December 10, 2010

China may not sustain grain self-sufficiency

China may not be able to sustain its growth trend in grain production, threatening its vaunted policy of self-sufficiency in grains, a senior cabinet official said Thursday (Nov 9).

The remarks are a departure from government rhetoric, and an unusual warning just a week after officials celebrated a seventh-consecutive record grain harvest.

"There's a greater concentration of (grain) output in producing areas, and with water scarce in northern areas, the sustainability (of output) is worrying," said Chen Xiwen, head of the State Council's office on rural policy.

"It's inevitable that the rate of self-sufficiency will decline," he added.

By a conservative estimate, to increase domestic output enough to meet demand currently covered by imports would require more than 600 million mu, or 40 million hectares, of arable land that China doesn't have, Chen said, adding that this increases the government's difficulties in controlling prices.

"The longer the period of grain output growth, the closer we get to the point of reversal," he warned.

Chen acknowledged that there isn't currently a serious problem, with output around 540 million tonnes a year and demand around 525 million tonnes.

"In a normal year, there's still surplus even after satisfying demand," he said. "But in terms of systemic demand and supply for grains, the outlook isn't that optimistic."

China said it harvested 546.4 million tonnes of grains this year, a 2.9% increase from last year.