Content area
Full text
One of the questions raised by analysts of developments in the Chinese economy is whether China, which has about 22% of the world population but only 7% of its agricultural area, will be able to continue feeding its growing population essentially from domestic resources.1
Changes in the balance of supply and demand in China for main agricultural and food commodities, and for grains in particular, could have a strong impact on the world markets for these products. What China's future grain requirements might be has been hotly debated recently; the projections diverge markedly, ranging from forecasts of net exports to suppositions of huge import requirements, big enough to trigger strong price increases and market disorders, eventually even `starving the world.
A number of factors will affect demand, among them population growth, urbanisation and consumption patterns. The present rate of population growth - over 1% annually - is set to decline between 2000 and 2010, by which time the population is expected to reach a total of about 1.4 billion. A higher proportion of these people will live in urban areas than do today, with a higher share of livestock products in their diets.
But the main effect will come from an unprecedented surge in real incomes, driven by vigorous economic growth, averaging about 10% over the past ten years. The result has been a strong increase in demand for livestock products, meat in particular which in turn has required an expanding amount of feed grain. Since economic growth and per capita incomes are expected to continue their rapid expansion, demand for feed grains will very probably also continue to grow and should account for most of the future growth in China's total grain requirements.
The evolution of supply patterns will be largely determined by the pace of technological changes and trends in land management and use and possible environmental degradation. But the principal impact is to be expected from investment in the agro-food sector and incentives provided to farmers through market-oriented agricultural policies.
One of the policies China has adopted most recently in pursuit of its traditional goal of selfsufficiency in grain is the so-called `rice-bag policy. It provides provincial governors with responsibility for and control over grain production and supplies in their province...