A More Confident China Opens Up To Farm Trade

THE BridgeNews FORUM: Viewpoints on farming, farm policy and related agricultural issues.

October 8, 1999

CHURCHVILLE, Va.--The world's hard-pressed export farmers have just gotten about the best news possible. China, the world's biggest potential importer of farm products, announced that it will start relying more heavily on grain imports.

A senior Chinese official says China may buy 30 million to 60 million tons of grain a year over the next few decades. The U.S. Department of Agriculture thinks China will buy more than that.

The Chinese decision won't raise depressed world grain or meat prices this year, but it underscores the long-term importance of Asian exports to farmers in North America, Europe, Australia, New Zealand and Latin America.

During the past 20 years, China produced nearly 99 percent of the grain it consumed. Food security--meaning enough rice for its people--has long been a driving force in Chinese politics.

That drove China in recent years to push grain plantings too far onto the arid lands of its western provinces and to clear too many forested slopes in its southern lands.

The disastrous floods of 1998 have driven food self-sufficiency far down on Beijing's priority list.

When I shared a podium with China's minister of agriculture in Beijing three years ago, he proclaimed "China will produce its own food."

But now a senior Chinese official, Ma Xiaohe, says China has paid too high a price for food self-sufficiency.

Ma Xiaohe, vice director-general of the powerful State Development Planning Commission, recently wrote that Chinese grain imports should rise over the next 10 years from about 1.4 percent of national consumption to 5 percent, growing to 10 percent by 2030.

In a paper published by the Paris-based Organization for Economic Cooperation and Development, Ma wrote, "It can be seen from the experience of other countries that a high level of grain self-sufficiency has nothing to do with food security. Food safety and security can be achieved if a country can provide enough purchasable goods."

His statement is obviously true, but until recently it was not politically acceptable in China to admit it.

It may be no accident that the same week Ma's paper was published, China announced it would relax its harshly administered one-child policy, which has caused so much global criticism of the Chinese government and so much anguish to Chinese families.

Both policy changes indicate the Chinese government is feeling more secure about its enormous economic and technical progress.

China's confidence has increased because of its success in weathering the recent "Asian collapse" without a major drop in its economic growth or the value of its currency.

Consumer incomes have soared from near-starvation levels in 1978, before Chinese leader Deng Xiao-ping unleashed economic liberalization, to the equivalent of over $3,000 a year.

Today, millions of Chinese families have more than $10,000 in buying power and can afford delicacies like meat, ice cream and sweet rolls.

Importing grain will allow China's own farmers to produce higher-value products from its scarce farmland like fruits, tobacco and dairy cows.

Only about 10 percent of China's huge land area is arable, leaving only 0.08 hectare of farmland per person (about one-fifth of an acre). The United States has 10 times as much per capita. Chinese farming is already carried out with fierce intensity with high-yield seeds, double- cropping and heavy use of fertilizers.

Making food production even more difficult, the tropical storms that bring most of China's rainfall often dump too much rain or too little, so floods and droughts occur often. As a result, China has had hundreds of weather-induced famines over the past 500 years.

Agricultural experts have long felt that an affluent China would import large quantities of food.

China's meat consumption doubled to more than 60 million tons in the amazingly short period between 1990 and 1996, according to the U.N. Food and Agriculture Organization, based in Rome.

Meat consumption continues to escalate with the country's income levels. Meanwhile, consumers are also demanding more milk, sugar, beer, fruit, baked goods and farm commodities.

The Chinese turn to imports might have come even sooner if not for a frightening book, "Who Will Feed China?" published in 1995 by Lester Brown of the Worldwatch Institute, a Washington-based environmental group.

Brown, long known for his (false) predictions of global famines, warned that China might need to import as much as 300 million tons of grain per year!

Brown predicted declining Chinese grain yields and huge losses of farmland to urban uses. He claimed Chinese imports would create food shortages for all countries in the world while bankrupting the Chinese economy.

In reality, Brown was being more than a little silly. Why would China continue to buy feed grain for meat production if shortages were driving world grain prices to untenable levels? And if grain prices were not being driven into the stratosphere, then that would mean there was no world shortage.

Will the relaxation of the one-child policy mean even more Chinese consumers eating imported grain? China has 1.3 billion people and expects a peak population of 1.6 billion in 2050.

But export farmers can also expect a wealthy China to have more than 500 million pet cats and dogs cheerfully chomping down imported food as well.

Nobody knows how much grain China will ultimately import. However, export farmers can be assured China will far exceed its current rate of 60 million tons a year. They can also feel sure that, doomsayers notwithstanding, China won't be able to buy up all the world's grain no matter how rich it gets.

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