Challenges for Chinese Agriculture

Dr. Ken Rietz

January 11, 2023

China seems to attract problems of all sorts, social or economic. Agriculture is not an area that has been as visible from afar, however the leadership of China takes it very seriously, and for good reason: China has 17.5% of the world’s population, but less than 7% of its arable land, and much of that land is substandard. A top priority for China is “absolute security in staple foods and basic self-sufficiency in grains”, as a recent law states it. In this commentary, we will go over some specific challenges, and the prospects of resolving them. First, here is the graph of the exports of corn, the grain most exported from the US to China.

Figure 1: Million metric tonnes of corn exported from the US to China, by trade year

By China’s own records, there is no problem. The China Times, a reliable source of official data from the Chinese government, has reported that in 2023, China produced 695 million metric tonnes of grain, exceeding the goal of 650 million metric tonnes for the ninth consecutive year. This is impressive, but as more people move to the coastal regions and start earning more money, their dietary habits change, and they want more food, and of a higher quality. But that is only the beginning of the challenges.

The amount of arable land in China is roughly the size of Montana. Xi Jinping has decreed that all agricultural land be maintained as such. This puts local governments in a bind. They are loaded with debt, and their main source of income is selling land to developers, who would remove all possibility of using it for farming. Quality farmland is also shrinking due to degradation from overuse, acidification, and/or salinization. Plus, inclement weather has ruined some crops even this year. Henan province, called the “granary of China” for producing 28% of Chinese wheat, endured five consecutive days of heavy rain right at the beginning of the harvest, when wheat is very susceptible to water damage. This was devastating to the farmers.

What can be done? Of course, China could import food from abroad, but China does not want to be dependent on food grown by other countries. Note that the graph above shows that China is importing an increasing amount of corn, at least until they no longer need to import it. One strategy China has adopted is buying farmland from other countries, such as Britain, France, Australia, and the US. (The location of some of these farms in the US has raised suspicion that the purpose is not farming and could cause enough backlash that all US land owned by China will have to be sold back to the US.) There is no question that China will need to use that land for farming, at least, but not that farming is the only use of that land.

Until the agriculture puzzle is solved, you can expect China to continue to import increasing quantities of food, with attendant price increases, counterbalanced with increasing efficiency in global food production. On top of that, the weather will guarantee that price swings will continue.