The key theme of China’s Central Conference on Rural Work last year was the issue of food security and expanding the production of soybeans and oilseeds. In addition, data from the U.S. Department of Agriculture shows that China is continuing to import large quantities of grains.
On December 25 and 26, 2021, the conference held in Beijing proposed that to ensure that the grain output in 2022 will remain stable at more than 1.3 trillion kilograms. The meeting emphasized that to ensure food security, in addition to stabilizing the production area and output, it is also necessary to expand the production of soybeans and oilseeds. At the National Agriculture and Rural Affairs Directorate's Meeting held on December 27, it was once again proposed that the stabilization of grain production and expansion of soybean oil production were major political tasks for 2022. The media’s data show that China's soybean planting area dropped to 6,861,000 hectares in 2021, down 26.62% from the previous year, and the output also reduced to the lowest level in the past five years.
As early as 2019, the Ministry of Agriculture and Rural Affairs announced that it would restart the soybean revitalization plan, though this ended up in failure. The National Bureau of Statistics said in early December last year that China's grain production has had a bumper harvest for 18 consecutive years. In 2021, the total output was 1,365.7 billion jin (682.85 billion kilograms), an increase of 2% over the previous year and a record high. However, at the same time, according to data from the General Administration of Customs of China, the total grain import volume from January to October that year was 137.956 million tons, an increase of nearly 23% year-on-year, more than 11 times the increase in total grain output.
Contrary to the understanding of the majority of policy departments, I believe that agricultural production is a very long chain and cannot be restored in a short period of time. The demand for agricultural products in China is huge. Pig farming, for example, needs to use a lot of soybeans, and most of the edible oil is made from soybeans. Therefore, the problem of agricultural products is related to the survival and living standard of the people.
Even if intensive measures are taken by the Chinese authorities now to increase food supply on a large scale, it will take several years to achieve the aim. The problem is that in today's China, due to the land economy, the supply of land has been generally restricted. There is not as much land for agricultural purposes as in the past. The repurposing of residential areas and unutilized industrial parks for agricultural use too will take time to yield results, and it is something that cannot be done in a short time.
There are only two ways to solve the problem: First, greatly increase the purchase of food globally. According to statistics from the U.S. Department of Agriculture, China's stockpiles of staple grains such as corn have reached more than half of the world's. The Department of Agriculture estimated that by the first half of 2022, China’s grain stocks would account for 69% of global stocks, 69% of corn, 60% of rice, and 51% of wheat. In doing so, the main purpose is not so much to solve the food problem but to prevent changes in the international situation and create pressure on China, including countries uniting to boycott or unite to blockade it. Heavy purchases of soybeans, corn, and wheat from the U.S., Brazil, and other suppliers have seen imports soar two to 12-fold over the past five years, according to data from the General Administration of Customs. The import volume of beef, pork, dairy products, and fruit has also increased by 2 to 5 times at the same time.
Second, lowering the standard of living and reducing the demand, thereby making the supply relatively balanced. The "anti-waste" agenda may be the main measure in this regard. In addition, households may be actively encouraged to stock up on food, and intensive campaigns to reduce food loss and waste may be promoted. Regulation of the development of the catering industry, including limited supply, etc., is also the main direction of anti-waste and compressed supply. In terms of the chain problems of agricultural products, grains, fruits, oilseeds, meat, and pharmaceutical production, China is actually facing an unsolved situation for a period of time in the future. Therefore, compressing supply is the main direction that can implement policy operations.
However, in general, due to the scattered farmland and soil pollution in China, the production efficiency is poor. Coupled with the flocking of migrant workers to cities, the shortage of land resources, and the continued stagnation of food production and supply, this is not a problem that can be solved within a short period of time. Furthermore, because of the accumulation of various problems, which are difficult to solve at the same time, China will inevitably introduce various unconventional means to counter the issues.
