Food Security in China: Production vs. Trade & Environment

1. Food Security in China: Production vs. Trade & Environment LEAD-China Cohort-10 March 15, 2004 http://www.grchina.com/qiang/uk/

2. Outline • What is Food Security • Food Security in China • Case Study

3. What is Food Security? • Access by all people at all times to enough food for an active, healthy life (World Bank) • All people at all times have both physical and economic access to the basic food they need (FAO Committee on World Food Security) • Food security exists when all people, at all time, have physical and economic access to sufficient, safe and nutritious food for a healthy and active life (World Food Summit)

4. What is Food Security? Stability Availability Access

5. Food Security in China General Facts (1) • Nearly 70% of the population live in the rural areas • Arable land gradually decreases due to urbanization, desertification and land retirement

6. Food Security in China General Facts (2) • Traditional perception of “no agriculture no stability, no industry no wealth” • Regarding food security as a central concern and setting the rate of grain self-sufficiency at 95%

7. Food Security in China Grain Production （1949-2002）

8. Food Security in China • Key Factors of Production Increase—— • Institutional: household responsibility system, State procurement price lift, Grain circulation system reform • Technological: high-yield varieties, irrigation improvement, flood control • Fiscal: inputs, land reclamation, infrastructure

9. Food Security in China China’s commitments to WTO (1) • TRQ for major cereals and some other important commodities • A “tariff-only” import regime for other agricultural products with significant reduction of tariffs

10. Food Security in China China’s commitments to WTO (2) • Immediate stop of using export subsidies • Capping the domestic support within agreed de minimis level

11. Food Security in China China’s commitments to WTO (3) • Compliance to the terms of SPS/TBT agreements • Gradual opening agriculture-related services to foreign firms

12. Food Security in China Grain Import (1978-2002) Note: Left scale for commercial grain and total output of grain crops; right scale for grain imported.

13. Food Security in China Impact of Grain Import on Domestic Production • Comparative disadvantages in grain prices • Falling grain price as a result of trade liberalization • Shrinking farmer’s enthusiasm on grain production

14. Food Security in China Long-term prospects • Growth of agricultural import is likely to surpass that of export • However, China’s demand for importing is unlikely to grow very large • Stagnated demand for food products • Limited affordability to high-value imports by a majority of the Chinese consumers • Improved competitiveness of domestic products • High costs for penetrating inland markets

15. Food Security in China Environment against Grain Production • Water shortages and contamination • Arable land quantity and quality dwindling • Natural disaster • Quality of agricultural products declining

16. Food Security in China Is Food Secured in China?

17. Food Security in China Is Food Secured in China? (1) • Annual grain production was usually between 450 to 510 million tons, per capita grain possession was around 400 kg • Grain production increases mainly due to the rise of per unit yield, not the extension of sown areas

18. Food Security in China Is Food Secured in China? (2) • Grain ration consumption decreases due to urbanization and income augment, from 1990 reduced by 2% annually • Feed grain consumption increases 1.2 times from 1990 to 2000 • In the coming 30 years, China will be able to achieve food security within the current resource allocation

19. Conclusion • Food security is the central concern in China • Trade liberalization will influence domestic grain production and farmer’s income • Water resource is the key factor of grain production • China can feed its population in the future 30 years

20. Case Study • “Grain for Green” Policy • Introduction • China has continuously increased the arable land for feeding the huge population for the past five decades • Through reclamation of wasteland, wetland and forestland

21. Case Study “Grain for Green” Policy Consequence: Degradation of eco-system ——Deforestation ——Desertification ——Narrowed bio-diversity

22. Case Study • “Grain for Green” Policy • Aim • ——turning the fragile crop/grazing lands into pasture or forests • Reason • ——awakened public awareness of quality of life • ——oversupply of grain in the domestic market • Measure • ——providing participating farmers with grains and money as compensation for income forgone

23. Case Study • “Grain for Green” Policy • Started in 1999 in Sichuan, Shaanxi and Gansu • 25 provinces, autonomous regions and municipalities involved in 2003 • About 7 m ha of low-yield land returned to forest and pasture from 1999 to 2003

24. Case Study Overproduction and Environmental Degradation Land Reclamation Grain for Green

25. Discussion Under the current resources constraints, in a bid to achieve food security by bridging the grain gap, a nation should rely on—— domestic production or international trade? http://www.grchina.com/qiang/uk/