No grain self-sufficiency in China without changes to land policies

If China is to achieve its target of 95% grain self-sufficiency by 2030 it will need to restrict the conversion of arable land to other uses say researchers from McGill. This may prove challenging in a country with a population of almost 1.4 billion, but with just under 13% of arable land, close to half of which is suffering from soil degradation. After analyzing the potential impacts of various current trade-related food policies, the researchers have arrived at the conclusion that the current Red Line arable land protection policy is insufficient to reach the government’s desired goal. They predict that China will achieve only 90% self-sufficiency in wheat and rice by 2030 if business continues as usual. Moreover, they add that if the population continues to grow at its current rate, by 2050 grain self-sufficiency will have dropped to 83%, with the poor being most affected as food prices rise.

In a controversial finding, the researchers instead suggest that if the government hopes to attain grain self-sufficiency it needs to set out to both preserve and increase the areas given over to grain production.

How they reached this conclusion

The researchers used a global computable general equilibrium model to calculate the potential future effects on grain production of five different policy scenarios relating to food production and trade:

1. a reduction in meat tariffs to discourage domestic production of meat and replace it with production of feed and food grains: The researchers calculate that this is likely to have a significant and very positive impact on outputs of rice and wheat and could contribute towards grain self-sufficiency above 90% in 2050.
2. a reduction in grain tariffs to eliminate protection for China’s grain producers: The researchers calculate that this will have a mixed impact on China given that although it increases the chances of grain self-sufficiency, it has a marginal negative effect on social welfare.
3. the imposition of higher tariffs on grain imports to encourage high grain self-sufficiency: The researchers calculate that this will increase grain self-sufficiency over time although, for poor households, it may raise prices and reduce private consumption.
4. the free-trade agreement with Australia about meat-trade: The researchers calculate that this is a win-win situation since it will ease rising prices and spur consumption.
5. the Chinese-Korean free-trade negotiations to remove all tariffs on meat from China that is  imported to Korea: The researchers calculate that this will have a positive impact on meat export but negligible impact on food grains, not so favourable overall.

To read the full paper: “Food security in China at 2050: a global CGE exercise” by Kakali Mukhopadhyay et al in Journal of Economic Structures