A press release from the University of Leeds last week announced a new study projecting that if current trends continue, China’s industrial growth and changing land use - combined with climate change - could threaten global food supplies.
"At the moment the Chinese government claims that China is 95% self sufficient in terms of grain supply," read the press release. "If China were to start importing just 5% of its grain (to make up a shortfall produced by low yields or change of land use to more profitable crops) the demand would hoover up the entire world's grain export. . .The pressure on grain availability for international grain markets could, in turn, have a huge knock-on effect. Poorer countries are particularly vulnerable, as demonstrated by the 2007-2008 food crisis.”
So why might China start importing more grain? The study points to decreasing harvests, increasing vulnerability to drought, low grain prices and the loss of high-quality farmland to urbanization. In fact, this is a message we’ve heard before. In 1995, Lester Brown published Who Will Feed China?, an entire book dedicated to the very topic of China’s demand for grain starving the rest of us. Here’s a good summary by the Worldwatch Institute.
Brown focused on the country’s growing population, loss of productive land to development, diminishing water supplies, rising demand for feedgrains as China’s diet became more meat-oriented, and the fact that---according to his calculations---China’s farmland productivity had peaked. He claimed that China would inevitably increase imports of grain, and that “China's rising food prices will become the world's rising food prices.”
Remembering the rather panicked response when Brown’s prediction was made (I was in China at the time, and some observers credited his book with an increase in government investment in agriculture the following year) and seeing the same basic hypothesis again being put forward ---15 years later---as a possible future scenario, the interesting question, it seems to me, is: “Why haven’t the Chinese starved us yet?”
Back in the 1990s, researchers from the scientific community did not take long to pounce on Brown’s methodology and assumptions, focusing on his serious underestimation of China’s arable land area. Not long after Who Will Feed China came out, remote sensing surveys revealed that China’s cultivated land area was 30-40 percent larger than Brown’s estimate. This underestimation led him to conclude incorrectly that there was little possibility for increasing productivity, (calculated as yield X area) and to over-estimate the relative severity of land losses from urbanization.
But from the perspective of agriculture and trade policy, there was another assumption in Who Will Feed China? that was just as dubious: the idea that China would fully integrate itself into the global food trade system, and buy large quantities of grain on world markets. The mainstream economics of the 1980s and 1990s told us that food was like any other tradable commodity, and therefore countries that had a comparative advantage in something other than food production should simply import food rather than growing it themselves. According to this logic, it is irrational and disruptive of the smooth operation of markets for governments to try to achieve food security through tariffs, subsidies or other policy measures. It was precisely in the name of eliminating “market distortions” that governments of developing countries were urged or forced by multilateral finance institutions and Western donors in the 1980s and 1990s to abandon subsidies for domestic food producers, open their markets to imports (even when those imports were being sold at below market prices), and sell off state-controlled grain reserves.
So, for example, among the 50 poorest countries on earth, between 1990 and 2005 net imports of rice increased by 124 percent, and those of wheat by 130 percent. (Over two-thirds of developing countries are now net food importers.) These countries, the ones who listened to the World Bank and IMF, are precisely the places where the food crisis has had the most devastating impacts. By contrast, China has experienced relatively small price increases, and no real food shortages. One important reason for this is the fact that China did not integrate itself into the global food system in the ways that many assumed they would. China’s history of famine---and famine-induced political turmoil---made a deep impression on the long memories of the country’s leaders. Despite having what is generally considered one of the more “open” economies on the planet in the manufacturing sector, China has maintained strong food security policies. These are not the loony, commune-level demands for self-sufficiency in grain that Mao decreed, but a sensible package of policy carrots and sticks: limits on the percentage of annual grain demand that can be imported, government grain storage, public support for ag research, subsidies for key farming inputs, preferential pricing for staple grains, and restrictions on the cultivation of biofuel feedstocks on arable land.
So although some of Lester Brown’s predictions did come true---China’s economy did grow rapidly, as people got wealthier their diets did change to include much more meat, more and more arable land continues to be swallowed up by urbanization----the massive imports of basic grains have not materialized, and China’s food security policies seem thusfar to have largely insulated it from the volatility of global grain markets. (Dr. Darryll Ray of the Agriculture Policy Analysis Center has written an interesting series of columns on this.)
But just because disaster hasn’t struck yet doesn’t mean it never will. The fact that Lester Brown had a few assumptions wrong doesn't change the validity of the basic argument that we live in a finite world and that the US is exporting a development model that is disastrously unsustainable. The vulnerabilities pointed out in the University of Leeds study are real as well, and their focus on climate change as a source of growing instability adds urgency to their findings. Meanwhile, there are economists in China who want to abandon the notion of domestic food security altogether, and the country's leadership seems confused on this issue. China’s demand for soya has skyrocketed in the past year, and there are large imports of many other non-staple products. The government seems to have burned through most of its grain stores. The gap between the incomes of farmers and city dwellers continues to grow, and the government’s chief response in 2008 was to promote land consolidation and pledge further support for unsustainable chemical and bioengineered agriculture. The government has assumed that the labor-intensive export manufacturing sector would absorb people fleeing the difficult lot of the farmer. But the global economic slowdown means tens of millions of laid off workers who returned to their rural hometowns for Chinese New Year this week have little to celebrate.