The Van Trump Report

Interesting Insights Into China’s Food Self-Sufficiency Struggles

Despite China’s decades-long efforts to achieve food self-sufficiency, the country has been a net importer of agricultural products since 2004. In fact, China imports more soybeans, corn, wheat, rice, and dairy products – among others – than any other country in the world. Over the last two decades, the country’s self-sufficiency has actually been going backwards and experts believe this pattern will only continue as China’s amount of arable land continues to decline.

For over seven decades now, Chinese Communist Party leaders and policymakers have prioritized food security as a prerequisite to maintaining power and critical to national security. It was even written into China’s National Security Law in 2015, requiring the state to “take comprehensive measures to ensure food security, safety, and quality.”

A lot of China’s obsession with food security stems from the Great Famine in 1959–1961, the largest famine in human history. The origins of the famine trace back to Mao Zedong, the first chairman of the Chinese Communist Party starting in 1954. Mao launched what’s known as the “Great Leap Forward” in 1958 that aimed to rapidly reform China’s economy from an agrarian society into a global industrial behemoth.

Tens of millions of peasants from the countryside were ordered to work on massive infrastructure projects and on the production of iron and steel. Some private food production was banned and newly formed agricultural communes planted less land to grain, which at that time was the source of more than 80% of China’s food energy.

Fabricated reports of record grain harvests were issued to demonstrate the superiority of communal farming. In reality, grain production plummeted and by the spring of 1959, a third of China’s provinces were in famine. Between 1959 and 1962, more than 30 million Chinese people died. In 1962, Liu Shaoqi, then President of China, formally attributed 30% of the famine to natural disasters and 70% to man-made errors.  

Since taking office in 2013, Chinese President Xi Jinping has aimed to reach the country’s self-sufficiency goals by boosting domestic supply but has seen little success. According to United Nation’s data, between 2000 and 2020, the country’s food self-sufficiency ratio decreased from 93.6% to 65.8%.

A primary reason is China’s loss of arable land. Between 2013 and 2019, China lost more than 5% of its arable land due to factors such as excess fertilizer use and land neglect, according to Chinese government figures. Experts warn that extreme weather, environmental degradation, water scarcity and pollution, and climate change will likely exacerbate the problem.

Another factor is the higher costs and lower efficiency to grow certain food products in China. For example, the cost to grow soybeans in China is 1.3 times what it is in the United States, and the yield is -60% less, according to China’s Ag Ministry. Additionally, fewer Chinese are incentivized to farm because wages are far lower than for factory workers and other urban occupations.

China has made a big show of supporting agricultural production this year amid a continuous string of weather disasters that have wreaked havoc on key farming regions. Still, grain output for this year will likely fall short of the government’s goals. China’s National Bureau of Statistics claims summer grain output has seen a -0.9% decline from last year, though many ag insiders believe the losses are much greater. Flooding is also damaging fall crops.

China’s surge in ag imports this year supports the production doubts. China’s customs administration data shows soybean imports in July 2023 reached 9.7 million metric tons (MMT), up +15% from last July. Soybean imports for the first 7 months of 2023 reached 62.3 MMT, up +15% from last year, while edible oil imports totaled 2.4 MMT, up +119% from last year. China’s meat imports for January-July 2023 totaled 4.1 MMT, up +9.5% from last year.

Maybe even more telling, the folks over at Dim Sums point out that China state media outlets have recently replaced their warnings about the dangers of importing food with articles proclaiming agricultural imports as a virtuous element of food security. Communist Party-run Economic Daily wrote that “some people” have baseless worries that “China will be controlled by others if it imports food.” The news outlet even spun China’s increasing ag imports as a positive, saying “China is playing an important role in international agricultural markets.” Dim Sums’ writers speculate that China officials may see bigger signs of food production issues than what they are revealing to the public. (Sources: DimSums, South China Morning Post, Council on Foreign Relations, Food and Agriculture Organization of the United Nations)

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