Who Will Feed China? Wake-up Call for a Small Planet

1. Who Will Feed China? Wake-up Call for a Small Planet Lester Brown’s Look at the Future of China and the World

2. Palmer Drought Severity Index

3. Background • The current leadership has said “never again” During the Great Leap Forward 30 million people starved to death in China due to a human caused famine

4. Historical Record • Densely populated Asian nations that developed rapidly quickly became major food importers • Examples: Japan, S. Korea, Taiwan

6. Brown in a nutshell China as it develops might no longer produce enough food for its own consumption and as a result will place unprecedented strains on world markets, food supply, and even water supplies. Reasons include loss of farmland to industrialization, urban areas, roads… and richer people wanting more meat as well as more people overall.

7. Organizing Principles • Supply • Demand • Historical Record

8. View of Chinese Agriculture http://www.youtube.com/watch?v=4sQsklfrNmc&feature=related Publicity film about agriculture in China

9. Supply • Economic Development = increased supply of consumables • Sustained (not sustainable) Development = ever increasing supply • Simply More Stuff Available • Technology and Investment has assisted • Development = Changing Supply Needs

10. 1979 “capitalism” increases supply – An Hui http://www.youtube.com/watch?v=EYJV8CffwuM&feature=related

11. Supply Increases After 1979 in post-Maoist China supply rapidly increased Economic development ensued

12. Demand • Economic Development = increased demand • Sustained (not sustainable) Development = insatiable appetites • More Stuff Wanted • Development = Changing Demand or Preferences

13. Classical Equilibrium • Price Allocates Scarce Resources • But what if Resources Can’t Meet Needs? • What if the supply is so small relative to demand and the price so high that people starve? • ultimate Capitalist Solution according to a Marxian • Brown suggests that this could happen • Globally, not necessarily in China

14. Historical Record • Development Results: • Population Spurts • Demand climbs • Search for Cheaper more Efficient Supplies • In East Asia this has caused massive imports of food in Japan, S. Korea, & Taiwan

15. China’s Changing Demand Calculations • Population continues to grow • Maybe only 100 Million or so more • Consumers moving up the Food Chain • Competition has become Global • think of the current Petroleum Markets, Markets, Markets

16. China’s Changing Supply Calculations: Inputs • Cropland could shrink • Urbanization • Industrialization • Transportation • Environmental Damage • Water in limited Supply • Industrial Demand Increasing • Past Pollution Problems • Global Warming???

17. Last updated at: (Beijing Time) Friday, April 23, 2004 Farmers reclaim 'wasteland' as grain price soars Lured by a grain price hike, Chinese farmers like Li Xihua are returning to farmlands from their work in cities.

18. Increase, Decrease and Stock of Cultivated Land in China, 1988 - 1995 Basically China will be losing Agricultural Land over the long run Food Resources

19. Urban Conversion http://www.agweb.com/blog/Farmland_Forecast_148/?Year=2010&Month=10 One estimate of current arable land in China and minimum required for self-sufficient grain production http://www.jstor.org/stable/pdfplus/3181377.pdf?acceptTC=true

21. History of other Asian Nations • Japan & Korea – Past Decades • Growing grain deficits • Shrinking cultivated land • Increasing imports of Food

22. Current Situation In China 2013/14

27. Movement from Family Farm to Agri- Business

28. Foreign Expansion

29. Higher Ham Prices in USA??? The makers of Smithfield Ham, an icon on America's culinary scene for decades, are selling the publicly traded company to China's Shuanghui International Holdings Limited for about $4.72 billion in cash. The deal also includes an exchange of debt. The purchase values Smithfield Foods at $7.1 billion — a figure that would make the purchase "the largest Chinese takeover of a U.S. company," according to Bloomberg News.

30. But China still lags the US in Food imports.

31. But China is catching-up. Is this good or bad? Is Lester Brown right or wrong??? The jury still seems to be out.

33. Brown’s Recent Comments • State of the World 2006: China, India, the U.S., Europe, and Japan by the numbers • The United States still consumesthree times as much grain per person as China and five times as much as India, • If Chinese per-capita grain consumption were to double to roughly European levels, China alone would require the equivalent of nearly 40 percent of today's global grain harvest. • Already, China's growing imports of grain, soybeans, and wood products are placing great pressure on the biodiversity of South America and Southeast Asia. • http://www.worldwatch.org/node/3893

35. So is Brown Correct? • Global shortages will occur and prices soar. Or is the Chinese leadership correct? • High levels of production of Grains can be maintained in China. • The world has nothing to fear

36. OLDER MATERIALS

37. So What is Happening? • Chinese View • American View

38. No strain for China's Grain( 2003-11-21 21:38) (Xinhua)China is capable of maintaining the balance between grain supply and demand in the coming years and the country's grain security is under no imminent threat despite four consecutive years of grain production decrease. The view was raised by Han Jun, director of the Rural Economy Research Department under the State Council Development Research Center on Thursday. Are Things Fine??? Or Is China Whistling in the Wind?

39. News May 25th 2011 http://english.people.com.cn/90001/90778/90860/7391066.html

40. China still faces challenges in grain production, although it is likely to see a rise in summer grain output this year, a senior official said Wednesday.Prices of producer goods have continued rising, which has squeezed farmers' profit margins and dampened their enthusiasm for production, said Ma Xiaohe, deputy head of the Academy of Macroeconomic Research of the National Development and Reform Commission, China's top economic planning body, at a forum.Labor costs have also increased recently, indicating the possibility that farmers may abandon grain production to look for other jobs to earn more money, he said.The loss of arable land due to urbanization and the country's antiquated agricultural infrastructure also threaten grain security.Ma said the government should increase financial support for agricultural production and take more measures, such as developing a commodity futures market, to ensure grain security.

41. Summer 2010 http://english.people.com.cn/90001/90778/90862/7109710.html

42. What about May 2008? http://english.people.com.cn/90001/90778/6408055.html

43. http://www.bloomberg.com/news/2011-02-04/china-may-have-to-boost-wheat-imports-on-drought-commodore-says.htmlhttp://www.bloomberg.com/news/2011-02-04/china-may-have-to-boost-wheat-imports-on-drought-commodore-says.html

44. The Wall Street Journal Asia Business JANUARY 21, 2011, 4:05 A.M. ET Chinese Agriculture Imports See Sharp Rise BEIJING -- China's grain imports made the largest gains by far among China's commodity purchases last year, signaling higher demand and flush liquidity that analysts say is likely to pave the way for more imports this year. • Corn up 18-fold -- do to diet change and more hog raising – up to 2 mil. tons • Productivity growth slowing – more imports in future • Wheat imports up 37% to 1.2 mil tons • Soy beans 55 mil tons • Rice still small (only 350,000 tons) but growing

45. Global Climate Change Climate change 'takes toll' on grain harvest By Jin Zhu (China Daily) Updated: 2010-11-05 07:40 • Climate change will trigger a drop in China's grain harvest over the next few decades and threaten food security • Tang Huajun, deputy dean of the Chinese Academy of Agricultural Sciences (CAAS), said a 5 to 10 percent crop loss is foreseeable by 2030 if climate change continues. "The impact of climate change, coupled with arable land loss and water shortages, will cause a bigger grain production fluctuation and pose a threat to reaching output targets," Tang told China Daily.

46. http://www.bbc.co.uk/news/world-asia-pacific-12609202

47. More and more the issue of keeping up supply is being raised.

48. Imports help feed hunger for grain By Jin Zhu Updated: 2011-03-25 08:29 • Total 2010 imports 60 mil tons • No shortage expected 200 mil tons of reserves in storage • Over past 10 years 95% of demand produced locally • China will remain largely self-sufficient – Ag Minister Han Changfu • Total world trade in Rice only about 15% of China’s output • Grain production has been growing over last 7 years up by 3% in 2010 • Current production 540 mil tons goal for 2020 550 mil tons

49. US View • Let’s Make a Deal??? http://maps.grida.no/go/graphic/evolution_of_the_world_grain_production_comparision_with_china_and_united_states

50. The Chinese government’s latest efforts to boost grain production are different from the mid-1990s, when the state had more control over production and trade. In contrast, the recent official measures are modest, reflecting a changed political climate, limitations of political infrastructure, and natural resource constraints. It is therefore unlikely that the new measures will reverse the trend of consumption outpacing production. As long as China’s total grain supplies appear to be tight, the United States will benefit in both wheat exports to China and corn exports to Asian markets.