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Mei Mei Chu
BEIJING (Reuters) – China, the world's largest importer of agricultural products, has set a goal of drastically reducing its reliance on overseas supplies over the next decade as part of a push for food security, but experts say achieving that will be extremely difficult.
With limited land and water, China will need to significantly increase agricultural productivity and expand cultivation area through technologies such as genetically modified crops to meet the Chinese government's 10-year forecast.
According to a document released in late April, the government envisions raising the self-sufficiency rate of staple grains and pulses from 84% in 2021 to 2023 to 92% by 2033, which would make it an “agricultural superpower''. China is progressing towards President Xi Jinping's goal of becoming Mid-century.
China's import cuts would be a blow to producers from the United States to Brazil to Indonesia who have expanded capacity to meet the demand of China's 1.4 billion people, the world's largest market for soybeans, meat and grains.
The Ministry of Agriculture, Forestry and Fisheries predicts that corn imports will fall 75% to 6.8 million tons and wheat imports will fall 60% to 4.85 million tons over the 10 years leading up to 2033.
For soybeans, the largest item in last year's total agricultural imports worth $234 billion, Beijing expects imports to fall 21 percent over the decade to 78.7 million tonnes.
These targets buck the trend over the past decade, when grain and oilseed imports surged by 87%.
“It's questionable to predict a sudden reversal in which China's imports will be lower in 10 years than they are now,” said Darin Friedrichs, co-founder of Shanghai-based Sithonia Consulting.
Five analysts and industry executives say China will struggle to meet its targets, mainly due to land and water shortages.
In contrast to Beijing's forecasts, the US Department of Agriculture (USDA) predicts that China's corn imports in 2033/34 will be about the same as current levels, while wheat imports will fall by 20%. The biggest discrepancy, USDA predicts, is a 39% increase in soybean imports.
The USDA also expects demand growth for animal feed, a major user of soybeans and corn, to outpace expansion in domestic corn production, spurring imports of sorghum and barley.
international security
Food security has long been a priority for China, which has a painful history of hunger and must feed almost 20% of the world's population with less than 9% of its arable land and 6% of its water resources.
Faced with supply chain disruptions due to the coronavirus pandemic and the Russia-Ukraine conflict, the urgency to reduce dependence on imports has increased.
Adding to the challenges are a trade war with the United States, China's second-largest agricultural supplier after Brazil, and climate shocks such as heavy rains that damaged China's wheat harvest last year.
On June 1, China will implement a food security law that calls for absolute self-sufficiency in staple grains and requires local governments to incorporate food security into economic and development plans.
This will build on other efforts to boost food production, such as enhanced grain insurance coverage announced this week to protect farmers' incomes.
Last month, the Chinese government launched an initiative to increase grain production by at least 50 million tonnes by 2030, focusing on improving farmland and investing in seed technology to boost crop yields and quality.
Soil challenges
China increased production of corn, soybeans, potatoes and oilseeds last year as it expanded cultivation on previously uncultivated land and encouraged farmers to switch from cash crops to staple crops.
But that's not the case even as the world's No. 2 corn producer harvested a record 288.84 million tonnes last year and imports surged to a near-record 27.1 million tonnes as traders preferred higher-quality, cheaper corn from overseas.
State media reported that production growth was stagnant due to a lack of arable land, small scale of production, and a lack of farmers and agricultural technology.
According to 2021 data from the World Bank, China's per capita arable land is less than one-third that of Brazil and one-sixth that of the United States.
In a country where a significant portion of the land is rocky mountains and desert, degraded and contaminated soils leave little room for expansion.
The government, which has increasingly called for the protection of fertile black soil, is due to complete a four-year soil survey in 2025. The previous survey, in 2014, found that 40 percent of agricultural land was degraded by excessive chemical use and heavy metal pollution.
To make up for that, China is pouring millions of dollars into research into growing water-intensive crops like rice in the deserts of Inner Mongolia and Xinjiang.
The company aims to develop more farmland by turning sand into soil and growing salt-tolerant crops, but industry executives say the strategy will take time, fertilizer, irrigation and It will require significant investment in biotechnology.
One obstacle is that small farms dominate in China, and older farmers may not be able to afford to buy or operate machinery such as drone sprayers, more productive seeds, or technology such as big data and AI.
The average size of a farm in China is 0.65 hectares, compared to 187 hectares in the US and 60 hectares in Germany. China is gradually moving towards consolidating its fragmented farms.
After decades of hesitation, the country is gradually moving ahead with the introduction of genetically modified crops, and this year it is introducing high-yielding, pest-resistant corn and soybean varieties in hopes of accelerating production increases. It also approved the planting of gene-edited disease-resistant wheat.
China's soybean yield is 1.99 tonnes per hectare, below the 3.38 tonnes and 3.4 tonnes in Brazil and the United States, both of which are accepting genetically modified soybeans.
But analysts say the government's target for reducing soybean imports is unrealistic. At best, China could reduce its reliance on soybean imports to 70 percent from its current level of more than 80 percent, said Carl Pray, a professor of agriculture at Rutgers University in the United States.
Almost all soybeans produced in China are high-protein varieties used to make tofu, and to replace imports, it is necessary to rapidly expand production of high-oil varieties used for edible oil, but even with repeated research, this is difficult. He said:
“There just isn't enough land to produce enough soybeans to replace imports from Brazil and the United States,” Pray said.
(1 dollar = 7.2276 yuan)
(Reporting by Mei Mei Chew; Editing by Tony Munro and Sonali Paul)
