March 25, 2011

 

 

China may not be able to meet sharply rising food demand from its domestic resources, a senior Chinese cabinet official said Thursday (Mar 24).

 

A day after China's government declared its goal of an eighth consecutive record grain harvest this year, Chen Xiwen, director of the State Council's executive office on rural policy, questioned the policy wisdom of setting increasingly higher grain output targets as China struggles to wring more yield out of scarce arable resources.

 

"Chasing ever-higher output levels may mean over-fertilisation and unsafe agriculture," Chen said. "Of course, we have to raise output in this area but our techniques and resources can't keep up. We have to change our development methods."

 

As changing diets and rising wealth raise food demand in China, "Our ability to meet consumption levels is clearly insufficient," he added.

 

Chen said genetically modified foods, increased fertilisation and organic farming are partial solutions, but pose inherent problems such as pollution and potentially unsafe or overly expensive food.

 

China's grain imports have risen in recent years across major categories, soaring in some cases last year to their highest levels in more than a decade.

 

Corn is the most prominent example of the shift. China broke its 15-year status as a net exporter last May to turn net importer, eventually shipping in a volume for the full year, mostly from the US, that was 18 times higher than in 2009. Wheat and rice imports also grew.

 

China categorises corn, wheat and rice as key grains and protects them with tariff-rate quotas and formidable stockpiles, which Chen said currently total 200 million tonnes - about two-fifths of annual consumption and among the largest such reserves in the world - including both private and public stocks.

 

To illustrate the inexorability of global trade, Chen pointed to soy, imports of which overtook domestic output around 2004 to meet sharply rising Chinese demand.

 

"China used to be the world's largest soy producer, now it's the world's largest soy importer," Chen said. China last year posted a record 54.8 million tons of soy imports.

 

Still, more openness in the Chinese agriculture sector is not at odds with overall development.

 

He said that the perception of rising foreign control in some parts of the domestic agriculture sector was incorrect.

 

"The government is committed to welcoming foreign competition in the downstream agricultural processing sector...and it is not true that foreign companies control agriculture prices in China," he said.

 

Foreign agriculture companies have "contributed innovation, and developing China's agriculture sector doesn't mean having to squeeze out foreign competitors, he added.

 

Chen questioned whether the notion of self-sufficiency needed to be revisited in the light of current agricultural economics.

 

However, he has not abandoned Beijing's adherence to the principle. "It's still an important concept," he said. "It's dangerous for a country with a population as large as China not to defend self-sufficiency in grains."