Brian Gardner's Blog

The increasing prosperity of the world’s largest concentration of people – China – is likely to put increasing pressure on the world’s food supply. With a population of more than 1.3 million, an annual economic growth rate of c. 7.5 per cent, and a growing middle class, China is going to increase substantially its demand for meat, dairy products and what are generally considered to be higher quality foods. With limited agricultural land and other food growing resources, the country is likely to be increasingly dependent on imports.
Conscious of the country’s future food needs, the Government in Beijing is taking important steps to increases its food security. Improved grain production and stockholding , as well as farm product supply, are listed in most recent official documents as the government’s main priorities. The government has recently restated its intention to continue to support domestic farm prices by increasing state stockpiles and to stimulate agricultural production. The Government intends to speed up the transfer of rural land from the state to the private sector in order to improve efficiency and develop large-scale commercial farming. In its ‘number one document’ for 2013, setting the agenda for agricultural reform, the government says it will focus on modernising agriculture and grant more subsidies to large-scale landowners, family farms and rural co-operatives.
A subsidy of 2.58 billion yuan (€323 million) is to be initiated to cut lending rates for projects aimed at boosting farm production and farmers’ income. An additional 100 million yuan will be provided for food safety risk surveillance. But given its agricultural limitations, the country has to seek external sources of food supply. To further increase its future food security China is increasingly involved in acquiring access to food producing land in Africa. The Sudanese Government recently signed an agricultural co-operation agreement with Beijing that gives Chinese companies options to operate in the agrifood sector in Sudan.
The recent OECD-FAO Agricultural Outlook for the period up to 2022 projects that China’s consumption growth will slightly outpace production by around 0.3% per annum, similar to the trend of the past decade. Combined with upgrading of the average diet this will lead to a further opening of China’s food market to imports, it says. It confirms that consumption growth will be stimulated by economic growth and rising incomes and a population shift from rural to urban areas. China’s rural population has declined from 844 million in 1992 to 695m in 2012 with the UN projecting a further decline of 100m people by 2030.
The future food demand expectation for China alone would appear to challenge many of the current estimates and assumptions about the world food supply and demand situation by the end of this century. While the FAO has most recently suggested that its estimate of the need for a 70 per cent increase in food production by 2050 needs qualification, this could be a serious under-estimate. What has to be bore in mind is that the FAO figure is an extrapolation of current trends. It does not appear to take account of the rising dietary expectations of the richer emerging economies. Nor does it allow for the fact that in the hungriest parts of the world –such as many Sub Saharan Africa countries – there could be a considerable improvement in incomes and therefore daily food intake levels. Calculations which take these factors into account are likely to conclude that the eventual demand increase will be much larger.

 

 

 

 

 

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