feeds 20 per cent of the world’s population with just 10 per cent of the world’s agricultural land and about 6 per cent of the world’s water resources. In the long-term, the impact of climate change will be critical.

China is already suffering from acute water shortages in its breadbasket north. Beijing and Tianjin, the biggest northern cities, have access to less water per capita than Israel or Jordan. Ma Jun, an environmental activist, says water shortages and temperature increases in north China have already damaged wheat and corn production.

“For rice, it is even worse. Rice can hardly be planted in the area because of water shortages,” he says.

In recent decades Chinese farmers have made extensive use of groundwater and millions of wells have been drilled. But overuse has led to the water table falling sharply and, at the same time, pollution from factories that seeps into rivers has become a pressing problem.

Fertile land is also scarce as expanding industries and cities have engulfed the countryside, forcing the government to impose restrictions on development on farmland.

Despite all these challenges, Mr Fan believes China’s recent high investment in agricultural research and infrastructure will help to boost productivity. He mentions previous successes such as the development of “super rice” – which increased production per hectare drastically using the same amount of water than conventional rice.

But past successes do not guarantee that China will be able to overcome present challenges, say other experts. In the current climate of food security concerns shared by all the G8 countries, many outside China remain wary.

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