When you're the most populous country on earth, with five times more people than the United States, feeding, caring and providing sound economic policies for those people is no simple matter. China's red hot growth — at least until last year — has people wondering how the global recession will impact this mysterious country, particularly agriculture.
I've been traveling with farmers on the Illinois Farm Bureau Market Study Tour, hitting key stops at the U.S. Embassy and listening to experts from the ChineseAgriculturalUniversity here in Beijing.
China put agriculture on the front burner ever since the run up in grain prices last year resulting in food inflation and unrest among the masses. The country's number one priority is to increase food security and secure employment in its rural areas. When fertilizer prices jumped to historic highs last year, the government stepped in by giving farmers not two or three, but four kinds of subsidies to pay higher input costs.
In 1980 ag GDP made up 30% of china's total GDP; today ag makes up only 11.3% of total GDP, yet, it employs 730 to 880 million people. Upwards of 150 million transients go back and forth from city jobs to rural jobs, and the poor economy has caused some of those higher paying city jobs to dry up.
So while the government has stated it wants to modernize its agriculture, there is no rush to mechanize and consolidate says Dr. Laping Wu (at left), Professor, College of economics and management at ChinaAgriculturalUniversity. Doing so would put more people on the street.
Thus is China's dilemma — developing a modern farming system without causing more unemployment and putting people on the streets to potentially rise up against the government.
China has over 220 million actual farms with the average size at 1.5 acres per farm. Usually when a farmer picks up and leaves to work in the city, a family member takes on the farm duties.
Chinese farmers mostly grow rice, corn, wheat, soybeans and cotton, as well as tons of specialty crops and vegetables. Pork is by far the most popular livestock to grow followed by beef.
China's appetite for grain is insatiable. The country needs about 485 million tons of grain per year, every year, says Wu. Why? In part, production has stagnated due to "resource constraints.bCrLf That is government talk for urban encroachment, severe water pollution, a shortage of irrigation water and little investment in seed technology.
"Without soy, cereal and cotton imports, China would need another 13% of its current cropping area,bCrLf Wu says.
Tomorrow: The inside scoop on how our government works with Chinese officials to open trade doors.