CHINESE AGRICULTURE
Sustainability China has recognized the challenges and is taking
various
steps such as increasing investment and subsidies as well as using new technologies and equipment to increase self-sufficiency. According to research from
Kam Wing Chan, a University of Washington professor, from 1979- 2009 China’s urban population increased by approximately 440 million people to 622 million. Continued migration will lead to increased agriculture industry consolidation, which will be a major driver for increasing efficiencies. However, this is a long term trend. Consolidation has occurred in some parts of the country, particularly in the north, but fragmentation is still the norm in the east and south. A major prerequisite for consolidation is to improve the social welfare of citizens who move from rural to urban areas. However, many migrants retain their farming rights in their rural hometowns as a hedge against potential job losses in the cities, which in turn reduces the potential for industry consolidation.
Furthermore, given the size of the average smallholder farm
(around 1.2 acres), to achieve any sort of scale requires a time- consuming, arduous process in order to transfer the farming rights of many smaller farmers to one larger producer. For this reason, Zhao predicts “fundamental changes over one to two decades. We could see more changes during that period, but not over the next 3-5 years.” With scale, farms can increase the use of machinery and other
technologies. Zhao said, there could be demand for “new seed stocks, pesticides, and herbicides. And any fertilizer can be used in machines and reduce the labour input, which will be welcomed by the market.” Following the use of GMO crops in the US, Zhao said he expects
them “to be promoted and widely used in China. Although there are some suspicions of genetically modified crops, it is still a trend. Not to increase output, but to keep annual output stable and not affected by bad weather. If output in China dropped 10%, that would be a disaster for global markets.” The government has also been improving data collection and increasing information flow, which are essential for better food production and distribution, as well as development. Kullavanijaya said, “China’s leaders have had the foresight to develop an infrastructure network in China. The ability to have information and use it is very good on the technology side... they are open minded and creative about the use of technology such as new biotech strains of grain that are drought resistance and pest resistance and higher yielding.” Kullavanijaya also talked about the importance of having a big
China has more than 4,300 wholesale agricultural product markets ...
According urban migrant
to Zhao, an average can
save 10-20k
renminbi per year. A farmer is fortunate to net a few thousand. And the farmer must accept the potential risk of seeing his labour return nothing if severe weather or volatile grain prices negatively impact revenue. Zhao said, “if the economic
situation becomes difficult, they [migrant workers] could move back to become farmers again, so this is a major issue. Buying and selling land is a key issue. That would be a difficult barrier for consolidation. Such reform policies depend on whether social welfare can be improved... If it can’t be solved, efficiency can’t be increased sufficiently, and China can’t
be competitive countries.” 60 March 2014 with other
picture view of the issue in order to benefit citizens. He stressed the need to “think about all inputs that make a community thrive. The design has to have all the elements to support a community or urban areas and has to fully consider infrastructure, water sources, engineering, food sources, and transport. Smart and sustainable – as defined as long term economics – that’s the end result. The end end game is quality of life.”
And the Chinese government, which has historically taken the
long view on many public policy issues but can also implement policies quickly, is allocating capital to infrastructure and logistics projects to increase efficiency. According to the OECD-FAO study, China has more than 4,300 wholesale agricultural product markets and has a brokerage market numbering more than 6 million people. Significant investment in water infrastructure is another critical government initiative.
Global Opportunities Another way China is addressing its commodity shortage is
through overseas investments. China is acquiring direct farmland and engaging in other partnerships with foreign governments and private entities to reduce the strain on domestic resources. In 2011, Chongqing Grain Group, a large state-owned grain
company, built a soybean processing plant in Brazil. At that time, The China Daily quoted company president Hu Junlie as saying, “most Chinese companies import soybeans through the four largest international grain dealers – ADM, Cargill, Bunge and Louis Dreyfus. However, if importers can purchase from the producers, 18-24% of the profit could be saved.”
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