(Roughly) Daily

Zongyuan Zoe Liu on the growing issue of food security in China, and on what it might mean for geopolitics and geoeconomics…

…every day, China’s 1.4 billion people consume a staggering 700,000 tons of grain, 98,000 tons of edible oil, 1.92 million tons of vegetables, and 230,000 tons of meat. The leaders of the Chinese Communist Party (CCP) understand that “to the emperor, the people is heaven; to the people, food is heaven,” as the traditional saying goes, and they have prioritized food security as a prerequisite to maintaining power, especially after the calamitous famines of the Maoist era. For decades, coupons were necessary to buy any food—a system not fully ended until 1995, although largely dead in the cities by the mid-1980s. Despite China’s emergence as the world’s factory, the country’s No. 1 central document, the first policy statement issued by the top authorities each year, has centered on food security and the three issues of agriculture, the countryside, and farmers since 2004.

This year is no exception, as the Central Committee of the CCP and the State Council jointly released the highly anticipated No. 1 document for 2023 on Feb. 13. The document, which carries enormous weight, sets forth two critical priorities: safeguarding national food security and protecting farmland. While previous No.1 documents touched on these issues between 2004 and 2012, it was not until 2013, when Xi Jinping assumed leadership, that the annual No. 1 document established a consistent and resolute focus on food security and farmland preservation…

Xi is correct to recognize that preserving farmland is an indispensable factor in the quest to achieve food self-sufficiency. China has experienced alarming levels of farmland loss and deterioration in recent years. The most recent land use survey showed that China’s total arable land decreased from 334 million acres in 2013 to 316 million acres in 2019, a loss of more than 5 percent in just six years. Shockingly, more than one-third of China’s remaining arable land (660 million mu, a traditional unit of land measurement in China and equal to roughly 109 million acres, slightly larger than Montana) suffers from problems of degradation, acidification, and salinization.

The land has been eroding faster in recent years. The annual net decrease of arable land has risen from about 6 million mu (about 988,421 acres) from 1957 to 1996 to more than 11 million mu (about 1.8 million acres) from 2009 to 2019. This means that between 2009 and 2019, China lost farmland equal to about the size of South Carolina. China’s diminishing farmland is also losing productivity due to over-cultivation and excess use of fertilizers. China’s fertilizer usage in 2018 was 6.4 times that of 1978, but grain yield in 2018 was only 2.2 times that of 1978.

As in many other countries, such as the United States and India, a major cause for China’s farmland deterioration has been its land-intensive industrialization and urbanization over the past three decades. Farmland has been expropriated to meet the strong demand for land to support the expansion of manufacturing, infrastructure, and urban development. Competing interests for land use have resulted in arable land being expropriated for more lucrative development projects. In the contest for land use among food growers, cash-crop planters, and property developers, profit maximization often trumps the needs of food farmers, especially when imported foods are much cheaper than locally grown options.

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Over the past two years, Chinese private property developers such as Evergrande and Vanke have pulled back from aggressive land purchasing due to stringent restrictions. [See here.] While this reduced demand from private property developers should have helped alleviate the temptation to appropriate farmland for property development, much of the demand void has been filled by state-owned enterprises and government-backed developers or companies, such as local government financing vehicles (LGFVs)… Boosting land sales through government-owned or government-controlled entities when demand from private developers is low provides a politically convenient channel for local governments to raise revenue at limited costs.

Investing limited fiscal resources in farmland protection, in contrast, does not generate immediate political and financial returns, making it a tough sell for local officials who are under pressure to deliver a rapid economic recovery. While safeguarding farmland is an important cause in the long term, and one backed from the top in Beijing in theory, it costs money from the pockets of local governments and subsidies from the central authorities. For local officials, the more pressing challenge consuming their attention and resources is to restore economic growth…

Limited domestic farmland availability combined with the pursuit of food security dictates that China would expand its overseas farmland investment and advance its strategy of farming out. The 2007 No. 1 document set farming and agriculture “going out” into the rest of the world as a national strategy for the first time, but the focus back then was exports. The 2016 No.1 document updated guidelines on international agriculture cooperation, focusing on agricultural investment and supporting Chinese companies’ overseas operations.

According to Land Matrix, a European land-monitoring organization, Chinese companies have gained control of 6.48 million hectares (16 million acres) in foreign territories, which is nearly the size of Ireland. This number dwarfs the combined 1.56 million hectares controlled by British companies, the 860,000 hectares held by U.S. companies, and the 420,000 hectares owned by Japanese companies. Chinese investment in U.S. farmland has already triggered concerns in Washington, even though China currently only holds less than 1 percent of foreign-owned U.S. farmland. Republican lawmakers have already drafted a bill to ban Chinese purchases of American farmland, while in states like Texas measures are even more advanced. China not only owns farmland in the United States but also in U.S. allies’ territory, such as the United Kingdom, France, and Australia.

If China’s economic recovery and its continued growth are fueled by land sales and its property market, Xi’s prioritization of food security means Chinese entities will have to embark on more aggressive overseas land purchases. While the current theater of U.S.-China competition has been centered on the chips and semiconductors industry, a new front may emerge in the form of competition over farmland and agriculture technology. The party can survive setbacks in the chip war, but the stakes are much higher in the fight for food security. Failure on the food security front will threaten the survival of the regime…

The need to feed: “China’s Farmland Is in Serious Trouble,” from @ZongyuanZoeLiu in @ForeignPolicy.

* Anthony Bourdain

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As we contemplate comestibles, we might send tasty birthday greetings to Momofuku Ando; he was born on this date in 1910. A very successful businessman, he founded  Nissin Food Products Co., Ltd., for which he invented instant noodles (ramen noodles) and created the Top Ramen and Cup Noodles brands.

Visit the Cup Noodles Museum.

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