Hybrid agricultural model to support China’s food demand
China’s food security will ultimately rely on the professionalisation of its agricultural system through the infrastructure of research, education, and farm extension services, supplemented with the import of lower value feed grains from the US and Brazil as China continues to buy and build a global supply chain.
“Output efficiency of domestic crops in China have been significantly hindered in previous years”, states Rabobank analyst, Dirk Jan Kennes. “China’s farming industry is characterised by an unsustainably high level of nitrogen fertiliser (N-fertiliser) usage, and inefficiently low crop uptake of fertiliser nutrients (N-uptake). Its low agricultural production efficiency is also due to lower average arable land area per farm (restricting machinery usage) and relatively low-level farmer knowledge”.
China’s agricultural production is set to see a number of effective improvements under Government land reform policies. Farmers will have the opportunity to transfer collective land to large-scale, professional farms. In turn, this ‘professionalisation’ will encourage more operational economies of scale. For example, the development of family farms focussing on agricultural activities with greater economic value like intensive food-grain production in rotation with high added-value crops like potatoes, onions, and livestock farming.
In conjunction with this, governments, institutions, firms and farmers in China have been actively exploring ways to use fertiliser effectively, and some best practice standards have already been formulated. However, China’s fertiliser application rate is still accelerating and the current low levels of N-uptake means it is absorbed into the environment causing soil and water acidification, contamination of surface and groundwater resources, and rising greenhouse gas emissions. Imports of low-value grain from markets with better N-uptake and lower fertiliser input can supplement China’s domestic supply.
Feed grain imports can significantly improve the efficiency of the pork value chain, for example. The input of N-fertiliser per unit of pork production in China is 3.5 times greater than in the US. Importing the Dutch agricultural model of technology-intensive livestock farming as well as the N-fertiliser-to-corn efficiency from the Americas can significantly narrow the fertiliser to production output gap in China; and by doing so, China could also save more than 174,000 tonnes of nitrogen fertiliser inputs, 11 million tonnes of corn and nearly 1.75 million hectares of land greatly limiting environmental damage.
“China’s interest in acquiring and developing agricultural know-how as well as its initiative to buy-and-build a leading global agricultural trading house supports its agricultural development and is allowing it to make the best of both worlds”, states Kennes.
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