Virtual Cultivated Land Trade：A New Thinking for Cultivated Land Resources Security

Li CHENG Tian-kun FANG Bo ZHANG College of Economics and Management

Shenyang Institute of Aeronautical Engineering Shenyang, P .R. China

Abstract—Virtual cultivated land refers to the quantity of cultivated land resources needed during the production of goods and service. This paper chose four kinds of main grain products i.e. rice, maize, wheat and soybean, and calculated their trade volume of virtual cultivated land. The result showed, from 1978 to 2007 the average annual net import of virtual cultivated land came to nearly 4.4 million hectares. Based on econometric equation, import of virtual cultivated land made great contributions to relieving cultivated land pressure, guaranteeing grain security and safeguarding sustainable development of ecological environment in our country.

Keywords-virtual cultivated land; grain trade; sustainable utilization of cultivated land

I. INTRODUCTION China is faced with the reality of large population with

uneven regional distribution and shortage of cultivated resources. In 2008, China has a population of 1.328 billion and cultivated land areas of 121.7 million hectares. Thus, cultivated land area per capita is 0.092 hectare, compared with 0.25 hectare of the world average. With fast development of social economy and gradual improvement of the industrialization and urbanization, cultivated land resources shortage and grain security and ecological environment problem initiated from this have already become main restriction factors for our country to realize sustainable development in the 21st century. Under such a background, it is how to realize sustainable utilization of cultivated land resources that becomes the urgent problem that we must think about.

Grain trade, including grain flow among regions, existed from ancient times. However, it wasn’t at the beginning of 1990s until people realized natural resources flow hidden in grain trade. The concept of “Virtual Cultivated Land” came from the concept of “Virtual Water”. “Virtual Water” was initially proposed in 1993 by English scholar Tony Allan, which refers to the quantity of water resources used for producing goods and service. Virtual water can not seen, which is deposited in the goods in an invisible way. Agricultural products trade between countries and regions actually imports or exports water resource in the form of virtual water in a way. Domestic scholar Guodong Cheng first introduced the concept of the virtual water in 2003[1]. And then Ai’hua Long and Xinhua Wang launched a series of research about virtual water [2] [3]. In production of the grain products, cultivated land

resources are necessary basic resources, too. Domestic scholar Zhenli Luo put forward the concept of virtual cultivated land and virtual cultivated land strategy for the first time on basis of virtual water in 2004[4]. Baoqing Hu constructed the assessment systems of virtual cultivated land security strategy at country level, and on the basis of assessment of two western countries short of food, put forward the effective virtual cultivated land enforcement measures in 2006[5]. On the analysis of maize’s allocation and transportation indexes such as quantity, output, sown area, etc, Lizhen Yan calculated the content of cultivated land resources of the maize, and drew conclusions that while meeting the grain demand of the southern area by the way of virtual cultivated land resources flow, the north area bore enormous economic ecological and social fair costs and should be supported in many aspects [6].

This paper calculated virtual cultivated land trade volume hidden in grain import and export trade in our country from 1978 to 2007, and analyzed positive contribution of virtual cultivated land trade to relieve cultivated land resources pressure and guarantee grain security and realize sustainable utilization of resources. Finally, it carried on the discussion on how to implement virtual cultivated land strategies.

II. CALCULATION METHODS AND DATA SOURCE

A. Calculation Methods 1) virtual cultivated land

Virtual cultivated land refers to the quantity of cultivated land needed for producing commodities or services. Virtual cultivated land strategy refers to that one country or region short of cultivated land resources can obtain cultivated land and grain security by importing cultivated land intensive products (mainly grain products) from that rich in cultivated land. A country or region which exports cultivated land resource intensive products, in fact exports cultivated land resources in the form of virtual cultivated land.

The virtual cultivated land trade volume of a country or region depends on the quantity of the imported and exported product and unit yield of that product. Their formula of calculation is shown as follows:

∑=

−=n

i i

ii

WEINVLI

1

（1）

978-1-4244-5326-9/10/$26.00 ©2010 IEEE

NVLI stands for net import volume of virtual cultivated land (unit: hectare/year); iI and iE stands for respectively import and export of crop (unit: kilo/year); iW stands for unit yield of crop (unit: kilo/hectare).

2) cultivated land pressure index Yingming Li proposed cultivated land pressure index which

was built as follows [7]:

First, calculate grain cultivated land area (cultivated land area multiplied by the proportion of grain sown area in total sown area);

Second, calculate land productivity of grain cultivated land (grain total yield divided by grain cultivated land area);

Third, calculate relative grain cultivated land area (grain output every year divided by the average land productivity in the base year);

Fourth, calculate relative cultivated land area (comparable grain cultivated land area divided by the proportion of grain sown area in total sown area);

Fifth, calculate cultivated land pressure index (abbreviated by CLPI):

1

211A

AofincreaseAofdecreaseCLPI ⋅⋅−⋅⋅+= (2)

1A stands for actual cultivated land area; 2A stands for relative cultivated land area.

The implication is: if the decrease of actual cultivated land area is less than the increase of comparable cultivated land, cultivated land pressure index has not increased.

B. Data Source In this paper, most data was from “China’s Agricultural

Development Research Report 1978~2007”. Among them, data of cultivated land area has taken new statistical standards since 1996. Therefore, we can’t directly use statistics of cultivated land area from the yearbook, but rather for its revision1 . In this essay, we take new statistical standards in 1996 as the basic point, and we revise data of cultivated land area over the years from 1978 to 1995.

III. CHARACTERISTICS OF GRAIN FOREIGN TRADE IN CHINA

Since reform and opening-up, our country had mainly been shown as grain net importer. As shown in Fig. 1, from 1978 to 2007, our country was grain net importer in 21 years, compared with net exporter in only 9 years. In 2004, net import reached the largest of 24.84 million tons, and in 1993 net export

1 By contrast, the data of cultivated land area after 1996 is relatively accurate and credible. And data change of cultivated land area over the years doesn’t have statistical errors. Therefore, we take cultivated land area in 1996 as a basic point, the revision formula is as follows:

）（ 6)1995199(1996)-5199(19961995 SS −−−= decreaseincreaseyearbook SS

reached the largest of 6.22 million tons. The grain foreign trade of our country mainly concentrated on rice, maize, wheat and soybean. Import volumes of four kinds of grain products accounted for 90% of grain total and export volumes accounted for 90.7% from 1978 to 2007. Among them, wheat and soybean were main import products, and rice and maize were main export products.

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Figure 1. Dynamic changes of net import volume of grain in China from 1978 to 2007

IV. CALCULATION OF VIRTUAL CULTIVATED LAND TRADE IN CHINA

This paper calculated virtual cultivated land trade volume of four kinds of grain products from 1978 to 2007 in our country. i.e. rice, maize, wheat and soybean (Fig. 2)

According to calculation results, virtual cultivated land trade of four kinds of grain products in our country had been keeping great unfavorable balance all the time from 1978 to 2007. Among 30 years, except in 1985, 1986, 1993 and 1994, virtual cultivated land trade turned out net import trade. Net imports of virtual cultivated land increased from 4.16 million hectares in 1978 to 19.09 million hectares in 2007 with an average annul growth of 5.4%.

From Fig. 2, from 1978 to 1984, net import volume of virtual cultivated land increased from 4.16 million hectares in 1978 to 6.26 million hectares in 1981, and then sharply fell to 2.2 million hectares in 1984. Virtual cultivated land trade turned out to be net export trade in 1985 and 1986. Since 1987, it then turned out net import trade of 2.58 million hectares. During 1987 to 1990, net import volume maintained from 2.5 to 3 million hectares. Virtual cultivated land trade fell into a state of violent fluctuation from 1991 to 1997, which decreased greatly from 1991 of 1.35 million hectares. Among it, it again turned out to be net export trade in 1993 and 1994. However, it grew to 4.6 million hectares in 1995, fell to 2.75 million hectares in 1996 and then further fell to 0.23 million hectares in 1997. Net import volume grew steadily during 1998 to 2007 and it reached nearly 20 million hectares.

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Figure 2. Dynamic changes of net import volumes of virtual cultivated land trade in China from 1978 to 2007

On calculation, from 1978 to 2007, trade volume of virtual cultivated land reached 241 million hectares in the grain foreign trade of our country with import volume of 186.67 million hectares and export volume of 54.38. The net import volume was 132.29 million hectares. Moreover, the average annual import volume of virtual cultivated land was 4.4 million hectares, as much as cultivated land area of Tianjin province (4.41 million hectares).

It is easy to find out without import of virtual cultivated land, our cultivated land would be under greater pressure. Moreover, that didn’t include the input expenditure of water, pesticide, chemical fertilizer needed to produce the grain, etc. High-intensity use and poor management of land led to that some of the cultivated land was severely degraded, affecting the sustained yield potential of cultivated land resources. China currently has 1.3 billion people, and it is estimated that the population will reach 1.6 billion at peak by 2030. Due to scarce cultivated land resources and growing population, China is under great shortage of cultivated land resources. China is a major grain-producing country with self-sufficiency of current domestic food need. However, we can not be optimistic about future prospects. If food shortage breaks out, we can’t underestimate its severe impact on domestic and international food security system. Grain trade, as a bridge connecting domestic and foreign markets, is an important means for the government to achieve macro-control. Food trade can not only alleviate the pressure of fluctuations in food production on food security but also has important practical significance to alleviating domestic pressure on cultivated land resources and maintain sustainable development of ecological environment.

V. VIRTUAL CULTIVATED LAND TRADE AND SUSTAINABLE UTILIZATION OF CULTIVATED LAND

The sustainable utilization of cultivated land refers to that cultivated land resources continue to maintain and steadily improve its basic capabilities for human services in an infinitely long period of time, which is within normal production levels of cultivated land resources in themselves. In the evaluation of the sustainable use of cultivated land, With reference to Five Major Goals and Evaluation Index officially proposed by FAO in “An International Framework for Evaluating Sustainable Land Management” in 1993, this essay selected five indexes and the equation is shown as follows:

5544332211 xaxaxaxaxacy ×+×+×+×+×+= (3)

TABLE I. RESULT ESTIMATION OF FUNCTION

Variable Estimate Value T-statistics

c 1.540177 2.45

X1 -0.000168 -2.99

X2 -5.731667 -1.23

X3 1.50E-05 1.36

X4 -0.003047 -3.07

X5 1.615440 1.03

R2 0.8607

F-statistics 139.29 Numbersof Observation 30

Among it, y stands for cultivated land pressure index; x1 stands for net import of virtual cultivated land; x2 stands for cultivated land area per capita; x3 stands for GDP per capita; x4 stands for grain yield per capita; x5 stands for the proportion of grain sown area in all crops sown area.

From Tab. 1, China's cultivated land pressure index is negatively correlated with net import of virtual cultivated land, cultivated land area per capita and grain yield per capita, while pressure index is positively correlated with GDP per capita and proportion of grain sown area in all crops sown area from 1978 to 2007.

Net import of virtual cultivated land has a negative impact on cultivated land pressure index, which means the more net imports of virtual cultivated land, the stronger the sustainability of cultivated land. Virtual cultivated land imports alleviate the pressure of domestic cultivated land resources and realize sustainable utilization of cultivated land resources on the basis of ensuring food security and ecological security.

Cultivated land area per capita also has a negative impact on cultivated land pressure index, which means the more cultivated land area per capita, the stronger the sustainability of cultivated land. Cultivated land is under greater pressure, due to disaster, occupied land for construction, agriculture structure adjustment and growing population.

Grain yield per capita also has a negative impact on cultivated land pressure index, which means the more grain yield per capita, the stronger the sustainability of cultivated land. This may result from that increased grain yield is due to the improvement of agricultural science and technology instead of more dependent on cultivated land.

GDP per capita has a positive impact on cultivated land pressure index, which means the more GDP per capita, the weaker the sustainability of cultivated land. With rapid social and economic development and the implementation of industrialization and urbanization, it has become an indisputable fact that secondary and tertiary industry has occupied cultivated land. China should think about urgently how to realize sustainable utilization of resource and ecology with the development of the economy.

Planting structure (proportion of grain sown area in all crops sown area) also has a positive impact on cultivated land pressure index, which means the more proportion of grain sown area, the weaker the sustainability of cultivated land. In meeting the food needs of the total cases, and actively guide farmers to adjust planting structure, which will help boost farmers’ income and alleviate the pressure of cultivated land to a large extent.

VI. CONCLUSIONS AND DISCUSSION On calculations and analysis, we drew conclusions as

follows:

In the grain foreign trade, our country is a net import country of virtual cultivated land at present. From 1978 to2007, the average annual net import of virtual cultivated land was nearly 4.4 million hectare, which effectively ensured cultivated land security in some regions.

Import of virtual cultivated land has a positive impact on sustainable utilization of cultivated land, and cultivated land area per capita and grain yield per capita also help ensure sustainable utilization of cultivated land. However, GDP per capita and planting structure exert a negative impact on sustainable utilization of cultivated land.

Virtual cultivated land strategy is suitable for both between countries and regions. The domestic “grain flow from north to south” is just a case in point. The virtual cultivated land hidden in the grain flows have widened the scope of cultivated land resource management and become the effective tool of guarantee cultivated land resources and grain security. Despite that, virtual cultivated land strategy may lead to grain

dependence of import countries, and also exert a negative impact on export countries, such as local over-exploitation of land resources. Therefore, we should moderately implement virtual cultivated land strategy to optimize resource allocation and industrial restructuring, thus achieving food security and ecological security.

REFERENCES

[1] Guodong Cheng, “Virtual water ─ a new strategy of the China’s water resource security,” Journal of the Chinese Academy of Sciences, pp. 260-265, April 2003 (in Chinese).

[2] Ai’hua Long, Zhongmin Xu, and Zhiqiang Zhang, “Water footprint of four provinces in the Northwest in 2000,” Glacier and Frozen Soil, pp. 692-699, December 2003 (in Chinese)

[3] Xinhua Wang, Zhongmin Xu, and Yinghai Li,“Water footprint assessment of gansu province in 2003,” Natural Resources Journal, pp. 909-915, Novemember 2003 (in Chinese)

[4] Zhenli Luo, Ai’hua Long, Huang Huang, and Zhongmin Xu, “Virtual cultivated land strategy and socializational management of land resource sustainable utilization,” Glacier and Frozen Soil, pp. 624-631, October 2004 (in Chinese)

[5] Baoqing Hu, Wangbin Yang, and Hui Shao, “Virtual cultivated land strategy and its application in the land sustainable utilization of the countries –Du’an and Tiandong in Guangxi province,” Tropical Geography, pp. 97-100, May 2006 (in Chinese)

[6] Lizhen Yan, Shengkui Cheng, and Qingwen Min, “The virtual cultivated land resources flow of the North to South and its factors’ analysis,” Journal of Graduate School of Chinese Academy of Sciences, pp.342-348, May 2006 (in Chinese)

[7] Yingming Li, “Analysis of resources and environment in agricultural sustainable development,” Doctoral thesis of China Academy of Social Science, 2006 (in Chinese)