Prc policy on food security

The problem of food security remains one of the burning issues in China at this stage. Experts predict that in the near future

China will face new threats and challenges relative to food security, including the negative effects of population growth, lack of arable land, fresh water supply problem, the difficulties in the procurement system, as well as the growing needs of the population (consumerism).

Communist Party of China, the State Council and other senior government authorities of the country pay great attention to this issue, as long as they realize that the prospects of stability for Chinese society largely depend on how successfully the tasks to ensure the country’s food security will be resolved.

The presented report discusses the status and prospects of China’s food problem and provides practical suggestions for strengthening food independence of Kazakhstan on the basis of the Chinese experience.

Food security issues in China

According to the world statistics agencies, in the past decade, China maintained fairly stable and high level of food security. The country has provided self-sufficiency upon the principal crops from 91 to 97% of domestic consumption. As a result, China implements the recommendations of the Food and Agriculture Organization

of the United Nations, which calls for support of food self-sufficiency at a level of 95%.

However, China has a dependence on import of certain product list. Today, China feels the strongest demand for soybeans, vegetable (soy) oil and grain crops (rice, wheat). China exports mainly fruits, vegetables and meat.

Until now, the Chinese government has succeeded in maintaining the required level of food security. However, due to various factors, China may face the threat of food shortages in the country in the nearest future. In the opinion of the Chinese researchers, the key issues to ensure food self-sufficiency in China liein internal difficulties.[1] [2]

During 2012, the specialists of the Academy of Social Sciences of the PRC have conducted a comprehensive research to identify the most pressing problems in the food sector, among which the following 4 points are highlighted:

► The reduction of arable land. Urban

growth and the consequent deterioration of the environment are the main reasons for the rapid reduction of arable land. Urbanization is often the biggest obstacle to the growth of agricultural production due to problems of land dispossession. Farmers are usually paid compensation for confiscated land (at an average

of 1.5-2 thousand U.S. dollars per family) but upon spending the money, the farmers are left with nothing. On this basis, the Government of PRC back in 2008 on the 3rd CPC Central Committee plenum of the 17th convocation came to principal decision to keep arable land at a level of not less than 1.8 billion mu (120 million hect- ares).[3]

  • Climate change and, as a consequence,

reduced crop yields, soil degradation. According to forecasts of the international environmental organization “Greenpeace” for the next 20-50 years, climate change will have a significant

impact on agricultural production in China. Increase in air temperature, reducing the amount of water for irrigation and other negative factors will lead to a reduction in the gross grain harvest in China to 14-23 %. Climate change can cause soil erosion, impair the ability of agricultural ecosystems to withstand natural disasters, can lead to the spread of pests.

  • Acute shortage of water. One of the reasons

for the reduction of arable land and the whole key issue of food security is the lack of water resources in China. Today, water consumption in China is more than 600 billion cubic meters per year, of these, water shortages is 50 billion cubic meters per year. According to the Ministry of Water Resources of PRC, currently there are only 2100 cubic meters of water per capita per year, or about 28% of the international average indicator. In 2012, the problem of clean water became particularly urgent for Chinese regions affected by severe drought — Sichuan, Yunnan and Inner Mongolia. Meanwhile, most of China’s rivers are seriously polluted and unsuitable for use.

  • Increased import of grain. In 2012, China

collected 120.6 million tons of grain, but at the same time, about 14 million tons were imported from abroad. According to FAO, the UN, maize (37%), wheat (26%), barley (18%) and rice (17%) dominate in the structure of China’s grain imports in 2012. China is still the largest importer of American grain corn. In particular, in 2010, China became the main buyer of corn in the U.S. According to forecasts, in 2020 the Chinese corn imports may reach 20 million tons. According to experts of the Institute of the World Economy, Shanghai Academy of Social Sciences, China’s dependence on external supplies of grain is one of the challenges in terms of food security.[4]

As already stated, at this stage, in addition to grain imports, China imports kinds of products such as soybean and vegetable oil. This issue has traditionally been a topical issue in the agenda of the NPC and CPPCC meetings; in particular, in March this year, Chinese parliament deputies once again drew attention to the task of ensuring a stable supply of these products.[5]

Special attention should be given to the situation with the increase in import of rice. China, as one of the largest producers of rice, has started buying the product from abroad. According to China Customs, in 2012 the country increased import of almost four-fold — to 2.32 million tons. According to the Ministry of Agriculture of PRC, China’s import volumes of rice, despite the sharp increase, are still scanty on the background as indicators of its production in the country (1.6%), so the world trade of the product (6.2%).

Reasons for increased volumes of imported rice lie in the fact that the state is forced to buy rice produced by Chinese farmers at overprices, to support domestic production, although this product, imported from Thailand, Vietnam and Pakistan is much cheaper. Ministry of Agriculture of PRC acknowledges that last year the rice in China cost significantly

higher than in Vietnam and Pakistan due to the appreciation of yuan and sustainable growth in domestic prices. Importers in such conditions increasingly prefer to buy rice in neighboring countries, where it is sometimes cheaper by half, and then sell it with profit in the domestic market.

Thus, taking into account the potential and real threats to food security in China, the country’s authorities undertake comprehensive measures. One of the most effective instruments of state regulation in the agricultural sector is the system of investment. Consolidated budget of China’s Agriculture is formed from 4 sources: direct state funding; loans through state-owned banks; resources of collective farms in the village, and the funds received from the taxation of peasants, farmers’ households.

At this stage, improving tax policy in the countryside is considered in China as a factor of successful reform of the socio-economic sphere in agriculture.

At the same time, food prices in China are determined by the market, but under the supervision of the state, which ensures their stability and the required level. For these purposes, backup and insurance food funds were created as stabilizing measures, especially for the period of natural disasters and crop failure.

At the same time, the Chinese authorities take comprehensive measures to protect and promote safety of food products. High risks in the food sector are increasingly worrisome in Chinese society. Regulation of standards and legal systems of food production will become priority measures, as well as effective supervision and punishment for those who violated the law. State agencies will check food enterprises. Factories, which products threaten the health of people, will be closed. This, according to the State Council of China, can improve the food security situation in the country over the next three years.

Thus, at the moment China is facing a number of challenges on the way of achieving the desired level of food security. As acknowledged by the Chinese authorities, the rapid process of urbanization is the main reason for the gradual decline in agricultural productivity of the country. In other words, along with a critical reduction of arable land, there is rural exodus to the big cities, which in turn leads to poor performance in agricultural production.

Practical suggestions. In accordance with the problems, mentioned in this article, existing in the area of food security of China, we pay attention to the following suggestions and practical recommendations.

Today, we can speak of absolute food security only in respect of the seven states. China is not included in this list, as well as Kazakhstan. According to the statement of former Minister of Commerce Chen Deming, despite the fact that crop production in China is growing, the demand for these crops are growing even faster. On this basis, it can be assumed that the foods demand in China (including their imports) would only increase.

  1. Today, the main supplier of wheat to China is Australia (65% in 2012), the major parties are imported from the USA (17%), Canada (11%) and Kazakhstan (6%). In order to expand exports of crops to China, there should be a closer look at China’s domestic market. In particular, the greatest need of the Chinese population is in soybeans imported from abroad. It is appropriate to recommend agro business entities to cultivate this crop with its further sale on the Chinese markets;
  2. Significant problem is the importation of poor quality agricultural products from China. Despite the tight control of the food industry in China, the rules and norms of production are quite often violated during the exportation. It’s not uncommon, when banned substances are added to animal feed, packaging materials contain toxic substances, the quality of children nutrition and health products do not meet the certification requirements.[6] On this basis, it is necessary to tighten control of imported products from China for compliance with environmental regulations and standards established in the Republic of Kazakhstan;

Kazakhstan continues to experience a high level of dependence on imports of vegetables, fruits and berries. Currently, due to the slight diversification of crops, a share of grain in the total gross output of crop production is 75%. Domestic demand in vegetables, fruits and berries are met through imports in large volumes from neighboring countries. So, in May 2012, 89% of consumed vegetables, except potatoes, were imported from abroad.

As mentioned, the Chinese authorities at the highest level support their own production by various methods, including active state financing, purchasing rice produced in China by clearly inflated prices, etc. Taking into consideration

that one of the key challenges to the effective functioning of the agricultural production in Kazakhstan is the lack of investment, it would be advisable to apply the Chinese experience.

Year: 2014
City: Almaty