China's food security is being challenged by a mix of factors, including rising demand, rapid urbanization, scarce natural resources and agricultural labor, and greater risk of food safety and environmental problems. To address food security concerns, China had resolved to meet the bulk of its grain demand domestically. But this policy is now being revisited, suggesting a considerable increase in the already rising food imports. The No 1 Central Document released on Sunday reiterated the importance of improving the food security system while ensuring food safety.
Though it deserves the highest priority, food security does not equal grain self-sufficiency. In addition to growing challenges, China remains home to the second largest population of undernourished people in the world (160 million or about 11 percent of the country's population). Besides, a large number of people in China suffer from lack of micronutrients in their diet, the so-called hidden hunger. Striking an efficient balance between grain self-sufficiency and food security is thus important to get on the road to food security.
The No 1 Central Document says the extent of China's grain sufficiency will be somewhat relaxed and the import structure optimized. This is a welcome move. Such a policy will allow China to make better use of the international market vis-a-vis the advantages of the country's agriculture sector. It will also facilitate improved allocation of resources among different commodities. Self-sufficiency targeted to specific food grains such as rice and wheat in which China has an advantage, can protect domestic consumers from volatile international grain markets and thus promote social stability.
Conversely, China can help the regional and global markets. Stable domestic grain supply can help China reduce volatility in the global markets, because the country accounts for a large share of rice and wheat production and consumption and any swing in its imports/exports will have a significant impact on global rice and wheat prices.
But the relaxation in the policy of complete grain self-sufficiency has to be gradual. To maintain the stability of markets, food trade policies need to be consistent over time and distortion in trade policies, which undermine both national and global food security, should be avoided. Trade barriers, such as import restrictions and import tariffs, are harmful to China's poor consumers because they make food more expensive for them and close the country's market to relatively poor farmers in exporting countries. Similarly, export bans or export taxes can cause harm to farmers as they would lose opportunities of accessing higher prices in international markets.
To ensure that food security is achieved efficiently, China has to adopt a comprehensive approach, which goes beyond securing food supply to include social protection for disadvantaged groups.
Moreover, agriculture must be treated as a business to boost food production. Funds for agricultural research and development, farmers' education and rural infrastructure should continue to receive high priority. To add value to agriculture, a supply chain, from production to processing and marketing , should be built and supported. More importantly, a mechanism should be established to ensure that small farmers benefit from the value addition.
This is the time for China to introduce land policy reforms in the agriculture sector. In particular, farmers should be encouraged to expand their farm size by allowing them to rent land or lease land-use rights. This will enable them to secure more arable land. Also, well-targeted social safety net programs should be put in place to protect rural migrants in cities who have chosen to give up their farmland but have not found a means of livelihood.
This is also the time to phase out agricultural subsidies, because they encourage inefficient use of agricultural inputs such as water and inorganic fertilizers. Increased agricultural production should not come at the expense of environmental sustainability and food safety. Recent efforts to keep up with the growing demand for food have, to a certain extent, compromised food safety because of the use of potentially hazardous inputs and production methods.
Sound regulation and regular monitoring of the entire food supply chain are critical to food safety. Small farmers and other value chain actors should be supported to meet food safety standards through, for example, information and training on safe production and processing methods.
The impact of unsafe food goes beyond the potentially detrimental effect on consumers' health. The loss of consumer confidence in China can suddenly shift preferences toward foreign-made food products. This will certainly hurt the domestic market and can potentially destabilize the international food market as it struggles to meet an abrupt jump in demand.
Apart from improving national food security, China also has the opportunity to enhance global food security. It could do that, for example, by diversifying its food imports from African and Latin American markets by investing in those regions. This will lead to win-win outcomes, because it would ensure a more stable supply of food for China as well as grant those regions access to the Chinese food market.
A comprehensive policy agenda will help China to achieve food security, and the country's new leadership will have a critical role to play in advancing that agenda.