October 16 is World Food Day. Having enough food, however, remains a problem that all countries face. China, with its 1.3 billion people, accounts for more than a fifth of the world’s population. Since the 1980s, the country has gradually ended the problem of feeding all its citizens.

However, with the development of the economy in recent years, farmland is being used for other purposes, which has driven up grain imports. This has led to questions about China’s food security, along with many other questions, such as whether China can now grow enough grain to feed itself, and whether its increased imports will affect the international grain prices and further impact on world food security.

The fate of farmers has also aroused much attention. In an urbanizing world, governments around the world are dealing with how to protect the interests of those who grow the food that ends up on consumers’ tables.

The Ministry of Commerce announced in a report on its website posted September 21 that China’s grain supply is rising, easing the tight supply-demand situation. According to the report, the area in which grain is cultivated has increased to exceed an expected 100 million hectares, which would be an increase of 1 percent year on year.

The export quota for maize has been decreased. In the first half of this year, only 1.63 million tons of maize was exported, down 75.6 percent year on year. Meanwhile, national wheat imports reached 2.73 million tons, a rise of 85.7 percent compared to a year ago, and contractual wheat imports expanded to 7 million tons as of the end of June.

The most populous country in the world is home to only 7 percent of the world’s farmland. There is only 0.1 hectare of farmland for every mouth in China, less than half—40 percent—of the world average. Worse yet, natural disasters are not infrequent in a country that spans the bulk of the eastern Asian mainland. It is also one of the world’s most arid places, with per-capita water resources being a quarter of the world norm here.

National grain output has declined five years in a row, making the largely agrarian nation a net importer of caryopsis goods. This was particularly evident in the fourth season last year, when the prices of agricultural products rose domestically, which triggered global concern. Food security in China not only influences its domestic economic development and social stability, but also impacts on the world economy.

Some overseas analysts suggest an increase in net grain import is a question of whether China will be forced to depend on the outside grain market. There are Thai rice farmers who have claimed their crop has been contracted to be sold to Chinese buyers even before harvest. Viet Nam attributes the price of its rice, which has risen 20 percent recently, to Chinese grain smuggling. Some go as far as to predict that China is the key variable that pushes up or drags down international grain prices. The following examines how true that claim is.

Conclusions of Security

The relation between grain production, consumer demand and state grain reserves is the equation to measure a country’s food security.

The area where grain is grown in China has fallen from 113 million hectares in 1998 to less than 100 million hectares. Concurrently, aggregate grain output slipped from 510 million tons in 1998 to 430 million tons in 2003. The volume of per-capita grain possession likewise decreased from 414 kg to 331 kg, during the same period. This does not necessarily mean China cannot feed its 1.3 billion people, though.

The Commission for the Integrated Survey of Natural Resources of the Chinese Academy of Sciences launched a systematic study on China’s population and farmland, stating that the nation’s maximum grain output could be 830 million tons. Calculating on the basis of an annual per-capita grain consumption of 500 kg, the commission asserts the existing farmland has the capacity to support up to 1.66 billion people.

Mei Fangquan of the Agricultural Documentation and Information Center of the Chinese Academy of Agricultural Sciences estimates that China’s total grain demand in 2030 would reach approximately 702 million tons, while total grain output then would be 690 million tons. Such a shortage is not large and would be mainly due to grain used as fodder, Mei concluded.

Ren Jizhou, an academician with the Chinese Academy of Engineering, agrees that a future grain shortage would be from animal feed demands, not from humans eating too much.

According to Ren, grain demand has evolved. Statistics show that the rural population consumes an average of 233 kg of grain a year, three times their urban counterparts, who ate 160 kg in 1978, but only 78 kg in 2002. In the past 20 years, grain consumption has not risen. In fact, it has dropped, while animal products such as meat, eggs and milk have more or less displaced it. What foods Chinese, especially well-off city-dwellers, eat is undergoing a historical change, and would continue to do so.

In 1984, the total grain production reached 400 million tons, 394 kg per capita, meeting basic demands for both humans and animals. Of the 400 million tons of grain produced that year, humans ate 280 million tons, while 120 million tons of it went to livestock. After 20 years, grain demand has increased about 100 million tons to reach 506 million tons, 300 tons for dinner bowls and 200 million tons for barnyard troughs.

Ren thinks that China can achieve its goal of supporting 1.6 billion people in 2020. Due to urbanization, the rural population is falling rather quickly, with migration to cities projected to continue to climb in the next 15 years. The decline of grain consumption as a result of this urbanization may very well accommodate the demands of any rise in overall population. On the other hand, with more and more urbanites able to afford Big Macs and Kung Pao chicken, demand for fodder, which would increase to 400 million tons by 2020, is increasing faster than human grain consumption.

Grain reserve is another important variable. According to international practice, at least three months worth of grain should be kept in storage, just in case. The Food and Agriculture Organization provides a figure for security reserve, which assumes that grain storage accounts for 17-18 percent of a country’s consumption, including 5-6 percent of backup reserve. It is appropriate for China to have a grain reserve of 125 million tons based on its national conditions. At the end of last year, official grain reserves stood at 180 million tons and farmers’ grain reserves nationwide were 389 million tons, for a total of 569 million tons. Assuming that the annual grain consumption stands at 490 million tons, grain reserves, as of last year, exceeded the annual consumption. This should stay this way for at least several years.

However, Li Guoxiang from the Rural Development Institute of the Chinese Academy of Social Sciences noted that despite safe grain supply in the near future, challenges to China balancing supply with demand are not over. If China’s grain reserve drops to or below the world average, the domestic grain market could hurt the rest of the national economy.

Impact on the World Grain Market?

In recent years, grain imports have risen gradually. Total import volume of last year reached 22.2 million tons. That figure in the first seven months of this year was 15.8 million tons, almost 2 million tons more than that of the same period last year. According to customs statistics, China imported $14.35 billion worth of farm products in the first half of this year, up 62.5 percent year on year, while exports were valued at $10.62 billion, up 11 percent. This has made China a net importer of agricultural products, digging a trade deficit of $3.73 billion in such trade through mid-year.

Lester Brown, President of the U.S.-based World Watch Institute, predicts China’s annual gross grain import demand between 1990 and 2030 would reach 479-641 million tons, while annual grain output would fall to 272 million tons. This would mean a grain shortage of 207-369 million tons, which is around two times current worldwide grain export. Brown later reduced his grain shortage predictions from 369 million tons to 215 million tons. Brown’s analysis was based on the thinking that a large grain shortage in China might unleash fierce competition, making world grain prices skyrocket.

Chinese scholars are more optimistic about the future of their country’s grain situation, arguing that China will inevitably import more grain, but the result will not be so serious to it or the world.

Kang Xiaoguang of the Research Center for Eco-environmental Sciences of the Chinese Academy of Sciences predicted the gap between Chinese grain production and demand would rise sharply before 2020, but will plummet thereafter. Kang asserted that gaps between unprocessed grain production and demand in 2010, 2020 and 2030 would be 83 million tons, 183 million tons and 91 million tons, respectively, and that the fraction imported would be 15.67 percent, 16.13 percent and 4.78 percent, respectively.

Chen Xikang of the Chinese Academy of Sciences estimates the gap in China’s grain production and demand in 2020 and 2030 to be 35 million tons and 50 million tons, with imports making up only 5 percent and 8 percent of the consumption.

Huang Jikun of the Chinese Academy of Agricultural Sciences conducted an analogue calculation on the basis of nationwide income, population, investment in agriculture, urbanization, marketization and changes in prices and policies. He predicted the country’s annual net grain imports would be 40 million tons from 2000 to 2010, rising to 47 million tons from 2010 to 2020 and then dropping to 38 million tons from 2020 to 2030. The proportion of imports needed in 2010, 2020 and 2030 would be 8.4 percent, 7.2 percent and 5.5 percent, respectively.

Mei Fangquan, who predicted the marginal grain shortage within 25 years because of animal feed, estimates grain import volume could be kept between 20 and 30 million tons, with the dependency rate on imports falling to below 5 percent.

Among the flurry of calculations, the World Bank says China’s net grain import will grow to 32 million tons by 2020.

International grain supply still has much room to evolve. By the mid-1980s, grain importation worldwide virtually froze and farmlands in major grain exporters shrunk. Compared with its peak in the early 1980s, the crop yielding area of big grain growing countries fell by 34.5 million hectares, which could yield 115 million tons of grain. That is to say, even if there were no improvement in agricultural technology, 115 million tons of grain could be produced simply by recovering deserted farmland. Such potential could be tapped into if demand dictated it. For example, when world grain prices rose between 1996 and 1997, the world responded by increasing production by 7.5 percent.

Though figures differ greatly, there is a general trend: Grain import will not exceed 50 million tons before 2030 and the country will only import under 10 percent of the grain it consumes. Furthermore, the world grain market will not be adversely affected.

(Beijing Review October 16, 2004)