China Agriculture:China Agriculture: ----Challenge & CountermeasuresChallenge & Countermeasures

TianzhiTianzhi RenRenChinese Academy of Agricultural SciencesChinese Academy of Agricultural Sciences

Email:rentz@mail.caas.net.cnEmail:rentz@mail.caas.net.cn

China, a country with more people China, a country with more people and few farming lands, make a great and few farming lands, make a great achievement in agriculture :achievement in agriculture : feeding feeding 21% people in the world with only 9% 21% people in the world with only 9% farming lands in the world.farming lands in the world.

1.3 billion people1.3 billion people’’s food;s food;737 million rural people737 million rural people’’s income;s income;42.6% labor force employment;42.6% labor force employment;35.4 billion$ exports of agricultural products;35.4 billion$ exports of agricultural products;

66% of the output value from light industry is 66% of the output value from light industry is based on agricultural products.based on agricultural products.

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Grain Meat aquatic product Milk

Food output in China

Grain per capita in China

0.0050.00

100.00150.00200.00250.00300.00350.00400.00450.00

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Per Capita Output of Livestock Products of China

Meat Milk Poultry Eggs

With the increase of population and With the increase of population and the development of industrialization and the development of industrialization and urbanization, shortage of agricultural urbanization, shortage of agricultural resources is becoming the restricting resources is becoming the restricting factor to agricultural development. factor to agricultural development. Chinese agricultural production and Chinese agricultural production and food supply will face big challenge.food supply will face big challenge.

1. Supply Pressure of 1. Supply Pressure of Agricultural ProductsAgricultural Products

1.1 Sort Supply of Agricultural Natural Resources1.1 Sort Supply of Agricultural Natural ResourcesFarming Land:Farming Land: Land per capita is about 1/3 of Land per capita is about 1/3 of

world average. Farming land per capita is only world average. Farming land per capita is only 1.39mu(<0.1Ha.), less than 40% of the world average. 1.39mu(<0.1Ha.), less than 40% of the world average.

Water: Water: ChinaChina’’s total water average: 2800 s total water average: 2800 bbillion illion cube meters, ranged 4th position in the World, about cube meters, ranged 4th position in the World, about 7% of the World water supply;7% of the World water supply; But the wBut the water per ater per capita is 2300 cube meters, about capita is 2300 cube meters, about ¼¼ of World average, of World average, ranged 110 in the World, and is one of 13 countries ranged 110 in the World, and is one of 13 countries with water deficient (3000with water deficient (3000－－1000)1000)..

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Agricultural Resource per Capita, Agricultural Resource per Capita, compared with The World Averagecompared with The World Average

Changes of total farming land in recent Changes of total farming land in recent years in Chinayears in China

19.4519.3819.24 19.14

18.89

18.5118.37

18.31 18.27 18.26

17.617.8

1818.218.418.618.8

1919.219.419.6

100 million mu

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Year

1.2 Disaster happens quite often, which often cause 1.2 Disaster happens quite often, which often cause heavy losesheavy loses

1950s: grain yearly lose from drought is about 4.35 1950s: grain yearly lose from drought is about 4.35 billion KG, about 2.5% of total production.billion KG, about 2.5% of total production.

1990s: grain yearly lose is about 20.9 billion KG, 1990s: grain yearly lose is about 20.9 billion KG, about 4.4% of total production.about 4.4% of total production.

2000s: the yearly lose is about 37 billion KG. 2000s: the yearly lose is about 37 billion KG.

Farming lands in China is now about 1826 million Farming lands in China is now about 1826 million mumu( about 121.7 million ha.), but only 830 ( about 121.7 million ha.), but only 830 million million mumu (about 45%) can be irrigated, (about 45%) can be irrigated, the others(55%) are feed by rain. Among the others(55%) are feed by rain. Among the irrigated lands, only about 200 million the irrigated lands, only about 200 million mumu have very good irrigation system.have very good irrigation system.

Drought Flooding

hails

Natural Disasters Happened in China

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Disaster affected Disaster cause loses Grain yield

1.3 Small farmers are very difficult to get enough 1.3 Small farmers are very difficult to get enough benefits from their landsbenefits from their lands

Chinese Farmer: 250millionChinese Farmer: 250millionLand scale per farmer: <0.5ha.Land scale per farmer: <0.5ha.

Disadvantages of small farm management:Disadvantages of small farm management:Difficult to get necessary information;Difficult to get necessary information;No economical to adopt new equipment, high No economical to adopt new equipment, high

production costs;production costs;High dealing costs, pay more to the circulations; High dealing costs, pay more to the circulations; Commodity ratio of grain production is only about Commodity ratio of grain production is only about

30%. 30%.

Land scales per farmer in ChinaLand scales per farmer in China

Year 1999 2000 2001 2002 2003 2004 2005

Farming land（ ×

10000 mu*） 193800 192400 191400 188900 185100 183700 183100

No. of Farmer（ ×

10000） 23810.3 24148.5 24432.5 24569.7 24793.4 24971.5 25222.4

Land scaleper farmer（mu）

8.14 7.97 7.83 7.69 7.47 7.36 7.26

*1 mu=1/15ha, From: Chinese agricultural statistics.

2. 2. Demands to Agricultural Demands to Agricultural Products keep IncreasingProducts keep Increasing

With the increase of population, the With the increase of population, the changes of population structure between changes of population structure between city and rural areas, and the changes of city and rural areas, and the changes of meal composition of Chinese people, the meal composition of Chinese people, the demand for grain is increasing in China.demand for grain is increasing in China.Compared with 10 years ago, Chinese Compared with 10 years ago, Chinese population gets an increase of 90.59 million, population gets an increase of 90.59 million, the grain per capita decrease from 412 kg in the grain per capita decrease from 412 kg in 1996 to 378 kg in 2006.1996 to 378 kg in 2006.

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Popul at i on Proj ect i on

2.1 Pressure from Population Increase2.1 Pressure from Population Increase

With the increased income, the consumption level is With the increased income, the consumption level is also enhanced. The demands for grain, meat, egg, also enhanced. The demands for grain, meat, egg, milk, plant oil, fruits, vegetable will also be increased.milk, plant oil, fruits, vegetable will also be increased.

The processed foodstuff consumption is only 30% of The processed foodstuff consumption is only 30% of the total food consumption in China nowadaysthe total food consumption in China nowadays，，but but it increased from 25.16 million tons in 1996 to 54.86 it increased from 25.16 million tons in 1996 to 54.86 million tons in 2004, with a yearly increase rate of million tons in 2004, with a yearly increase rate of 10.2%. 10.2%.

2.2 Pressure form Increasing Living Standard

The level of urbanization in China increased from The level of urbanization in China increased from 36.09% in 2000 to 43.90% in 2006.36.09% in 2000 to 43.90% in 2006.

Large number of rural people moving into city will Large number of rural people moving into city will increase the demand for agricultural product increase the demand for agricultural product consumption.consumption.

( The producer become the consumer of agricultural products, ( The producer become the consumer of agricultural products, which will increase the total consumption and total which will increase the total consumption and total commodity of agricultural products. In general, the energy commodity of agricultural products. In general, the energy consumption of people in town is 3.5 times of that in rural consumption of people in town is 3.5 times of that in rural areas, the meat, fruits and milk consumption are 2 times, 3 areas, the meat, fruits and milk consumption are 2 times, 3 times and 10 times respectively. times and 10 times respectively. ))

2.3 Pressure from Urbanization

Population and urbanization since 1978 Population and urbanization since 1978 in Chinain China

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People in total Urban people Urbanization(%)

3. Production Costs Increased, 3. Production Costs Increased, Benefits from Agriculture DecreasedBenefits from Agriculture Decreased

3.1 Means of production costs have been increasing in recent years

With the costs increase of means of production, Agricultural production costs will increase intensively.The price of urea, diesel oil, and agricultural filmincreased 26.6%、64.4% and 60% respectively in recent 5 years, and the production costs per unit increased 23.9%.

Price Changes of Urea between 2001-2007 in China

Year 2001 2002 2003 2004 2005 2006- 2007 2008

Chinese Yuan/ton 1279 1331 1498 1845 1850 2020 2800

The average wage of peasantThe average wage of peasant--worker worker increase more than 100 increase more than 100 yuanyuan every year in every year in recent years in coastal areas, some even with recent years in coastal areas, some even with 20% increase. 20% increase.

3.2 Labor Costs

Items 2000 2001 2002 2003 2004 2005

Yield (kg/mu**) 437.73 460.62 460.81 444.34 438.56 447.53

Output value 449.46 468.82 458.42 497.31 650.22 667.36

Production Costs 377.75377.75 378.01378.01 382.61382.61 410.93410.93 466.9466.9 513.98513.98

Material inputs 215.25 221.07 230.97 239.05 270.5 295.43

Labor inputs 162.50 156.94 151.64 171.88 196.4 218.55

Net income 71.71 90.81 75.81 86.38 183.32 153.38

Income/costs(%) 18.98 27.18 19.81 21.02 39.26 29.84

Price of 50 kg 51.34 50.89 49.74 55.96 74.13 74.56

* Including rice, corn, peanut, sugar cane and tobacco;** one mu = 1/15 ha.

The Average Production Costs and Income of Main Agricultural Products* in Guangxi, China

Unit: Chinese Yuan/mu**

The benefit decrease of grain production results in The benefit decrease of grain production results in the increase of opportunity costs, large number of the increase of opportunity costs, large number of young labor in rural areas transfer to position not young labor in rural areas transfer to position not related to agriculture.related to agriculture.Data from Ministry of Labor: the average wage of Data from Ministry of Labor: the average wage of outgoing rural labor is 1226 outgoing rural labor is 1226 yuanyuan/month in 2006, /month in 2006, much higher than grain production.much higher than grain production.The average monthly wage of water delivery: 2000 The average monthly wage of water delivery: 2000 yuanyuan, , babysittorbabysittor: 1500yuan, : 1500yuan, cargadorcargador: 1000yuan.: 1000yuan.

3.3 Opportunity Costs3.3 Opportunity Costs

4. Countermeasures & Experiences4. Countermeasures & Experiences

Farming land protection policy: A red line for China. (1.8 billion mu, or 12 million ha.）

19.4519.3819.24 19.14

18.89

18.5118.37

18.31 18.27 18.26

17.617.8

1818.218.418.618.8

1919.219.419.6

100 million mu

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Year

Developing resource-saving agriculture:Especially land and water: multiple cropping,

water-saving agriculture.Science and technology support:

Play important role in feed Chinese people in future.

Increase agricultural inputs: Provide subsidy to farmers, increase inputs to agricultural production bases.

Agricultural industrialization:Organize small farmer to engage agricultural goods production, let the farmer get more benefits.

Mar- 08

increase than last month

(%)

increase than last year (%)

Grain average** 81.17 0.37 7.77Wheat 79.83 0.26 7.10Rice 87.45 0.41 7.47Corn 71.72 0.41 9.15

Purchase price* of grain (Chinese Yuan)

* 50kg; ** including rice, wheat and corn.

Because Chinese government adopt all the measures, the grain price is much lower than the price in the World, though with little increase because of the inputs

The retail price* of some grain in city The retail price* of some grain in city markets of March 2008markets of March 2008

Early indica type rice: 1.92￥/kgLater indica type rice: 3.24￥/kgOrdinary rice: 3.54￥/kgStandard wheat flour: 3.12~3.3.58￥/kg*from China information network

SummaryChinese government has been paying Chinese government has been paying

great attention to agriculture, especially to the great attention to agriculture, especially to the grain production, and produced enough grain grain production, and produced enough grain to meet the increasing need.to meet the increasing need.

China has China has enough confidence, strong enough confidence, strong ability and abundant experienceability and abundant experience to feed her to feed her people in the future (more than 1/5 people of people in the future (more than 1/5 people of the world). This is a great contribution to global the world). This is a great contribution to global grain security. grain security.