Download as PDF, PPTX
Uploaded byCIMMYT
China’s Grain Policy and World
The document discusses China's grain policy, highlighting its agricultural growth driven by institutional changes, technology, and market reforms. Despite achieving self-sufficiency in rice and wheat, China is projected to rely more on imported crops like maize and soybeans due to rising demand and resource constraints. It concludes that China's food security strategy will involve significant investments in technology and infrastructure while contributing to global food security through careful trade partnerships.
More Related Content
Similar to China’s Grain Policy and World
China’s Grain Policy and World
- 1. China’s Grain Policyand World Jikun Huang Center for Chinese Agricultural Policy Chinese Academy of Sciences Presented at Borlaug Summit on Wheat for Food Security, March 25-28, 2014 in Ciudad Obregón, Sonora, México.
- 2. Questions and concernsin early 1990s • In the early 1990s - “Who will feed China?” - “Will China starve the world?” - “When?” … by 2010 or 2020 What have happened since 1990s
- 3. Average 4% ofannual growth rate of agricultural GDP in the past 2 decades: 5.4 times of population growth rate (0.74%) 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 1991-05 1996-00 2001-05 2006-10 Annual growth rate of agri. GDP in 1991-2010
- 4. 0 10 20 30 40 50 60 1992 1994 19961998 2000 2002 2004 2006 2008 2010 Export Import In the past two decades, on average China was a net food exporter China food trade: export and import (bil. US$) in 1992-2010
- 5. 0 10 20 30 40 50 60 2000 2002 20042006 2008 2010 Export Import With export>import recently, concerns on food security were raised again… China food trade: export and import (bil. US$) -20 -15 -10 -5 0 5 10 2000 2002 2004 2006 2008 2010 2012 Rice Wheat Maize Net import of rice, wheat and maize (million tons)
- 6. Questions: • How Chinahas been able to meet its growing demand for foods of >1.3 billion (20% of world population) with 8% of world cultivated land in the past? • If the dynamics of China’s economy will continue, what will be implications for grain and food security in China and world?
- 7. The rest ofpresentation Major drivers of agricultural growth Prospects of grain and food economy in the future Concluding remarks
- 8. Major drivers ofagricultural growth: 4 major policies -Institutional change -Technology -Market -Investment -…
- 9. Total Factor Productivityfor rice, wheat and maize in China, 1979-95 (note: similar trends for other products) 50 100 150 200 1979 1981 1983 1985 1987 1989 1991 1993 1995 Rice Wheat Maize Institutional change (decollectivization, allocated land equally to all households in each village) was a major source of growth in 1979-84 Huang and Rozelle, 1996; Jin et al., 2002
- 10. Total Factor Productivityfor rice, wheat and maize in China, 1979-95 50 100 150 200 1979 1981 1983 1985 1987 1989 1991 1993 1995 Rice Wheat Maize TFP growth at about 3% After middle 1980s, technology has been major factor affecting productivity growth
- 11. -3 0 1 2 3 4 5 Early Indica LateIndica Japonica Wheat Maize Soybean Cotton TFP -4 -2 0 2 4 6 8 Early Indica Late Indica Japonica Wheat Maize Soybean Cotton TE TC Source: Jin, Huang and Rozelle. 2009 Total Factor Productivity Rises Mostly Technical Change (rising of production frontier) … China is already operating efficiently (at frontier) Total Factor Productivity for major crops, 1995-2004
- 12. Major findings onBt cotton impacts in 1999-2001 (per hectare) • Reduce pesticide use: 34 kg 923 yuan • Increase yield: 9.6% 930 yuan • Increase seed cost: 570 yuan • Reduce labor input: 41days 574 yuan • Increase net income: 1857 yuan (US$ 225) Huang et al., 2002, Science; Huang et al., 2003, Agricultural Economics
- 13. GM Rice inFarmer Fields Huang et al., Science, 29 April 2005: 688-690 Pesticides(kg/ha):Btvsnon-Bt 2.0 21.2 0 5 10 15 20 25 Bt rice Non-Bt rice • Yield : + 6% • Labor : - 5.5% • Net income: 745 yuan /ha ( > US$ 100/ha)
- 14. Dr. Norman Borlaug’seffort to promote GM technology in China • At an age of 90, Dr. Norman Borlaug visited Beijing in July 2004. He submitted a letter to China’s leader to promote the commercialization of GM rice and enhance China and global food security through technology change.
- 15. Major drivers ofagricultural growth in the past -Institutional change -Technology -Market: infrastructure and reform -Investment -…
- 16. Integration in China’sMarkets (percent of market pairs that have integrated price series; Note: similar results for rice, wheat and other products) 1991-92 1997-00 2001-2003 Corn 46 93 100 Soybean 56 95 98 When using statistical tests (on more than 800 pairs of markets), almost all markets move together in an integrated way, up from only about ½ in the early 1990s (when markets were NOT integrated)
- 17. Nominal protection rates(%) in China, 1980-2005 -80 -60 -40 -20 0 20 40 60 80 1980-1993 1994-2001 2002-2005 Rice Wheat Soybean Milk Pork Vegetable … by the 2000s, the prices of most of China’s commodities were nearly equal to the prices of the same commodities on world markets …
- 18. Major drivers ofagricultural growth in the past -Institutional change -Technology -Market: infrastructure and reform • Facilitated agricultural structural change • Helped farmers: cheaper inputs’ prices and higher output prices -Investment -…
- 19. Investment into agriculturalsector Government budget support (billion yuan in 2008 prices) 0 100 200 300 400 500 600 700 800 900 1000 1990 1993 1996 1999 2002 2005 2008 2011
- 20. Agricultural subsidies (100million yuan) Total subsidy in 2012 was 164.3 billion yuan (26.1 billion US$), about 3.13% of agricultural GDP. Most are “income transfer” as they are decoupled from production. Source: Ministry of Finance 0 200 400 600 800 1000 1200 1400 1600 1800 2004 2005 2006 2007 2008 2009 2010 2011 2012 Aggregate inputs Machinery Seed Grain
- 21. The rest ofpresentation Major drivers of agricultural growth Prospects of grain and food economy in the future Concluding remarks
- 22. 0 100 200 300 400 500 600 700 800 900 1000 1980 1985 1990 1995 2000 2005 2010 Population in rural andurban 0 0.5 1 1.5 2 2.5 3 1970 1980 1990 2000 2010 2020 2030 million Although population will keep rising, its growth rate will fall significantly in the coming decades Rural Urban
- 23. 0 500 1000 1500 2000 2500 3000 3500 4000 4500 1955 1960 19651970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 GDP GDP/Capita Slow growth in 1950s-1970s Income/capita: 4% Rapid growth in 1980s-2000s Income/capita: ~10% Double in 2010-2020 Income/capita: ~7%
- 24. Income elasticities ofdemand for various foods in rural and urban in 2010, China Rice Wheat CoarseGrain EdibleOil Sugar Vegetable Fruit Pork Beef Sheep Poultry Egg Milk Fish -0.4 -0.2 0 0.2 0.4 0.6 0.8 1 1.2 Rice Wheat CoarseGrain EdibleOil Sugar Vegetable Fruit Pork Beef Sheep Poultry Egg Milk Fish Rural Urban
- 25. Prospects of foodsecurity and trade in the future • Major challenges and policy responses: – Demand • Income growth; Urbanization – Production: • Land: – Redline (120 million ha) – Quality • Water scarcity • Technology • …
- 26. Expansion of irrigatedland in China 0 10 20 30 40 50 60 70 1950 1960 1970 1980 1990 2000 2010 Million ha About 50% of cultivated land
- 27. Policy response: investin water • In the past: invested in water has been the largest component of public investment in agriculture • 2011: - Double investment in water conservancy: invest 4000 billion yuan (630 billion US$) in next 10 years;
- 28. National Policy: “PromotingAgriculture by Applying Scientific and Technological Advances” • Annual growth rate in agri. R&D (public): – 2000-2010: 16% in real term • China’s #1 policy document in 2012: - New political commitment to invest in R&D and reforming public R&D system • China’s #1 policy document in 2013: - Modernizing agriculture: increase productivity through investment and changing farming operation mode (e.g., increasing operation size…)
- 29. National Food SecurityGoals • China’s #1 policy document in 2014: - Rice and wheat: self-sufficiency in long run - Improve food quality and food safety - Reliable supply: domestic and international - Sustainable agricultural growth
- 30. Prospects of foodsecurity and trade in the future • Major challenges and policy responses: – Demand • Income growth; Urbanization – Production: • Land and water scarcity; Technology; … • Prospects of food supply, demand and trade
- 31. China’s net exportof cereals (million tons) under baseline in 2001-2025 -25 -20 -15 -10 -5 0 5 Rice W heat Maize 2001 2010 2025 Source: Huang et al. (2013)
- 32. Pork production, demandand net import in 2001-2025 (million tons) -10 0 10 20 30 40 50 60 70 2001 2010 2025 Production Total demand Net import Source: Huang et al. (2013)
- 33. Maize production, demandand net import in 2001-2025 (million tons) -50 0 50 100 150 200 250 300 2001 2010 2025 Production Total demand Net import Source: Huang et al. (2013)
- 34. Soybean production, foodconsumption, total demand and net import in 2001-2025 (million tons) 0 20 40 60 80 100 120 2001 2010 2025 Production Total demand Net import Source: Huang et al. (2013)
- 35. China’s net exportof agriculture and food (million tons) under baseline in 2010-2025 -90 -80 -70 -60 -50 -40 -30 -20 -10 0 10 Rice W heat Maize Soybean Sugar Cotton VegetableFruit Pork Poultry Beef Milk Fish 2010 2025 Source: Huang et al. (2013)
- 36. Scenario: Impacts ofbiotech maize Maize self-sufficiency (%) in 2009 and 2025 80 90 100 2009 2025 GMO maize Baseline Huang et al., 2011
- 37. Concluding Remarks China’s experienceshows that incentives to farmers (land & market), technology and investment are crucial to agricultural growth and ensuring food security However, given its resource constraints (e.g., land and water per capita) and rising demand, China is expected to increase its dependence on world agricultural market (maize, soybean, cotton, sugar, dairy, etc.)
- 38. Concluding Remarks While theself-sufficiency of wheat and rice will be achieved, it is expected that imports of maize, soybean, oil, sugar and dairies will rise in the future. Given the challenges, China will continue to heavily invest in technology and rural infrastructure to ensure its household and national food security.
- 39. Concluding Remarks The globalimplications: • China’s ability to achieve rice and wheat self- sufficiency will contribute to global food security. • China’s growing demand for other foods will be good for exporters, but will not have much of a negative impact on other food importers - Soybean and maize imports: well within the capacity of China’s existing trade partners in North and South America, and Eastern Europe. • China is likely to actively participate in global food governance and invest in agri. technology in developing countries (e.g., Africa)
- 40.