China’s farmers have been buying land abroad, from Africa to South America, and they should be buying more, according to the prominent Chinese economist David Daokui Li, to forestall a potentially catastrophic grain shortage that faces the country.
Li suggests that it would only take one bad crop to throw the world into food shortage. “We can imagine that with the frequency and severity of natural disasters in China as well as in other parts of the world, the overall global grain output will be decreased, which will pose a potentially grave threat to grain security, leading to worldwide food shortages and resulting in global inflation in food prices,” he says.
Li comments came in an interview published by Insead, the French management school that has a partnership with Tsinghua University, where Li is Director of the Center for China in the World Economy. He is also a member of the Monetary Policy Committee of the People’s Bank of China.
Buying more farm land overseas, Li says, “will not only work towards China’s self-interest, but will also contribute to helping to solve the wider global grain supply problem.”
China’s leadership has been repeatedly expressing its concern about the future of the country’s grain supplies. Regardless of record harvests being reported year after year for seven years despite a string of natural disasters, there is no hiding the challenges facing China’s growers of wheat, rice and corn. A richer and growing population, urbanization and natural and man-made water shortages have left supply struggling to keep up with rising demand.
The vulnerability of the country’s harvest, particularly the wheat harvest, increasingly concentrated on the drought-prone North China Plain, is only too clear to see. China is reaching the the edge of its capacity to keep its grain harvests increasing. Agri-technology is still boosting fruit and vegetable yields, but grain may have reached its limits after decades of seed and fertilizer improvement. In addition, grain farming remains inefficiently small scale and labour intensive, as is suggested by the photo above of a farmer from Ganyu County in Jiangsu. Acreage and younger farmers alike are also being lost to towns, exacerbating the longer-running effects of erosion, desertification and other environmental damage.
Stocks and imports have covered the gap with growing demand, forestalling, so far, the sort of shortages that Li fears. China imports more than 4 million tonnes of corn (mainly for animal feed) and more than 1 million tonnes of both wheat and barley a year. But being subject to world commodity markets pushes up prices, and no country likes to feel it can’t be self-sufficient in food, especially when it has an increasing number of mouths to feed.
The UN’s Food and Agriculture Organization estimates China to have 137 million hectares of arable land. China itself reckons 120 million hectares to be the minimum needed to maintain food security. All agree that the hectarage is moving in the direction of the smaller number, with the shrinkage of the area under grain shrinking causing most concern. Better water management, a national priority under the current five year plan, can reclaim some land for farming, but beyond that, as Li suggests, there is only one place to get any more.