China faces a rice bowl dilemma after virus

Empty supermarket shelves in the early stages of the coronavirus pandemic have put grow-your-own back on the world’s agenda, and nowhere more so than in China, where ensuring food supplies for its huge population has been a political priority for decades. Simply diversifying imports may not satisfy hawkish voices. Emphasizing domestic production, though, will extract a heavy toll for a country with a fifth of the globe’s people, but roughly a 10th of arable land and less than 6% of water resources.
For a nation scarred by famine, it’s hard to overstate the importance of food security. That was true long before 1994, when US environmental pioneer Lester Brown drew international attention to the potential consequences of scarcities by asking who would feed China when it boomed. Officials fear inflation as a potential cause of social and political instability — not without reason, given that rising prices helped provoke the Tiananmen Square protests. Agricultural imports, of course, have a tendency to become tangled in diplomatic spats.
The answer was historically a simple one: self-sufficiency, particularly in grains like wheat, rice and corn. The idea has been hard to shake, even if the exact meaning of the phrase has softened over the years. Then came the 2020 pandemic, pressing everyone to fret about messy distribution chains. Officials freshened up plans and, projecting an image of self-reliance, Premier Li Keqiang told China’s parliament last month that it was imperative to ensure food supply, while rewarding grain-producing counties and boosting the minimum purchase price for rice.
That doesn’t mean the country can simply set the clock back to 1996, when China outlined a strict grain self-sufficiency policy — or that it plans to. In part, what China is doing now is a regular rebalancing of the official position, says Thomas David DuBois at Beijing Normal University. A back-to-the-future move would be nigh-impossible. China has become a member of the World Trade Organization. Households eat larger portions and tuck into more protein, increasing demand for grain to feed livestock. Imports of produce have climbed. While China has rice and wheat, it relies on overseas markets like the US, Brazil and Argentina for soybeans. It has also sought to increase meat imports. Agricultural purchases have been key to a trade truce with Washington.
Certainly, the cost of past domestic ambitions has already been extortionate. In environmental terms, the damage has meant fertilisers used at four times the global rate, degraded soil and scarce water. Then there’s the financial blow: According to the World Bank, input subsidies rose sevenfold between 2006 and 2010. By that final year, government support for producers amounted to 17% of gross farm receipts. This rising bill, along with other changes, including growing international clout, accounts for Beijing’s more balanced approach after late 2013, when policy began to lean towards imports, sustainability, investing abroad and modernising at home.

—Bloomberg