The world and the Philippines as Roilo Golez sees it. With focus on national security, geopolitics, geo-security, economics, science and government.
Monday, February 6, 2017
How is China feeding its population of 1.4 billion? CSIS
How is China feeding its population of 1.4 billion?CSIS
Food security is critical to the well-being of all countries. Fragile states are often those that are the most food insecure, as limited access to basic staples can undermine a country’s social and economic stability.
Decades of near double-digit GDP growth has enabled China’s leaders to make considerable strides in increasing food access across the country. Yet China’s economic boom has generated a new set of demographic demands and environmental strains that have affected its agricultural capacity. This feature explores China’s domestic production, the changing dietary demands of its public, and the role international trade plays in China’s food security.
Four decades of rapid economic growth has fueled a dramatic reduction in China’s undernourished population. Undernourishment is defined by the Food and Agriculture Organization (FAO) of the United Nations as the condition of an individual not acquiring enough food to meet the minimum dietary energy requirements for a year, and therefore serves as a key indicator for conditions of chronic hunger. According to the FAO, China’s undernourished population rate fell from 23.9 percent in 1990 to 9.3 percent in 2015. This reduction has occurred concurrently with rising per capita income levels that have soared by more than two-thousand percent over the same period.
This reduction in undernourishment facilitated China’s ability to reach the international hunger targets set by the United Nations. These targets were designed to halve world hunger by 2015. Of the twenty-nine countries that have met their respective goals, China’s achievements account for two-thirds of the reduction in undernourished people in the world’s developing regions over the last two years. An additional one hundred countries failed to meet their respective targets.
China has historically striven for domestic food production self-sufficiency. In 1996, the government issued a White Paper on the Grain Issue that established a 95 percent self-sufficiency target for grains including rice, wheat, and corn. China’s domestic production has for the most part increased to meet the country’s growing demand.
Over the past four decades, China’s grain consumption has more than doubled from 125 million tons in 1975 to 261 million tons in 2016. Considerable investments in agriculture have enabled China’s farmers to produce high volumes of staple crops, with China only importing a few million tons of rice and wheat per year. China often produces around the same amount of grain products as it consumes, resulting in a production-consumption ratio of roughly 1.0 since the mid-2000s.
Similar production and consumption trends exist in India, although in recent years it has grown increasingly reliant on rice imports. Although a noteworthy achievement for both countries, a major grain exporter like the United States produces between 1.5 and 1.7 times more rice and wheat than it consumes. Despite Brazil’s growing domestic demand for wheat, it still manages to produce nearly twice the amount it consumes. This ratio is even more pronounced in Australia, which boasts the most arable land per capita in the world, and produces more than three times as much wheat as it consumes.
With regard to meat products, China has witnessed an astronomical increase in consumption from a mere 7 million tons in 1975 to 75 million tons last year. China now consumes roughly 50 kilograms (kg) of meat per capita. This, combined with its massive population of 1.4 billion people, has made China the largest consumer of meat in the world. In terms of per capita meat consumption, China still falls behind countries like Australia and the United States (93 and 97 kg per capita, respectively), but well ahead of Japan’s 35.6 kg per capita. While domestic production has increased, meat imports have become an increasingly important component of China’s food security. China’s 3.6 million tons of meat imports in 2016 represents a several thousand percent increase from the mid-1970s.
China’s exploding demand for meat can be attributed to the changing nature of Chinese demographics. China’s ongoing economic development has sparked the largest urban migration in the history of the world, with an estimated 83 million – or 60 percent of China’s total population – expected to permanently reside in cities by 2020. By comparison, the World Bank estimates that India’s urban population will increase by 44 million in the coming years, accounting for just 1.7 percent of its total population. The rising income level of China’s growing urban middle class has corresponded with a shift away from a traditionally grain-oriented diet to an increasingly meat-heavy intake. Furthermore, urban residents have developed an appetite for other resource intensive foods, such as dairy products.
In response to China’s changing palate, the central government has encouraged intensive agricultural production. Since 1980, China has actively supported its feed-milling industry and subsidized the imports of more productive animal breeds. In 2012, China paid out $165 billion in agricultural subsidies. The next highest governments that supported agriculture through subsidies were Japan at $65 billion and the United States at $30 billion. Notwithstanding these efforts, China’s agricultural development leaves much to be desired, as it continues to tackle inefficiency and substandard-quality issues. For instance, farmers have been encouraged to grow on unsuitable land and have been subsidized to produce food that would be cheaper to import.
The twin challenges of maintaining economic growth while feeding its growing urban population with a countryside that features only 0.19 acres of arable land per capita has come at a heavy cost. The Economist Intelligence Unit ranked China 17th out of 25 in the sustainable agriculture category of its Food Sustainability Index. In the same index Germany ranked first and India ranked last.
The Global Food Security Index ranked China as 40th out of 113 countries in terms of food quality and safety.
China’s industrialization has also resulted in significant environmental damage, which greatly limits domestic production capacity. Industrial pollution has tainted as many as 13 million tons of crops with heavy metals. It is estimated that almost one-sixth of China’s land has been affected by soil contamination due to toxic runoff. Water scarcity is also a concern, as the government reported in 2014 that nearly 60 percent of China’s underground water is polluted and unfit for drinking without treatment. In 2013, widespread contamination of soil, especially in southern areas like Henan province, prompted the government to prohibit the farming of 8 million acres of contaminated agricultural land until it can be rehabilitated.
Such issues exacerbate the Chinese public’s suspicion towards the government’s agricultural regulation. The Global Food Security Index ranked China as 40th out of 113 countries in terms of food quality and safety. By comparison, the United States and Australia ranked first and fourth, respectively. Although India and China both have similar large populations and household food expenditure rates, India was ranked much lower at 80th in food quality and safety. The top ten in this category were all OECD economies.
Food safety incidents, such as the 2008 melamine-laced milk scandal and incidents of cadmium-laden rice, have further sowed distrust. In 2014, a Chinese survey revealed that 80 percent of respondents were upset about food safety. These issues have caused residents to pay a premium for alternatives such as organic or imported foods.
In recent years, the central government has enacted several new policies designed to address the multifaceted challenges of food security and sustainable development. Key among these efforts are:
China’s Thirteenth Five-Year Plan (2016-2020) emphasized improvements to efficiency and quality for modernizing the agricultural sector, as well as greater openness to imports and overseas food processing.
The Ministry of Agriculture and the National Development and Reform Commission announced plans for a capital-based push for public-private partnerships in agriculture in December 2016.
The Ministry of Health released new dietary guidelines in May 2016 that recommends a 50 percent reduction in the consumption of meat.
The Chinese State Council issued new guidelines on stabilizing grain production at 550 million tons by 2020, while placing greater emphasis on non-grain food quality than quantity.
Although only in the early stages of implementation for China, genetically modified (GM) crops may provide one potential solution to improve environmental resistance and enhance yields. China currently only permits the growing of GM cotton and papayas, but plans to open its agricultural sector up to other GM staple crops like soybeans and corn. However, GM development has been met with backlash. Public concern was raised over illegal GM corn unknowingly grown and distributed in Liaoning, drawing questions over regulation and security standards. In December 2016, Heilongjiang, China’s largest grain-growing province, issued a five-year ban on the growth, processing, and sale of GM crops. Such opposition at both the public and provincial level may undermine efforts to utilize GM crops to ease China’s increasing food pressures.
LOOKING ABROAD FOR FOOD SECURITY
China has become increasingly reliant on imports to offset its domestic agricultural limitations, prompting Chinese leaders to openly reframe their strategy for food self-sufficiency. At the December 2013 Annual Central Rural Work Conference, it was noted that China’s food security needed to be ensured by supplementing its “domestic supply with moderate imports.”
Food Imports/Exports of Largest Economies, 2015 | World Bank
% of merchandise imports
% of merchandise exports
For over five years, China has been the world’s largest vegetable importer, with soybeans constituting 64 percent of the country’s total vegetable imports in 2014. This drive for soybeans has been driven in large part by China’s rapidly expanding livestock operations, where soybeans are used as animal feed. Arable land scarcity and political emphasis on self-sufficiency in grain and other staple foods has resulted in a lack of agricultural capacity for soybean crops. Almost all of China’s soybean imports come from either Brazil (47 percent) or the United States (42 percent).
China’s efforts to capitalize on Australia’s available land have, however, faced resistance. Two separate companies were blocked by Treasury Secretary Scott Morrison from purchasing the country’s largest cattle business, S. Kidman and Co., whose holdings comprise 2.5 percent of total Australian land area – roughly the size of South Korea. In both cases, Morrison cited national interest as grounds for the decision.
Chinese investments in food production have also extended to the United States. In 2013, China’s largest meat processor, Shuanghui International, acquired American Smithfield Foods for $4.7 billion, marking the largest Chinese acquisition of a U.S. company in history. China, along with the United Kingdom and United States, now stands as one the three most active land traders in terms of trading partners in the world. At present, China has purchased or leased land in 33 countries, three more than the United Kingdom and five more than the United States. This strategy is indicative of a larger trend, whereby wealthier countries often acquire agriculture resources in poorer, underdeveloped states.
FISHING WATERS NEAR AND FAR
While fish has always been a staple of the Chinese diet, it is becoming an increasingly important source of protein. China’s per capita fish consumption grew at an average annual rate of five percent between 1990 and 2013. At 37.9 kg of per capita consumption, residents of China eat more fish than any other people, and significantly more than the world average of 19.7 kg.
To meet this demand, China’s global fishing activities have exploded. China is the largest producer of fish products, with 76.1 million tons of production in 2014. China is the world leader in terms of both aquatic capture (harvesting wild sea creatures) at 14 million tons and aquaculture (rearing and farming sea creatures in controlled environments) production, at 58.8 million tons. By comparison, Indonesia ranked second in total production with a harvest of 20 million tons.
The FAO reported in 2016 that China was “responsible for more than 60 percent of the world aquaculture production.” China supplied the rest of the world with over $20 billion worth of fish in 2014, which was roughly twice the amount of Norway, the world’s second largest fish exporter. Despite its tremendous production capacity, China is also the third-largest fish importer, as many countries outsource their fish processing to China. At a value of $8.5 billion in 2014, China’s fish imports were considerable but significantly behind the United States and Japan, whose fish imports totaled around $20 billion and $14 billion, respectively.
A substantial amount of Chinese fishing occurs in distant waters. Between 2000 and 2010, there was a yearly average of 1,800 Chinese fishing vessels operating in distant waters. According to a Green Peace report, this number jumped from 1,830 in 2012 to 2,460 in 2014. Chinese fishing boats have been spotted as far from its shores as Antarctica.
This boom in distant-water fishing (DWF) has led in part to the severe depletion of fishery resources within Chinese waters and is supported through subsidies granted by the government. The Chinese Ministry of Agriculture has stated there is “practically no fish” in the East China Sea. The nearby Yellow and Bohai Seas fare little better.
According to a two-year investigation by Green Peace, Chinese DWF boats have been found fishing illegally and falsifying their catch tonnage in the prohibited waters of Senegal, Mauritania, Guinea Bissau and other countries. While the West African coast’s fishing grounds are some of the most plentiful in the world, almost all are fully or overexploited by international fishing fleets. The African Union convened a summit on Maritime Security and Safety in October 2016 to discuss various maritime issues, including lucrative illegal fishing trade that generates between $10-23 billion annually.
China is the largest producer of fish products, with 76.1 million tons of production in 2014.
Further stirring controversy, a 2012 EU study found that Chinese fishing authorities had severely underreported their DWF while overreporting their domestic catches. From 2000 to 2011, it was estimated that China harvested roughly 4.6 million tons of fish per year in distant waters. This amounts to roughly 12 times more than the 368,000 tons officially reported to the United Nations. This and numerous other incidents of underreporting suggest a high degree of overfishing, raising concerns of fish recovery and future sustainability.
The actions of Chinese fishermen have also sparked a bevy of international disputes. In March 2016, the Argentina Coast Guard sank a Chinese trawler which it claimed to be fishing illegally in its waters. In October 2016, a Chinese fishing boat rammed and sank a South Korean Coast Guard boat, causing a diplomatic row that stalled bilateral efforts to crackdown on illegal fishing. Similar fishing-fleet incidents have occurred with some regularity in the disputed waters of the South China Sea, where China has used its coast guard and maritime militia to intimidate foreign fishermen and support the contested actions of Chinese fishermen. Chinese poachers in the South China Sea have devastated the delicate ecosystem. At Scarborough Shoal, fishermen have intentionally destroyed roughly half the total reef surface (approximately 58 square kilometers) in their efforts to harvest giant clams. As of January 2017, however, Hainan province has amended its Coral Reef Protection Act to include banning the processing and trade of giant clams under its marine protection laws. China recently passed new laws to protect giant clams and other species.