How China managed to avoid the global food crisis

Small farmers have become the backbone of the country, producing about 80% of domestic food

The article below originally appeared on the World Economic Forum website on November 7. Read the original article here.

A perfect storm of climate shocks, pandemic trauma, economic instability, and the Ukraine conflict has made the global food crisis a stark reality.

As many as 828 million people, or 10% of the world’s population, suffered from hunger in 2021, and nearly 30% faced moderate or severe food insecurity. In March 2022, the Food Price Index peaked. Despite declines, the price has remained high above last year’s value.

With its vast population, China has managed to maintain relatively stable domestic food prices and supplies. The domestic food price saw a moderate year-on-year increase of 0.4% in the first half of 2022, compared to the global growth of 25.2%.

The country’s domestic grain production reached 483 kilograms per capita in 2021, which also maintained relatively high compared to the international food security standard of 400 kilograms per capita.

The public and private sectors have made great efforts to maintain this stability. The Chinese government has introduced policies in several areas, from production and transportation to support food security and strengthen agri-food system resilience.

Agricultural products

Since 2006, the government has set a “farmland red lining” policy to keep no less than 120 million hectares of arable land for crop farming.

The policy also outlines the development of 66.7 million hectares of high-quality farmland, with a particular eye on protecting the fertile black soil in northeast China.

Furthermore, relevant ministries collaborated to open a “green channel” for fresh agricultural products to increase transportation efficiency. Other policies have been developed to combat waste along the whole food chain, which accounts for 27% of the country’s annual production.

Supporting smallholder farmers – those operating less than two to three hectares of land – is one of the crucial policy focuses of China. As the backbone of its food security, the 250 million smallholders produced about 80% of food in the country.

Yet they are among the most vulnerable groups, bearing the brunt of the crisis due to their modest income and limited access to technology and financial support.

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These policies can only be effective when private sector players, especially agricultural businesses, are also supporting the process.

Multiple leading Chinese companies recognize that smallholders are closely related to their business and an integral part of the supply chain. Subsequently, they are enabling these smallholders with knowledge, financial support, technology, and direct access to the market.

One example is how Syngenta Group China encourages smallholders to adopt sustainable agricultural practices through capacity-building activities, ensuring that the product is stable, resilient, and of high quality.

Since 2017, Syngenta has established a Modern Agriculture Platform (MAP) to build farmers’ capacity in digital and financial literacy, integrated pest management, conservation tillage, and fertilizer utilization. In turn, this has helped MAP farmers produce high-quality products.

They also generate US$240 more per hectare than non-MAP farmers.

E-commerce platforms

Another emerging trend in China is the role of the country’s booming e-commerce platforms in empowering agricultural products directly “from land to table”.

Using technology, the top e-commerce firm, Alibaba, has bridged farmers of all sizes to 903 million active users. This has helped them and agricultural suppliers with their pandemic recoveries. By aiding smallholders, the company has enhanced its corporate image.

Moreover, companies like Mengniu Dairy provide interest-free loans to smallholders to speed their recovery from the pandemic and stabilize production.

As the leading dairy giant in China, Mengniu is also empowering the whole supply chain and industry through technological innovation. The company developed a digital management system to improve efficiency and transparency along the supply chain.

New technologies, including biotechnology and blockchains, were applied to cut carbon emissions, improve resource utilization efficiency, and increase productivity, simultaneously gaining environmental and economic benefits.

Global soybean production in 2020

Yet despite its robust domestic supply, China must pay attention to the increasing price pressures. The country still relies heavily on food imports, especially soybeans, beef and oilseeds. More than 80% of the soybeans consumed in China were imported.

Beef imports have also been increasing rapidly over the past decade and reached a record-high annual import of 2,330,000 tons in 2021.

With its high dependency on global food imports, China should not only maintain and increase domestic supply but also cooperate more closely with other countries to stabilize the international supply chain amid climate and geopolitical uncertainty.

Beijing has implemented several measures to secure food imports. It has increased its infrastructure and agricultural investments and strengthened its presence in the global market.

Essential cog

The Chinese government has also been working with international organizations to enhance agricultural production in other countries, especially in Africa and South Asia.

Cooperation is an essential cog in the battle against the food crisis. A question that China and its stakeholders need to address in the long term is: How do we collaborate efficiently with domestic and international stakeholders to find a systematic approach to food security?

Yuan Zhang is a China Specialist in the Tropical Forest Alliance for the  World Economic Forum in Beijing. Tengfei Xu is the Programming Lead for the World Economic Forum in Beijing. Jingxin Xiao is involved in Early Careers in Nature-Based Solutions for the World Economic Forum.

This article was republished from the World Economic Forum website in accordance with the Creative Commons 4.0 International Public License. Read the original article here.

The views expressed in this article are those of the author alone and not the World Economic Forum.

The views expressed in this article are those of the author alone and do not necessarily reflect the official policy of China Factor.