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A Matter of Security
Grain security is not only a foundation for China's social and economic development, but also a backstop to deal with complex international situations
By Lan Xinzhen  ·  2019-09-03  ·   Source: NO. 36 SEPTEMBER 5, 2019

When the People's Republic of China was founded 70 years ago, much of the population went hungry as China was home to the largest number of impoverished people.

The past seven decades have seen China's grain production surge. In 2018, the country's per-capita share of grain was 471.48 kg, more than double the 209 kg in 1949, when it was unable to feed its 500 million people. Today, the 1.4-billion Chinese have more food than needed.

Moreover, in order to meet the diverse demands of citizens, China has been opening its grain market. It is now the world's largest agricultural product importer, the second largest trader in such products and their largest sales destination. It is the biggest purchaser of soybean, sugar and cotton worldwide.

To provide enough food, the Chinese Government has taken several initiatives over the past decades, from the commune system of collective agriculture to the household responsibility system adopted in the late 1970s, in which households were responsible for production and ensuing profit or loss. The latter system has fueled rapid increase in the output of farm produce and farmers' incomes. In recent years, farmers in many places have developed large-scale farms by transferring their land use rights, thereby enhancing productivity.

The central authorities attach great importance to agriculture. The first official document issued each year over the past 16 years addresses related issues, such as agricultural technology and infrastructure, grain price reform and reform in agricultural supplies. The investment in agricultural technology is rising and agricultural scientists have been developing high-yield rice and wheat.

The government offers subsidies to farmers who grow grain, and incentives to counties that produce bulk grain. It has abolished the agricultural tax and established a grain reserve system to store grain and stabilize prices.

To have enough grain is only the first step. The domestic demand for meat and milk is also growing, creating an expanding animal husbandry and poultry sector. In addition, China imports high-quality rice, wheat, corn, soybean and fruits.

Since joining the World Trade Organization in 2001, in line with the global trade organization's regulations, China fixed a quota for the import of the three staples—wheat, rice and corn—while soybean enjoys free trade. Imports within the quota enjoy zero or favorable tariff, while higher tariffs are applied to those exceeding the quota.

Why does China, the world's most populous country, have a quota on grain imports when it needs a large amount of grain daily to feed its large population? It's because, as President Xi Jinping said in 2018 during a trip to grain-producing regions in northeast China, the "rice bowl" of the Chinese should be filled primarily by Chinese grains and the Chinese should be the ones to ensure their own food security.

China was a major producer and net exporter of soybean in the 1980s, but because of the flood of cheap imports, Chinese farmers found it unprofitable to grow soybean. As a result, domestic production was nearly decimated. Today, more than 80 percent of the soybean consumed in China is imported. This has led to concerns that the same thing would happen to domestic production of rice and wheat once the import quota is lifted. The Chinese know the importance of grain. If a nation can't ensure grain security, its strategic security will slip into danger.

Having a quota for imports doesn't mean rejection of foreign grain. China has been maintaining a careful balance between its domestic and the external agricultural markets. It pursues a principle of relying on domestic production with a moderate import, importing foreign agricultural products to meet people's demand. This is good for the international market, while at the same time, it tries to protect the interests of domestic grain producers, traders and consumers.

Grain security is not only a foundation for China's social and economic development, but also a backstop to deal with complex international situations. The calls on China to relax its grain import quota are unreasonable as they do not take into account the necessity for China to ensure its food security.

Copyedited by Sudeshna Sarkar 

Comments to lanxinzhen@bjreview.com 

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