May 13, 2015, by editor
Chinese agriculture in the wake of the global food crisis
Written by Francesca Bray.
In 2007-8 a food crisis rocked the world. A concatenation of climatic, economic and financial factors sent global food prices rocketing. Drought in Australia, then the world’s second largest wheat exporter after the USA, had cut the 2006 wheat harvest from 25 to 10 million tons. Bad weather reduced the 2007 rice harvest throughout the rice-exporting nations of Southeast Asia. Rice prices shot up 30% in Bangkok, and still higher in importing nations like Senegal. Rust blighted cereal production in Africa. In the US and South America, increasing amounts of maize, soy and sugar-cane were being diverted from human or animal consumption to biofuels, just as demand for meat and dairy was soaring in countries with emerging middle-classes. Food surpluses sank, futures markets went crazy, prices rocketed and riots broke out in cities from Cairo to Jakarta.
As the emergency unfolded, key grain-exporting nations shut up shop. Russia and Argentina banned the export of wheat. Indonesia, Vietnam and China banned rice exports. Food-importing nations like the Philippines, the world’s largest importer of rice, became desperate, cajoling the World Bank to reinforce free-trade rules. Facing angry crowds in the cities, desperate farmers in the countryside, and resentful and suspicious trading partners, governments around the world sought new ways to guarantee the security of their national food supplies.
The Chinese government’s response was necessarily complex. Because of the nation’s sheer size and its growing involvement in world markets and world affairs, China’s policy decisions have been anxiously watched, if not always accurately represented.
One knock-on effect of the crisis was the proliferation of ‘land-grabs’ through Africa, Southeast and Central Asia and South America. This refers to the purchase or leasing, by governments or corporations from rich nations, of large tracts of farmland outside their national frontiers to produce food and other natural resources for their own use. Singapore and Saudi Arabia are two financially rich but land-poor nations that have seized the opportunity to secure food supplies through such arrangements. Agribusiness companies from the US and Europe are also prominent players in the land-grab game, which their numerous critics view as a form of neo-colonial exploitation. Affluent, and with a notoriously low ratio of arable land to population, China would seem a natural candidate for land-grabbing, and is frequently accused of having grabbed huge tracts in Africa and elsewhere. But research shows that the large-scale Chinese engagements in Africa are actually either inter-governmental development schemes or joint-venture businesses, and are geared at supplying local markets. While it may not be an evil neo-colonial land-grabber, however, the Chinese government is actively developing both imports and exports of agricultural raw materials and processed goods, building up Chinese agribusiness corporations to compete with TNCs in this arena (Schneider 2013).
In fact, although its farmlands are restricted, according to official figures, China has effectively maintained self-sufficiency or even a surplus of its main staples, wheat and rice, for several decades. However, maintaining sustainable and adequate levels of productivity of cereal-farming and other basic foods in the Chinese countryside is now an urgent concern.
In the 1980s, the collectivist farming of the People’s Communes was disbanded in favour of small family farms. The new semi-private system initially unleashed a surge in output and marketable food surpluses. For over two decades, peasant-scale farming kept pace with evolving consumer demand. But at a price. Small production units are not efficient users of water, machinery or other capital resources. To maintain yields, farmers use excessive amounts of pesticides and fertilisers. Soils are degraded, water-tables drained and water-courses polluted: in many areas of China, farming is near collapse.
Meanwhile Chinese consumers are increasingly wary of chemically-tainted foods. Often food scandals are prompted when producers resort to desperate means to keep afloat, and global instability of commodity prices is often a trigger. As public demand for meat and dairy soared, China became the world’s largest importer of soybean. When soy prices rocketed in 2008, some dairy farmers fed their cows melamine as a cheap way to increase the protein content of the milk. The government has become increasingly responsive to food safety as a legitimate public concern. Effective regulation is difficult when production is dispersed through a network of small enterprises, and both the government and many consumers would like to see more centralised organisation of food production, processing and distribution.
The values of an era are not easily abandoned. Increasing the scale of farming would help to control waste and raise returns to inputs, yet the Party cannot countenance either a return to the socialist farms of the People’s Communes, or a capitulation to capitalist agribusiness and industrial farming. It remains committed to supporting the rural population, rather than bringing in huge factory farms.
Today the government is investing lavishly in research into improved varieties and farm practices to support an environmentally and socially sustainable ‘second Green Revolution’ for small-scale farmers. Developing new crop varieties that are hybrids between GMOs and traditional crosses, whose DNA will not be the intellectual property of private corporations like Monsanto, is part of this small-farmer oriented package. In parallel with technological improvements, the government is also exploring institutional formats that ostensibly preserve a rural society of small farmers while incorporating their land, labour and output into large-scale production units and vertically integrated commodity chains. Specialist cooperatives and Dragon Head Enterprises are just two of the variants of state-corporate agribusiness that by 2011 were working with 110 million rural households, controlling 60 percent of the crop area, 70 percent of livestock production, and 80 percent of aquaculture.
The global food crisis revitalised the Chinese government’s long-standing concern to ensure national food security, while developing a modern consumer economy. Unashamedly interventionist, the Chinese state seeks to resolve the tensions and incompatibilities between environmental and social sustainability, between consumer demands and producer limitations, between the wastefulness of small-scale farming and a socialist commitment to rural livelihoods, by developing carefully tailored technical improvements applied within ingenious institutional hybrids of state and private enterprise – the hallmark of what Deng Xiaoping mischievously referred to as socialism with Chinese characteristics.