Who Will Feed the Growing Populations of Asia?

1. Who Will Feed the Growing Populations of Asia? Analysis of the world grain market’s ability to meet growth in Asian demand through 2030 ECON 0428: Population Growth and Global Future Vincent Blais Maurits Pot

2. Major Issues • Chinese Urbanization • China’s Disappearing Farmland • Transformation to Livestock Farming • Chinese Water Scarcity • Capacity of Grain-Exporting Regions to meet Asian demand

3. Chinese Urbanization • By 2030, Chinese urban residents will account for 55-65% of the total population • Up from about 36% of the population in 2000 • Following a rise in incomes, demand for pork will rise • Direct food consumption of grains will remain steady • Challenge will be how to produce or import enough grain to feed livestock

4. China’s Disappearing Farmland • Forecast loss of 5-7% of total farmland through 2030 • Due to • Expansion of construction land, urbanization, • Environmental degradation • Losses predicted to be offset by gains in agricultural productivity • Due to • Continued funding of agricultural research and development by the Chinese government, • Shift to larger-scale agricultural operations

5. Transformation to Livestock Farming • Increased meat demand will necessitate introduction of specialized large-scale farming • Environmental concerns arise as the manure nutrient per hectare of cultivated land ratio increases

6. Water Issues • Irrigation remains key to agriculture • Lack of irrigation inland coupled with rising urban water consumption will likely force China to use water more efficiently • Livestock farming should be moved out of urban areas to prevent water contamination

7. Capacity of Grain-Exporting Regions • Traditional exporters of grain foods: North America, Western Europe, Australia, Argentina, Thailand • Exporters experiencing: slow growth in domestic demand • Export growth is the major driver of grain food production growth in these regions • Importers of grain foods are generally developing countries • Potential for significant consumption growth due to population growth • Aggregate Asian import demand: 400-500 metric tons by 2030 • Will require 1.1-1.4% production growth in exporting regions to meet domestic and global demand • Growth seen as attainable with continued research and development

8. Brown Thesis • Overly pessimistic outlook • Assumes growth of crops yield will end • Overlooks trade, comparative advantage benefits • Ignores role of technology in improving crop yields • Believes Chinese policy will steer away from innovation • Interprets importing of grain as an economic weakness • Dismisses supply side response to increased grain prices • Fails to consider high long-term price elasticity of wheat in exporting countries

9. Conclusion • Brown thesis takes too pessimistic view • Major Chinese Challenges: • Chinese urbanization • Decline in arable land • Rising environmental degradation • Trade relations with Grain-exporters