Farming the World: China’s Epic Race to Avoid a Food Crisis
By Bloomberg News
May 22, 2017
China’s 1.4 billion people are building up an appetite that is changing the way the world grows and sells food. The Chinese diet is becoming more like that of the average American, forcing companies to scour the planet for everything from bacon to bananas.
But China’s efforts to buy or lease agricultural land in developing nations show that building farms and ranches abroad won’t be enough. Ballooning populations in Asia, Africa and South America will add another 2 billion people within a generation and they too will need more food.
That leaves China with a stark ultimatum: If it is to have enough affordable food for its population in the second half of this century, it will need to make sure the world grows food for 9 billion people.
Its answer is technology.
China’s agriculture industry, from the tiny rice plots tended by 70-year-old grandfathers to the giant companies that are beginning to challenge global players like Nestle SA and Danone SA, is undergoing a revolution that may be every bit as influential as the industrial transformation that rewrote global trade.
The change started four decades ago when the country began to recast its systems of production and private enterprise. Those reforms precipitated an economic boom, driven by factories, investment and exports, but the changes down on the farm were just as dramatic.
Land reforms lifted production of grains like rice and wheat, and millions joined a newly wealthy middle class that ate more vegetables and pork and wanted rare luxuries like beef and milk.
When Du Chunmei was a little girl, pork was a precious gift only for the elders of her village in Sichuan during the Lunar New Year holiday. The family pig would be slaughtered, and relatives and neighbors would pack their house for a feast.
“Meat used to be such a rarity,” said Du, now 47 and an employee of state oil company PetroChina Co. whose family celebrated the holiday this year at a restaurant. “Now it’s so common we try to cut back to stay healthy.”
But the breakneck pace of the country’s development brought some nasty side effects. Tracts of prime land were swallowed by factories. Fields were polluted by waste, or by farmers soaking the soil in chemicals. The country became a byword for tainted food, from mercury-laced rice to melamine-infused milk powder.
So how can China produce enough safe food for its growing population if they all start eating like Americans?
The simple answer is it can’t.
It takes about 1 acre (half a hectare) to feed the average U.S. consumer. China only has about 0.2 acres of arable land per citizen, including fields degraded by pollution.
So China’s Communist government has increasingly shifted its focus to reforming agriculture, and its approach divides into four parts: market controls; improving farm efficiency; curbing land loss; and imports.
A bucolic scene of goatherders returning with their flock in the evening is just one part of Penglai Hesheng Agricultural Technology Development Co.’s 70,000 hectare showcase farm that is rearing local breeds of livestock and experimenting with the cultivation of dozens of types of crops.
In each case, technology is the key to balancing the food equation. The nation is spending billions on water systems, seeds, robots and data science to roll back some of the ravages of industry and develop sustainable, high-yield farms.
It needs to succeed quickly, because China’s chief tool during the past decade for boosting domestic production is backfiring.
China has a goal of being self-sufficient in staple foods like rice, corn and wheat. To ensure farmers grew those crops, it paid a minimum price for the grains and then stored the excess in government silos.
Farmers responded, saturating their small plots with fertilizers and pesticides to reap bumper crops that filled government reserves to bursting.
Total state grain reserves were estimated to be to be more than 600 million tons last year, enough for more than a year’s supply. About half the stockpile is corn, which the government is trying to sell before it rots, forcing provinces to turn the grain into motor fuel.
“We have exhausted our resources and environment and used as much fertilizer and pesticide as possible to address supply shortages,” Han Jun, deputy director of the Office of the Central Rural Work Leading Group, wrote in the government-backed People’s Daily on Feb. 6. “We urgently need to increase production of green and good-quality agriculture products.”
But first it needs to preserve what little farmland it has.
China only has about 0.2 acres of arable land per citizen, including fields degraded by pollution. Areas like this one on the outskirts of Shanghai are becoming typical with small farmed plots being gobbled up by encroaching construction.
China lost 6.2 percent of its farmland between 1997 and 2008, according to a report by the United Nations’ Food and Agriculture Organization and the OECD. And local governments continue to swallow fields for more-profitable real-estate developments. The Chinese Ministry of Agriculture did not respond to requests for comment on this story.
Officially, the rate of land conversion has slowed since 2007, when China announced a goal of “maintaining 1.8 billion mu of farmland” (120 million hectares). But local governments that have relied for years on land sales to fund growth can circumvent restrictions by counting marginal land as arable, or re-zoning urban areas as farms.
More alarming for the nation’s planners are reports that almost 20 percent of China’s remaining arable land is contaminated.
China is shifting from building grain stockpiles to focusing on quality, efficiency and sustainable development, said Tang Renjian, a former official at the Central Rural Work Leading Group, the country’s top rural decision-making body.
Government studies in 2014 found that some vegetable plots were dosed with high levels of heavy metals such as cadmium, just one of a series of poison scares that has made the public wary of domestically produced food.
Over the years, local TV stations and social media fanned the fears, reporting a sickening array of scandals, from soy sauce produced with human hair to tofu made with sewage, and cat and rat meat passed off as rabbit and lamb.
“Chinese people are much more aware of food-safety problems today than a decade ago,” said Sam Geall, a research fellow at the U.K.’s University of Sussex who focuses on China’s environment and agriculture. “They pay more attention to where their food is coming from, and they are often willing to pay more for safety.”
Chinese-owned businesses are taking notice, seeking out overseas investments that they can turn into premium brands on supermarket shelves at home.
Ningbo chemical baron Lu Xianfeng’s Moon Lake Investments Pty bought Australia’s biggest dairy operation last year, while Wan Long’s WH Group Ltd. became the world’s largest pork producer with the purchase of Virginia-based Smithfield Foods Inc.
WH Group’s 2013 purchase of Virginia-based Smithfield was part of a $52 billion overseas spending spree by Chinese food companies since 2005 as China’s population became wary of home-produced food. This WH Group factory in Zhengzhou, China, makes American-style pork products from imported Smithfield meat.
“The Chinese consumer has grown very cynical about the safety of food from their own country,” said Sean Shwe, managing director of Moon Lake, which flies fresh milk from Tasmania to China. “The food trade into China has become very lucrative.”
A change in diet is accelerating the search for overseas supplies. Beef sales to China have risen 19,000 percent in the past decade. Imports of soybeans, used in animal feed, have grown so fast that the government quietly dropped the grain from its self-sufficiency list in 2014.
“China needs to import as it is unable to produce everything from its limited farmland,” said Li Xiande, a researcher with the Institute of Agricultural Economics and Development, Chinese Academy of Agricultural Sciences, who said the country bought 106 million tons of cereals and soybeans abroad in 2016. “The country aims at self-sufficiency in staple grains and all other imports would be based on market demand.”
But China will face increasing competition from a population explosion across dozens of countries in the Southern Hemisphere.
By 2050, 14 of the world’s 20 biggest metropolises will be in Asia and Africa, with Jakarta, Manila, Karachi, Kinshasa and Lagos joining Tokyo, Shanghai and Mumbai, according to a projection by Demographia.
By then, the planet could have as many as 9.7 billion mouths to feed, according to a United Nations report. Factor in changing diets and we will need to raise global food output by 70 percent from 2009 levels, according to an FAO estimate.
The world got a taste of what might be to come a decade ago, when smaller harvests and a rapid adoption of biofuels led to a global food shock, with riots over price increases in some developing nations.
Constrained by a shortage of land and the effects of pollution, Chinese farms are adopting methods of indoor cultivation that can produce a lot of food safely in a limited space. In this Hesheng greenhouse, workers develop techniques to grow organic tomatoes.
That was one impetus behind China’s so-called land grab, where it bought or leased land in countries like Mozambique to secure grain supplies. Yet many of the projects backed by the Chinese government are aimed more at increasing production in poor countries and building China’s global influence than supplying its supermarkets.
The real effort to create another green revolution is happening back home, where entrepreneurs are embracing technology to transform the nation’s rural landscape.
China’s new breed of farmer isn’t staring at the sky to predict rain, he’s using a micro-irrigation system based on an array of soil sensors that feed data wirelessly to his smartphone. He’s growing vegetables in climate-controlled shipping containers and using drones to apply computer-formulated doses of pesticides.
Such farms are still a tiny minority, partly because of the difficulty in acquiring enough land to run an efficient operation. Beijing’s policy since 2014 has been to promote “appropriate sized” family farms of about 13 hectares or less depending on location.
But most Chinese farms are much smaller. China’s 260 million rural households work 120 million hectares of farmland—making the size of the average plot per rural family less than half a hectare, according to Zhong Funing, head of the International Research Centre for Food and Agricultural Economics at Nanjing Agricultural University.
New laws in November have eased the ability of companies to acquire larger tracts of land, but the government remains wary of change that would unsettle its vast rural population.
Even with a modest average farm size of 13 hectares, the country would need fewer than 10 million families working the land.
“How can the rest of farmers find jobs in cities if they abandon the land?” Zhong said. As a result, the development of large, high-tech farms may be slow, he said.
In the meantime, China’s best option may be the same as for many developed nations—improve people’s diet.
“The demand among the middle class in China to move up the food chain is a matter of status and wealth,” said Jeremy Rifkin, author of “Beyond Beef: The Rise and Fall of the Cattle Culture.” “It’s not sustainable.”
In China, the National Health and Family Planning Commission began a campaign in 2015 to encourage citizens to cut back on meat and unhealthy foods and eat more vegetables and fruit to counter rising levels of obesity and diabetes.
The cycle has brought Du in Chengdu full circle.
Du Chunmei tends her organic farm on the roof of her husband’s factory in Chengdu after becoming disillusioned with the quality of supermarket food. “Being able to plant your own food is a luxury. You need to find space.”
Now her family again buys a pig each year, but not for the New Year feast. She does it to be sure of what the animal ate, insisting the farmer feeds it only corn and vegetables for eight months before slaughter.
With the help of her 75-year-old mother, Du grows peppers, cabbage, eggplants and pumpkins on the roof of her husband’s factory. Some two dozen chickens and ducks share the space, pecking on organic feed.
“There’s so much pesticides, pollutants and fertilizer in the food sold in supermarkets,” Du said. “Being able to grow your own food is a luxury.”