ENSURE CHINA’S FOOD SECURITY

ENSURE CHINA’S FOOD SECURITY*

December 23, 2013

Food is the paramount necessity of the people. “Of the eight aspects of governance, food stands atop.” In our large, populous country, feeding the people has always mattered most in national governance. Just as Mao Zedong said, “Food is the top priority.” As long as we have food in our hands, we will never panic. 

In our country, we have more than 1.3 billion mouths to feed. In China, stability is ensured as long as there is no major problem in food supply. Everyone knows this, but in practice, particularly when the agricultural situation is good, it is easy to become complacent. For this reason, I want to start by emphasizing the importance of ensuring food security in our country.

Talking about food security reminds me of food stamps. This year marks the 20th anniversary of the abolition of food stamps in our country. The NPC and CPPCC annual sessions in 1993 marked the first time that the deputies did not need food stamps for meals. In May of the same year, Beijing announced the formal cancellation of food stamps. Other provinces and equivalent administrative units followed suit, making food stamps a thing of the past. This was a landmark event in our reform and development.

Having said that, I am not going to talk about the achievements we can see with our own eyes. Instead, I want to say that we must keep history in mind, beware of amnesia when it comes to food supply, and take care not to forget the pain after the scar has healed. There was a time when a tiny scrap of paper had a direct impact on people’s right to food. There was a time when having something to eat was the most difficult thing for us.

For people of my age, the use of food stamps seems like something that happened only yesterday. Our generation has, to varying extents, memories of never feeling fully fed, or even of going hungry. During the three years of natural disasters from 1959 to 1961, I was studying at a boarding school, and the food there was far from sufficient. We made do by having soup for the evening, a situation which we called “eating to 70 percent full”. During the Cultural Revolution, I was sent to work in the countryside. At one point, I did not see a droplet of cooking oil or any meat in my bowl for three months. That winter, my family managed to send me some money, and together with the classmate who lived in the same cave dwelling as me, I bought some frozen pork that had been stored in a stone trough. As soon as we got back, we cut the meat into slices and started eating without even cooking it. It tasted so delicious! But soon we stopped eating or we’d have none left for cooking. We have all been through days of such poverty.

Those who do not plan well ahead will find trouble at their doors. Now, we cannot assert with certainty that this kind of problem will never recur in future. Have we solved the issue of food security in our country? We cannot come to this conclusion yet. Let us not be naive. How many big famines have happened in our history? The bodies of people who starved to death littered the wilderness, and desperate people even ate their own kind. Those tragedies of the past must never be repeated under any circumstances. 

Ensuring national food security is a constant challenge, and we should never let our guard down. It is imperative to adhere to the national food security strategy of self-sufficiency by relying on domestic food production, ensuring food production capacity, encouraging moderate imports, and boosting technological support. Food production should always be the top agenda in addressing issues related to agriculture and rural areas.

First, we in China must always have control over our own food supply. Our hard work over the years has resulted in remarkable progress in food production. This year, our total food output exceeded 600 million tonnes. Our per capita food output has remained above the world average for many years in a row and we have achieved basic and consistent self-sufficiency in food supply. This is a notable achievement.

Although we have achieved a full decade of increases in food production, we are still unable to keep up with the rapid growth in demand and the constant structural changes. The gap between production and demand has continued to widen; imports have continued to climb significantly. This year, our food output was higher by 171.25 million tonnes than in 2003. Even so, in the first 10 months of this year we imported 9.85 million tonnes of grain and 49.75 million tonnes of soybean. Only a little over ten years ago we were a soybean exporter.

With our growing population, ongoing urbanization, and improving living standards, the demand for food is bound to trend upwards. China currently has about 6.5 million more people every year and an annual increase in the urban population of about 21 million. Every year, population growth pushes up the demand for food by some 5 million tonnes. In addition, with changing patterns of food consumption and rural people moving into cities and towns, the demand for food will be even greater. By 2020, the demand for food is expected to approach 700 million tonnes. We can envision the pressure of meeting such a colossal demand. The rapid growth in the consumption of food and other agricultural products will continue, and the trend will not reverse for a long time. On the food issue we have a tight balance. We have to achieve a basic equilibrium between food supply and demand on the one hand, and prevent a drop in food prices that results from an easing of supply on the other, as the latter would reduce the incentive for growing grain. This is a dilemma. Maintaining this balance is like walking on a tightrope; it requires fine-tuning of both sides. An improper adjustment would throw us out of balance. We want to achieve an ideal state, but getting it right depends on our aptitude as well as the overall environment.

On the whole, we do not have a rock-solid foundation for ensuring food security and the situation is still serious. At no time should we claim complacently that we have secured the food supply. On this question, we cannot bet on luck or act recklessly. Should a serious problem arise, we might struggle for many years and no one will be able to come to our rescue. We must always have control over our own food supply, and keep the initiative in food security firmly in our own hands. 

Second, we should mainly rely on domestic food supplies. Feeding our people by relying on domestic food supplies is a major policy dictated by our national conditions from which we do not deviate. Only when a country has firmly established basic self-sufficiency can it hold the initiative in food security, and thereby keep overall socio-economic development under control. Counting on others for food will never work; it will only leave us at their mercy.

Look at the truly powerful countries in the world – countries without a soft underbelly. They are all able to feed their own people. The United States is the world’s No. 1 food exporter and its strength in agriculture is unmatched. Russia, Canada and major countries of the European Union are also grain powerhouses. The overall strength of these countries is tied to their strong food production capacity. This is why the food issue should be viewed not only as an economic issue, but also as a political issue. Guaranteed national food security is an important foundation for economic development, social stability, and national security.

The world has 7 billion people. Under normal circumstances, total annual grain production is about 2.5 billion tonnes, and the amount available for international trade is around 300 million tonnes; 250 million tonnes of soybeans are produced annually, of which no more than 100 million tonnes are available for international trade. Currently, annual global trade in food is approximately 300 million tonnes, which is equivalent to only half of our country’s requirements; trade in rice is about 35 million tonnes, just about a quarter of our rice consumption. How much more can we import from the world grain market? And even if we could buy all the grain on the international market, it would not even meet our needs for six months. Therefore, our rice bowl must mainly be filled with grain produced by ourselves; this is the bedrock that underpins our food policy: free of dependence on buying or even begging for food.

How can we ensure national food security? In the past, we put the emphasis on ensuring all food supplies of all types. This was the only option available considering the situation at the time and we by and large managed to do it. Now, with the rapid increase in domestic demand for food, if we were to rely on ourselves for all our food supplies, there would not be enough land or water, and the eco-environment could not sustain it either. In such circumstances, we must be even clearer about the priority of food security in our work. We have to allocate resources rationally, and focus on the most fundamental and the most important aspects first – to ensure basic self-sufficiency in grain and absolute security in staples. The whole Party must be clear about this need. We must never think that we can lower our guard for a moment on food production as it is no easy task to achieve the necessary quantity and quality of both. 

Third, we must hold fast to the cultivated land red line. I explored this issue in depth at the Central Conference on Urbanization, and I want to emphasize it again here. There is nothing to lose in sounding the alarm bell repeatedly concerning the issue. The foundations of national food security lie in cultivated land, which is the lifeblood of food production. While farmers may leave agriculture, cropland cannot be used for any purpose other than farming. Should our cultivated land be used for something other than food production, we will lose the foundation that we rely on for food.

Cultivated land is a limited resource in our country. Although the acreage of cultivated land has risen somewhat as detailed in the second national land survey, it is a change in book figures only, with the actual area remaining the same. These arable lands are all under cultivation and have not been left idle. The increased acreage as shown in the land survey does not translate into greater production capacity. The total area of farmland must stay above the red line of 120 million hectares, and the acreage of existing cultivated land must remain stable. To put it in extreme terms, the cultivated land should be protected in the same way as cultural relics are protected, or even as giant pandas. You have all made a firm pledge to keep the farmland red line and you must honor it. There is no room for maneuver whatsoever.

Over the years, industrialization and urbanization have taken over vast swathes of cultivated land. Despite the legal provisions on balancing the occupation and replenishment of arable land, there are cases in which more land has been occupied than replenished, superior land has been taken and replenished with inferior land, nearby land has been taken and replenished with land in remote areas, and paddy fields have been taken and replenished with arid land. In particular, whole swathes of high-standard farmland that had been built at a high cost, with ensured good harvests come drought or flood, have been occupied as well. 

The red line for cultivated land was drawn not only in quantitative terms, but in qualitative terms as well. If you take away one patch of high-yield land on the outskirts of a city and then level a piece of land in a ravine to replenish the appropriated land, can the two pieces of land yield the same crop? They are worlds apart in quality. Even double the size, low-yield land such as this cannot compensate for high-yield land – it would be a total deception. Such practices are very dangerous and will end in disaster sooner or later.

According to the figures of the second national land survey, China has only 33 million hectares of paddy fields and 28 million hectares of irrigated land which, put together, account for less than half of the total cultivated land area but provide over 70 percent of the grain and over 80 percent of the main cash crops. They are our life-savers. Over the past dozen years or so, the acreage of paddy fields in the five southeastern coastal provinces alone has declined by 1.2 million hectares, the equivalent of all the paddy fields in Fujian Province. Such “balancing” must be rectified.

“When you have fertilizer but no water, you can do nothing but cry to the sky; when you have water but no fertilizer, you will harvest only half the grain.” To solve the problem of living at the mercy of the elements, one fundamental step is to develop farmland water conservancy. Irrigation and drainage systems remain a marked deficiency in China, with many localities still relying on the facilities built in the 1960s and 1970s. We therefore must be determined to make up the deficiency. It is imperative to pay attention not only to the “main arteries” such as large-scale water conservancy projects, but also to the “capillaries” – “last-mile” facilities that pipe water to the fields. We should designate permanent basic cropland and step up the construction of high-standard farmland with assured high yields whether in times of drought or flood.

As farmers put it, “A good mother raises a good child, and good seed makes a good crop”; “if you don’t select seeds when planting, you will end up empty-handed even if you toil to your death.” We must develop our national seed industry, and step up the cultivation of fine strains with our own intellectual property rights, to ensure national food security by addressing the problem at source. One seed can change the world and one piece of technology can create a miracle. We must invest a great effort, increase input, focus on innovative mechanisms, stimulate vitality, and place a premium on combining scientific research and production so that agriculture can truly be equipped with the wings of science and technology. 

Fourth, we must cultivate and arouse the enthusiasm of both farmers and local governments in food production. To bring about steady growth in food production, we must make it profitable for farmers to grow grain crops, and incentivize food-producing areas. To this end, we should leverage the role of market mechanisms and provide firm government support.

Food prices concern both producers and consumers. In the Warring States Period, Li Kui said, “If rice is too expensive, it hurts the people; if it is too cheap, it hurts the farmers. If the people are hurt, they will be displaced; if the farmers are hurt, the country will be impoverished.” Food prices therefore should be kept at a reasonable level to balance the interests of both producers and consumers. Whether farmers are willing to grow grain crops and how much they are willing to grow depend on how much they can earn. I have made field trips to some localities where the officials and people told me that the prices of agricultural supplies such as chemical fertilizers and seeds had gone up faster than the price of grain crops, that the comparative efficiency of growing grain crops was getting ever lower, and that the income from tilling a whole patch of cropland was less than that from working for a wage for a few days. How can we synchronize the growth of farmers’ incomes and food production? This is a matter that warrants particular consideration. 

The current agricultural subsidy policy has a positive impact and is welcomed by farmers, but there exists to a certain extent the egalitarian practice of “everybody eating from the same big pot”. In future, the general direction cannot be changed, the total amount of subsidies cannot be reduced and should be increased as best we can, but the specific implementation measures must be improved by optimizing support so that subsidies can be used in a more precise and targeted way. We must explore and put in place a mechanism linking agricultural subsidies with food production to increase subsidies to those who produce more food and direct our limited funds to where they matter the most. We must continue to operate a minimum purchase price for grain and increase it as appropriate to keep the prices of agricultural products at a reasonable level.

In the long run, we need to follow the principle of pricing by market and separating pricing from subsidies when we explore and implement a target price policy. We need to improve the grain price formation mechanism, and gradually establish a mechanism that subsidizes producers when prices are low and compensates low-income consumers when prices are high.

Fifth, we will regulate the food market with grain reserves. It is a tradition in our country to establish Changping granaries which play an important role in stabilizing the market, preparing for shortfalls, and compensating farmers. As our country has a vast territory, it is necessary to store more national grain reserves as appropriate and spend more money on this. While it is essential to have a higher security factor, we must also pay attention to value for money, efficiency, and effectiveness. And the government cannot do it all. We must give market players the incentive to purchase and store grain, and effectively utilize storage facilities available in society to stockpile grain.

We must manage and use the grain reserves well as they are what keep the people’s rice bowls full. We cannot always say that the stockpile is full and then fail to have grain available in times of urgent need. There have been too many lessons in this regard both in the past and present, at home and abroad. The Book of Songs contains these words: “Big mice, big mice, eat no more millet we grow.” In recent years, many cases of wrongdoing have been investigated concerning the national grain depots. Violations of law and discipline must be investigated and dealt with. We will never allow the “grain rats” to wreak havoc and squander the grain at will.

Sixth, central and local governments should share responsibility. In ensuring national food security, the central government is duty-bound to assume the primary responsibility. It should bolster support for food production in these areas: construction of major water conservancy infrastructure projects, transformation of low- and medium-yield farmland, promotion of scientific and technological innovation, development of IT services, improvement of the market system, assurance of the quality and safety of agricultural products, and payment transfers to major production areas. Local governments at all levels must have an awareness of the overall picture, increase input in food production, and consciously assume the responsibility for maintaining national food security rather than dumping all the burdens onto the central government. 

Why must we insist on the practice of provincial governors assuming responsibility for the “rice bag”? It is because all localities must act and work together to strengthen capacity in food production, storage, and distribution, and effectively protect cultivated land. We will boost local motivation by increasing financial subsidies and rewards for major producing provinces and counties. We need to progressively establish and improve a mechanism under which the main producing areas are properly compensated, so that the major producing counties can reap real benefits and develop. We cannot let those who produce more grain suffer greater losses.

In recent years the geographic pattern of food production in China has undergone significant changes with shifting trends in food production and sales. Some previously important food-producing areas in south China have gradually become major consuming areas and are now on the receiving end of food supplies from the north, reversing the flow. At present, more than 75 percent of our total food output, more than 80 percent of commercial grain, and about 90 percent of the grain outflow come from 13 major producing provinces and autonomous regions. Among these, the contribution of the main producing areas in north China has continued to climb. This change challenges food production and security and restrains the former as the north is very dry. On the other hand, the share of food production in the major consuming areas and the production-consumption balance areas has continued to fall, with the self-sufficiency rate of the latter declining, and the production-demand gap of the former widening. 

Concentration of food production in major producing areas is conducive to fully leveraging the comparative advantages of different regions. However, it should also be noted that risks in food production and allocation are also concentrating. We all know that we cannot put all our eggs in one basket, a type of reasoning also applicable to the issue of food security. All provinces, autonomous regions and municipalities directly under the central government, regardless of the amount of their cultivated land, must take up the responsibility for food production. Any locality that has done away with food production has abandoned its responsibility. The departments concerned should come up with hard constraints so that local governments, especially those in the major grain consuming areas, can effectively fulfill their responsibilities.

Seventh, we should make good use of international and domestic markets and resources. Conditional on domestic production ensuring basic self-sufficiency of grain and absolute security of staple food, it is necessary to increase imports, as appropriate, and accelerate the pace of agricultural businesses going global in order to lessen the pressure on domestic agricultural resources and the environment, and make up for the shortage of some domestic agricultural products. But the scale and tempo of imports must be properly controlled to prevent shocks to domestic production which could cause significant damage to farmers’ employment and income growth. 

Active and prudent utilization of the international agricultural product market and external agricultural resources is a long-term strategy which China has been implementing consistently. Statistics show that through international trade and cooperation we have used the equivalent of 46.67 million hectares of planted land for grain, soybean, cotton, sugar and other crops. Now, we need to make active and prudent efforts to expand the scope of this strategy, but we must plan well before making the move. 

With the supply and demand of global grain and other major agricultural products largely unchanged, if we suddenly increase imports substantially and cross the tipping point, this will inevitably cause global food prices to skyrocket, making China an easy target of attacks, and the losses, therefore, would outweigh the gains in political, diplomatic, and trade terms. Also, it is by no means an easy task to lease or buy land, or to engage in cooperative development in other countries. South America and Africa, among others, have a large amount of arable land that can be cultivated, but it will be a lengthy process that involves a lot of investment before we can see results. Land is a sensitive issue for any country. It is easy to trigger nationalist sentiments. Therefore, when boosting agricultural outbound investment, we need to have a comprehensive analysis of the economic, technological, and even political risks, and improve our preparedness and response capabilities.

To start with, we need to figure out which agricultural products must be guaranteed at home before ascertaining what, how much, from where, and how to import. With respect to outbound investment, we must carry out detailed research into questions like where to go, how to do, and how to use the agricultural products thus produced. In imports, safety should be the focus of our attention. One is species safety, and the other is the risk of monopoly that might grant any other party a stranglehold over us. We should draw on the experience of major international grain merchants by building storage and logistical facilities in grain producing countries across the world, with others producing and us procuring. With the sources of grain in hand, we have trade under control and thus control overpricing as well. It is no easy task to compete with century-old, well-established global businesses. It calls for real finesse, but we must enter the competition. With a large domestic market, we should have the confidence to cultivate our own large grain traders. For state-owned enterprises to go global, we must improve relevant systems and mechanisms to prevent corporate management misusing state resources for their private gains, which would be a waste of state investment.

One thing must be made clear: When we talk about expanding the import of agricultural products in short supply at home, and about accelerating the pace of agriculture going global, this in no way means any change in our major policy of depending on domestic production to ensure food security. It must not in any way be misconstrued as permission to relax efforts in domestic food production, which would threaten the overall situation. 

Eighth, we must pay careful attention to the need to save food. There is a huge amount of waste in food production, processing, distribution, and consumption, with wastage on the dining table particularly alarming. This stems from too much emphasis on face and an extravagant lifestyle. A survey has estimated that the food wasted on dining tables in China costs as much as RMB200 billion a year, which is equivalent to the annual staple food requirements for more than 200 million people. A few days ago, there was a media report that a janitor who hated waste ate the steamed buns and rice scavenged from dumpsters in a university canteen. Examples of waste are not rare. The fact that some university canteens have become the epicenter of wasted food is most shocking. Even if life is getting better, we have no right whatsoever to waste food. This negative trend must be stopped. 

Education on saving food should start with children. We all received a strict upbringing in this when we were young. Our parents did not allow so much as a single grain of rice to be wasted, far less allow leftovers.

Hoeing in the field at high noon, 
Our sweat drips into the soil. 
Who knows the meal in our bowl, 
Every grain is from toil.

There is plenty of material about food saving in Chinese culture, which should be instilled in children from an early age to promote good social norms of thrift and saving. It is essential to strengthen the practice of saving food, starting with the dining table, the canteens of universities and other institutions, and the catering industry, starting with kindergartens, nurseries, and schools at all levels and of all types, and starting with every family, to make food saving the norm throughout society. At the same time, we must pay attention to tackling waste in the process of food purchasing, storage, processing, and sales. The problems in this area are also serious.

* Part of the speech at the Central Conference on Rural Work.

(Not to be republished for any commercial or other purposes.)