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Trend of China’s Grain Supply

by  Cai Jin.(1997)

China is both a major grain producer and consumer. The solution to feeding 1.2 billion Chinese people involves settlement of the food problem for one-fourth of the global population.

The grain issue, therefore, concerns many at home and abroad. A few years ago, the American Lester R. Brown worried “Who will be able to feed China?”. But, China’s development proves this worry is unnecessary because China is already basically self-sufficient in food grain supply.

—The grain self-sufficiency rate is now close to 100 percent. Although not on par with such gigantic grain producers as the United States, Canada and Australia, the rate is close to the world average.

—Per-capita possession of grain, averaging 330 kg (excluding soybean and potatoes), has reached the world’s average level.

—The per-unit grain output has topped 4,500 .kg per hectare, far exceeding the worldwide average and attaining the global front ranks.

—The grain reserve rate, 25 per- cent, has surpassed both the minimal level (17-18- percent) set by the United Nations Food and Agriculture Organization and the world’s average level (20.4 percent)

The achievement of food supply self-sufficiency in a country with a huge popu1ation and limited cultivated land is a remarkable feat. Recent years have seen successive good harvests, with output last year hitting 490 million tons, despite devastating floods. Stocks have soared to 200 million tons. In fact, owing to a slowdown in the growth of domestic demand, the present supply in the food market slightly outstrips  demand.

Steady Growth in Demand

Food demand in China will growth steadily for a long time to come, due to the following factors:

First, natural population growth is a basic factor to push up grain demand. According to estimates, despite strenuous efforts to control population growth, the nation’s population will still reach 1.3 billion (excluding Taiwan) by 2000 and will further surge to 1.4 billion by 2010. If the per-capita food consumption continues to maintain the present level, population growth alone will raise annual demand by 4 billion kg. Hence, the country’s food demand is expected to rise by nearly 50 billion kg in the coming decade. Before the population reaches its peak around the year 2030, its growth will remain an important factor to drive up food demand.

Second, changes in the food structure promote further demand for fodder grain. With the constant increase in the Chinese people’s incomes, the food consumption structure will change accordingly, leading to a decline in the direct consumption of grain and the growing consumption of meat, poultry, eggs, milk and other animal-oriented foods.

Yet, demand for grain will actually rise not fall -because, the transformation from a grain-dominated to an animal-oriented food structure is not a 1:1 direct shift. For instance, the consumption of each kg of chicken, pork and beef is equivalent to that of 2, 4 and 7 kg of grain respectively. Compared with developed countries, current animal food consumption in China is still limited. But, with the  constant increase in the amount, the demand for fodder grain will surge up significantly.

Third, grain used in industry will go up along with changes in the food structure. For instance, if each adult drinks a bottle of beer a day, the nationwide demand for grain will increase by nearly 400 million kg.

Hence, China’s grain demand is expected to rise by around 1 percent annually in the coming decade or so, so that consumption will top 500 million tons by 2000 and 550 million tons by 2010.

Conditions for Increasing Output

It is out of the question for China to maintain its grain supply balance before 2000. But after that, this is possible by focusing on increasing output.

Firstly, efforts will be made to stabilize the area of land planted to grain, limit the use of cultivated land for other purposes, reclaim wasteland in a planned way, develop arable land resources, and increase the multiple crop index. As long as 1-mu (1/15 hectare) per-capita sowing area is maintained, China will have the resources base to meet increased food demand. It is anticipated that China’s cultivated land for grain production will be kept at 66.67 million hectares annually. If the multiple crop index can be raised from the present 155 percent to 160 percent, China will still be able to maintain the 1-mu per- capita level by the year 2030.

Secondly, the country will strive to enhance per-unit output, and through intensifying the construction of water conservancy projects, increase the proportion of irrigated area from the present 51 to 70 percent. Meanwhile, efforts will be pooled to cultivate improved strains to increase the per-unit output. China’s per-mu grain output registered a growth rate of 4.3 percent annually between 1978-94. As long as the growth rate is kept at 1 percent, the increased demand for grain consumption will be basically met.

Thirdly, the grain market mechanism will be completed and the price of grain stabilized so farmers can maintain their enthusiasm for grain production.

Lastly, energetic efforts will be made to develop grain substitutes, especially fodder grain substitutes.

When the aforementioned measures materialize, the goal for increasing grain output will be achieved, belying Mr Brown’s pessimistic prediction that China’s grain output will decrease by 0.5 percent annually. In fact, China has sufficient conditions to raise annual output by 1 percent.

Appropriate Imports

Given that grain output varies in different years, along with the need to regulate the product mix, it is necessary for China to import an appropriate amount of grain, chiefly wheat. Besides, although it has fairly large potential for increasing grain output, greater inputs than the international level are needed to increase each ton of grain. Hence, from the economic perspective, it is conducive for China to maintain an appropriate amount of grain imports.

According to experience over the past decade, some 6-8 percent of China’s grain supply comes from the international market. Maintaining this rate is conducive to keeping balance in the country's grain supply fairly long time. Moreover, instead of creating major fluctuations in the world market, it has helped stabilize global prices. Of course, necessary trade protection measures need to be taken to ensure imports do not get out of control.

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