Having enough to eat and being safe are common goals of humans, and people will achieve the goals only through scientific policy-making. President Xi Jinping has given top priority to food security and come up with the national food security strategy that China needs to mainly rely on its own agricultural production, focus on domestic markets, ensure productivity, import moderately, and seek for science and technology support.
In related remarks, Premier Li Keqiang told the UN Food and Agriculture Organization recently that the Chinese have always been pursuing a principle of food being the paramount necessity, so the country will try its best to become self-sufficient in food by relying on its own production, all of which shows that the Chinese leaders are clearly paying attention to ensuring food security in national governance.
China, with its large population, has worked hard to make sure that its people have enough to eat and have confidence about their food. It has had some significant results, with grain yields increasing 98 percent between 1978 and 2013, oil output up almost 6-fold, fruit 37-fold, and aquatic products more than 12-fold. Its meat production rose 86 percent, from 1996 to 2013, eggs, 46 percent, and dairy products nearly 4-fold. Now, the variety of food in both urban and rural markets also gives consumers more choices. So, China is trying its best to give its people both sufficient amounts and greater variety of food, and is improving food safety by making more than 97 percent of its agricultural products conform to quality standard in 2013, and 97.3 percent in the first three quarters of this year. Food safety supervision and random checking pass percent also goes above 90 percent.
In spite of all this, we need to be aware of the fact that we lag behind in food security and food safety, and in the capacity to guarantee them. It is a challenging task in meeting the needs of urban and rural people.
In quantity, the demand peak is yet to come, but population, urbanization, and incomes all influence total grain demand and all three will continue to grow for a period of time and could likely increase major agricultural product consumption. Although there is a lot of disagreement about China’s total population among academics, the peak is expected to hit about 1.4-1.5 billion, meaning another 40-140 million people, from the 1.36 billion at the end of 2013. If we calculate total grain demand based on the current average of 400 kg per capita annually, the population increase alone will lead to a grain demand of 16-56 billion kg. China's urbanization rate is calculated at only 36 percent on basis of registered population, and just 53.7 percent on basis of permanent residents, which is far below the average of 80 percent in developed countries. And, as China's economy grows urban and rural incomes increase, meaning a decrease in grain consumption but an increase in animal products. So, total grain consumption will increase during the period when people have enough to eat and wear but the food consumption structure hasn’t been adjusted to the right place. Based on food consumption in Japan and Republic of Korea, where they are similar to China in their diets, as the per capita GDP reached $20,000, the food structure was balanced, but China’s per capita GDP lags far behind them. China is expected to continue its increase in population, have an urbanization rate of 70 percent, from the current 50 percent, and become a high-income country so its consumption of animal products, such as meat, eggs, milk, and fish, will grow and grain demand will continue to grow.
In the area of food quality, as incomes, living conditions, and health awareness improve, urban and rural people are placing higher demands on food quality and safety, and are looking more for variety, quality, and safety. But, because of its backward production and management, lack of credibility, and poor market controls, food safety in China faces a lot of problems. Due to its large population but land limitations, China needs more intensive agriculture and agricultural chemicals to increase per unit yields, which might lead to problems. China has more than 200 million peasant households, 400,000 food enterprises, three million food operators, and a large number of individual food sellers. Because food safety is specialized technical work, it is hard to monitor, and it is unlikely that there will be full information sharing among supervisors, manufacturers, operators and consumers. Each link of the food safety chain could cause problems. And we're now living at a time when local problems can spread rapidly and cause much larger problems. In the past few years, food safety has become a major headache, so strengthening the monitoring process to ensure food safety is a real challenge for a long run.
If we consider production costs, what appears to be China's comparative advantage in grain production becomes weaker. Grain production costs have risen rapidly in the last few years because of industrialization and urbanization, with average annual land costs for staples, such as rice, wheat, and corn, increasing 15.7 percent, while labor costs are up 10.4 percent, and materials and services, 8.7 percent, all of them rising more than prices, at 7.3 percent, leading to a dramatic decline in profits from grain. And, the industrialization and urbanization have not finished, while grain production costs in labor, land, materials, and services will go up and will not be offset by technological progress. Meanwhile, the price of major grains in China is higher than the CIF price of imported grain after tax. So imports appear to be a likelihood in the future, so, production costs and import increases will make it even harder to develop domestic grain production.
In the area of resources and the environment, grain production also faces constraints, although it's good that China will see an increase in its grain harvests this year, for the 12th consecutive year, but we need to be aware that China's agriculture is overworked and that the current grain capacity paid an environmental price. China's use of chemical fertilizers and pesticides exceeds the world's average per unit use by too much, and is way beyond reasonable. Nearly half of the residue goes into the soil, causing pollution. And, because of the long over-pumped underground water of the North China Plain, large funnel-shaped areas have formed.
And, around 3.33 million hectares of moderately or heavily polluted farmland are still being used, most in high yield areas. And more than 4 million hectares of steep slopes and 2.67 million hectares of severely desert-like land are under cultivation, in addition to many wetlands. These pose a real threat to China’s ecological security and the sustainable development of agriculture, and they have an impact on food quality and safety, and ultimately can harm people’s living environment, quality of life or their health. And because the impact on the ecology can’t be recovered in a short period of time, we need to eliminate these harmful ways and rehabilitate our agricultural land, while holding the effect on national grain output to the minimum. For a large, developing power with almost one-and-a-half billion people this is a serious problem.
A basic way to face these challenges is through agricultural modernization via reforms and innovation, so, the Third Plenary Session of the 18th Communist Party of China (CPC) Central Committee decided to increase reforms and the Fourth Plenary Session of the 18th CPC Central Committee put it into law. So, China needs to improve its food security guarantee ability, carry out agricultural reforms and follow the law, especially in the following areas:
First, through innovative agricultural production and management as well as different varieties of management. China's household farms are too small, something that has to be dealt with because of the rise in production costs and food security control at the source. One way is to expanding agricultural management for better labor productivity, controlling costs, standardizing production and reducing food risks. China has 870,000 family farms, with an average area of 13 hectares, and over 1.1 million farmer cooperatives, a main force for agricultural modernization. Grain production should be adapted to the urbanization process, rural labor movement, technological progress, means of production, and social services, with different types of management. China needs to increase its rural land reforms, accelerate the confirmation, registration and certification of contract land, and separate land ownership, contract rights and management rights, and should provide guidelines for farmers working in non-agricultural area or who settle in urban areas, to transfer their land rights for peasant households staying in the rural area and hoping to expand their farming. It is also important to improve agricultural services system for farmers, in information, technology, purchasing, sales, financing, and machinery.
Second, through scientific and technological progress and its use in food security. In the past few years, China has increased the application of agriculture science and technology, contributing to a growth of as much as 55 percent, with main crop cultivation and harvesting becoming 59-percent more mechanized and fine breed rate above 96 percent. Science and technology have become key methods to increase grain output and ensure food security, and their contribution will continue to rise as developed countries see the contribution at 70-80 percent, and even above 90 percent. China needs to improve its agriculture reforms in relation to science and technology, its industrialization, schooling, and research cooperation, with more input in ag-science and technology, and increase protection of agriculture intellectual property rights, improve innovation incentives system, and attract fund. It is also important to cultivate scientific and technological talent.
Third, through ag-ecological and environmental protection methods and improved food production sustainable development. The Chinese government has had a goal of ecological progress and a solemn commitment to future generations. As agricultural sustainable development is an important part of China's ecological efforts, a sustainable ecological environment is a vital goal for modern agriculture. China needs to tap its grain production potential while takes resources and the environment into consideration, and try to develop resource-saving, environmentally friendly agriculture. It needs soil pollution controls, find out major pollution areas through environmental risk assessments, come up with methods in accordance with the degree of contamination, and adjust crop planting. It also needs greater water efficiency in agriculture through water pollution controls, especially in funnel-shaped groundwater area in North China. And, it needs a new round of returning grain areas to forests, tree planting, desertification prevention, and wetland protection, and an eco-compensation system that covers forests, grasslands, wetlands, water and soil, as well as raise ecological benefit compensation funds from multiple channels.
Fourth, through better production and supervision Mechanism. As President Xi Jinping said at the Central Conference on Rural Work last year, whether or not the government can ensure food security is a big test for its governing capacity and, to pass the test it has to rely on the stricter food supervision across the whole food production process, on improved laws and regulations, and on a perfect standard system. China needs to enforce the law strictly and make law breakers pay the price for what they do. The country needs better food safety supervision to deal with the problem of unclear areas of responsibility, supervises local governments to shoulder their responsibilities, improves supervision at the grassroots level, and cracks down on food safety crimes. In doing this, it can encourage greater participation and management of food safety by getting governments, enterprises, consumers and the news media involved and can use the law, culture, science, and technology to play a role.
Fifth, through the innovative use of domestic and foreign markets and resources to open greater food security channels. The Decision on Major Issues Concerning Comprehensively Deepening the Reforms passed at the Third Plenary Session of the 18th Communist Party of China Central Committee called for a new, more open economic system for free flow of international and domestic factors, more efficient allocation of resources, and integration of markets. Agriculture will also use the decision for further planning. Because China has so many people but little land and water resources, it has to use international markets and foreign resources more. In fact, China's accession to the WTO shows that gradual growth of imports can lead to a winning situation. For instance, China’s increased soybean imports have driven soybean production in the US and even globally. And, it helped meet the Chinese market demand, saving land and water resources.
China needs to maintain the open, transparent, fair import of agricultural products that it badly needs and it needs to give the world a clear, stable prediction of its food needs and avoid a negative impact on domestic production and international markets. In addition, it should increase ties with major agricultural product partners, sign mid-to-long term grain agreements, and build stable, diverse import channels. China can also develop its advantages and increase aid and investment in neighboring countries, or in South America or Africa, in agricultural technology transfers, processing, storage, transport, and trade. and fulfill its social responsibility. China should also use the networks of agricultural multinationals and their risk management and encourage cooperation with them, to link domestic and global networks to ensure food security around the world. It also needs to participate more actively in global food security, implement food aid commitments, and use different methods to tackle the global food crisis through finance, trade, aid and environmental protection.
Sixth, through changing food consumption ideas and developing food consumption structure that suits China's resources and culture. Even though China is changing its food consumption with more animal products for better nutrition and physical health, the number of unreasonable, unhealthy dietary habits is growing, while malnutrition coexists, along with over nutrition and related diseases increase. A reasonable diet is good for health and helps ease the food supply pressures so China needs to give people guidance in reasonable consumption in a scientific way, following the better food traditions of eating mostly vegetables with a moderate degree of animal products, to make Chinese food culture innovative and prosperous.
This is an excerpt from a speech by Li Wei, minister of the Development Research Center of the State Council, at the 2014 China’s Food Security and Food Safety Strategy Summit, in Beijing, on Nov 7, 2014.
Author: Li Wei, research fellow, minister, Development Research Center of the State Council
Source: China Economic Times, Nov 13, 2014