The Chinese Hunger Games: Food imports increase by 94%

By Chaitanya Gupta

In 1996, China was able to feed close to 22% of the world’s population despite accounting for only 7% of the total cultivated land. However, since the turn of the century, matters of food security have deteriorated for the world’s most populated economy.

Phenomenal rise in food imports

Today, China is the largest food importer in the world. In the period from January to April 2017, it imported 1.68 million tonnes of wheat and related products, an increase of 94% over the imports in the same period last year. In 2014, it imported $122 billion worth of agricultural and food products. A 2015 report by the US Department of Agriculture tagged China as the number one destination for US agricultural produce. The country today ranks 42 out of 113 in the Global Food Security Index.

Even though China is the world leader in grain production and has seen production increasing at a rate of 1.5-2.5% for twelve consecutive years (2003 to 2015), it has failed to close the demand-supply gap. Compared to this, grain imports have risen at an average rate of 32.2% in the period 2011 to 2016. Additionally, the country’s food imports as a percentage of total merchandise exports have fallen from 3.52% in 2002 to 6.7% in 2015.  This scenario of dependency exists despite the repeatedly stated goal of self-sufficiency.

Reasons behind the food crisis

China’s food crisis in the past decade has been fuelled by poor anticipation of rising consumer demand and a tectonic shift in consumer preferences. According to the World Bank, the average daily calorific intake for China has risen from 2,163 per person in 1980 to 3,036 per person in 2009.

This increase in demand has not been met by any systematic improvement in cultivation or agricultural produce. In fact, as a consequence of rapid industrialisation, the amount of arable land in China has shrunk by 14 million hectares (11%) since 1996. A 2014 state study reveals that almost one-fifth of China’s farmland is currently polluted and unusable for agricultural purposes. Availability of water for irrigation is another key resource that China currently lacks. Half of the country’s water resources are unusable for agricultural purposes due to heavy pollution.

Part of the blame for the escalation of this crisis can also be laid on economic prosperity and cultural integration. Double-digit growth for a large part of the previous decade deepened the pockets of Chinese consumers. Since 1996, China’s per capita income has increased by more than 1200 times, leading to reduced malnourishment and increased global exposure. 

Additionally, when China joined the World Trade Organisation in 2001, it agreed to lower tariffs which were institutionalised to protect local farmers from competitively priced imports. Thereafter, prices were market driven, leading to increased engagement with global agricultural and food producers. As a result of these two factors, people rapidly adopted Western food habits. Increasing dependence on a US-style meat and protein-rich diet drove up imports of items such as pork and chicken. Even domestic dairy farming efforts added to this crisis, by importing the grain serving as feed for the farm animals.

The bid for self-sufficiency

In 1996, China released a report committing to 95% grain self-sufficiency. Since then, the country has re-affirmed this commitment on numerous occasions. Most recently, in 2014, the central government introduced a realistic model of domestic supply with moderation of imports.

The government has taken some steps in this regard. Wheat, rice and corn are still under price support in order to keep domestic production alive. Additionally, corn stockpiles are being reduced by diverting it for other uses. Today, almost 70% of China’s corn is being used to feed livestock. The government has also made numerous land acquisitions overseas for meeting dairy and pulse needs. Further, they are moving towards sustainability by imposing penalties on fertilisers and ecologically taxing crops.

China’s risky dependence on imports

China is still the world’s largest soybean importer and buys genetically modified soy from the US, Brazil and Argentina. The pulse accounted for almost 56% of total US exports to China in 2016. Even self-sufficiency in rice, a staple food in the country, is declining. China currently imports about 5 million tonnes (dollar value of $1.6 bn) each year. In July, China inked a deal to allow rice imports from the US for the first time in history.

Even though foreign exchange reserves of $3.092 trillion allow such dependency, it is of strategic importance to become self-sufficient. High dependency on any import is risky as it creates vulnerabilities that can be exploited by exporters. The necessity of food magnifies this inherent vulnerability attached to imports.

With an estimated population of 1.4 bn and a GDP of $22 trillion by 2030, China’s food problems show little hope of slowing down. The government’s meek response hardly offers any respite. The government now needs to focus on protecting farmlands and water resources while simultaneously nurturing local produce. This requires a strong commitment towards sustainable measures such as rural land reforms, application of technology and higher standards in farming and reduction of food waste by optimising the supply chain.

Featured Image Source: VisualHunt