"Food Policy" of Great Powers
China News Weekly reporter/Xu Dawei
Published in the 965th issue of China News Weekly on September 21, 2020
Food security concerns are becoming a cyclical topic.
This round of universal attention in 2020 is not groundless.
The global epidemic of the new crown epidemic this year once triggered fluctuations in the international food market.
"At least 25 countries will face the risk of severe famine this year, and the world is on the verge of the worst food crisis in 50 years." The United Nations World Food Program and FAO recently jointly issued the "Early Warning of Severe Food Insecurity Hotspots", which gave an order Worrying expectations.
In order to ensure domestic supply, since the outbreak of the epidemic, Russia, Vietnam, Egypt, India and other countries have restricted or even stopped food exports. The global food supply chain has been greatly impacted, and some countries that rely heavily on food imports have fallen into a great passivity. .
This has caused some people to worry about China's food security.
“Recent adjustments in the domestic food market and policies have accompanied the decline in the purchase of summer grain by the state-owned sector. In addition, the country’s top leaders once again seriously emphasized the elimination of food waste and advocated food conservation. Under the combined effect of many factors, the public and academic circles have significantly increased their attention to food security. "Lu Feng, a professor at the National Development Research Institute of Peking University, wrote in the latest article.
Zhang Xiaoshan, an agricultural expert and member of the Chinese Academy of Social Sciences, told China News Weekly that, on the whole, China has achieved "basic self-sufficiency in grains and absolute security in rations."
However, in the long run, China's grain production and consumption will be in a "tight balance" state for a long time, and it is still necessary to plan ahead to ensure China's food security.
Some experts also pointed out that in the "tight balance" state of food security, the most feared is market panic, which leads to hoarding and further aggravates panic.
High inventory is the confidence and burden
According to data provided by the Ministry of Agriculture and Rural Affairs, China's grain production reached 1.3 trillion jin in 2019, and the per capita consumption of raw grain rations was 150 kg.
Calculated in terms of synthetic food, 100 kilograms of rations can meet the consumption needs of a Chinese person for one year.
Pan Wenbo, director of the Plant Management Department of the Ministry of Agriculture and Rural Affairs, pointed out that China's current per capita food consumption is 472 kg, which is higher than the international food security standard of 400 kg per capita.
The "China Agricultural Industry Development Report 2020" shows that in 2019, the self-sufficiency rate of China's three major staple grains of rice, wheat and corn reached 98.75%, and there is no import dependency problem.
Several interviewed experts also told China News Weekly that there is no shortage of food rations in China and food security is completely guaranteed.
A large part of China's confidence in ensuring food security comes from grain stocks.
How much grain is stored in various grain depots in China?
In recent years, under the aura of increasing grain production year after year, China's three major staple food stocks have been high.
According to statistics, the total ending inventory of my country's three major staple grains of rice, wheat, and corn in 2019 is about 280 million tons, of which the ending inventory of the two major rations of rice and wheat exceeds the highest level in history.
The relevant person in charge of the State Bureau of Grain and Material Reserves stated that China's rice and wheat stocks can meet the country's demand for more than one year.
This means that even if the supply of foreign food is cut off, the 1.4 billion Chinese will still have food to eat.
Cao Baoming, dean of the Institute of Grain Economics at Nanjing University of Finance and Economics, believes that China’s domestic food reserves are too large, and there will be no shortage of food supply for at least three years.
Generally speaking, there are two dimensions to measure a country's food supply, one is supply and demand, and the other is production and demand.
Cao Baoming told China News Weekly that from the perspective of production and demand, China's grain supply is "tightly balanced," but from the perspective of supply and demand, China's grain supply is in excess.
Specifically, according to data from the Ministry of Agriculture and Rural Affairs and the General Administration of Customs, the total annual rice consumption in China from 2019 to 2020 is about 197 million tons, and the domestic annual rice output is about 199 million tons; the total annual wheat consumption in China is about 1.12 100 million tons, with an annual output of about 118 million tons, which represents a "tight balance" of production and demand.
In 2019, China's grain imports were 106 million tons, of which 17.85 million tons of cereals and grain flours, plus a total stock of 280 million tons of staple food, resulted in an oversupply of food.
China’s production of rice, corn, and wheat is greater than demand, and there is a large backlog of stocks, but at the same time soybeans and rapeseed are also imported in large quantities.
"On the one hand, there is no place to release more production, and there is a backlog, which takes up a lot of financial funds; on the other hand, there is no (production), and a large amount of imports are dependent on foreign countries." Chen Youquan, deputy director of the Plant Management Department of the Ministry of Agriculture and Rural Affairs, believes This status quo has become one of the outstanding issues affecting national food security.
China's grain stocks are divided into two major parts: reserve stocks and commodity stocks. Reserve stocks are further divided into central reserves and local reserves.
After the 2008 global food crisis, China has established a food reserve system based on central reserves, provincial reserves as support, and cities, counties, and enterprise reserves.
Under the responsibility of the grain governor, the locality is required to maintain the reserves of three months in the main grain production area, six months in the main sales area, and four and a half months in the production and sales balance area.
Since the beginning of this year, the grain reserve stocks of Shanghai, Yunnan and other provinces and cities have all reached historical highs.
But excessive inventory is another burden.
Zhong Yu, director of the Industrial Economic Research Office of the Institute of Agricultural Economics and Development of the Chinese Academy of Agricultural Sciences, was deeply impressed by this in an investigation.
From late March to early April 2019, he went to Henan and Hubei provinces for investigation with the research team of the Chinese Academy of Agricultural Sciences.
Zhong Yu told China News Weekly that during investigations and visits, it was found that the proportion of aged grains in the grass-roots grain depots in these areas was too high and the storage time was long, which became invalid stocks.
Among them, the staff of the grass-roots grain station in Dengzhou said, “The grain in the grain depots in the main producing areas has already reached the throat”, but because of the high price and the high rate of unsold auctions, it is basically in a state of no circulation.
The research team also learned that in the spring of 2019, the grain transaction rate in Tuo City, Henan Province was less than 0.2%, and the transaction rate in Hubei was almost zero.
The chairman of a grain company also reported that 70% to 80% of Henan's grain has entered the grain depot of China Grain Storage, but the processing company cannot receive grain.
"The grain is in the warehouse and will not come out" is the common feeling of many processing companies.
Some grain varieties have experienced a periodical surplus, which is a superposition of the "three highs" of high yield, high purchase volume, and high inventory.
For example, in October 2015, the National Grain Administration pointed out that the amount of grain stored by various grain and oil storage enterprises in China is "unprecedented", and the amount of national policy-related food stored in open air and simple storage facilities is also "unprecedented."
Under the high inventory, the stocks of corn, rice and other grains in the Jilin Branch of China Grain Reserve were seriously overloaded, especially when the corn warehouses were full, "not selling, transferring, or storing."
In Henan, more than 30 million tons of policy-oriented grain were purchased and stored. Due to the insufficient capacity of the granary, the policy-oriented grain collection and storage could no longer be initiated.
The state implements static management of grain reserves at all levels. Once the size of the reserve is implemented, it cannot be released from the warehouse without the approval of the relevant department.
"Economic Daily" once reported that storage companies often delay the rotation due to the disconnect between planning instructions and the market. They cannot take turns when food prices are high, and dare not buy when food prices are low.
The rotation of grain reserves often falls into the dilemma of "high price in, low price out", the price difference of rotation is getting bigger and bigger, and the reserve companies suffer serious losses.
The former Secretary of the Party Committee of Henan Economic and Trade Senior Technical School and the current investigator of the Henan Provincial Grain Bureau, Ren Weimin, once wrote that the purpose of food procurement is ultimately for sales, not for storage. "Treasury for the market" has become an exception. Everyone expects to extend the storage time to obtain more storage costs and interest subsidies, which seriously distort the basic principles of purchase and sale.
Cao Baoming believes that high grain inventories have brought a huge financial burden, and also caused a decline in grain quality and value.
At the national level, there are clear regulations on the storage life of different varieties of grain.
Among them, south of the Yangtze River, the storage life of rice is 2~3 years, corn 1~2 years, and beans 1~2 years; north of the Yangtze River, rice storage life is 2~3 years, corn 2~3 years, beans 1 ~2 years.
In comparison, the storage of corn is relatively simple, while the storage of rice is not easy. It is difficult to carry out biological transfer, and it is undoubtedly a difficult problem to deal with the huge amount of old grain that has been eliminated.
Zhang Xiaoshan, an expert on agriculture, rural areas and farmers and a member of the Chinese Academy of Social Sciences, believes that grain is not tolerant to storage, and excessive grain reserves are a waste of resources.
There will be costs after grain storage. From the perspective of finance and storage facilities, a further substantial increase in grain stocks is an unbearable burden.
The cost of growing grain has increased significantly in the past ten years
Short-term or cyclical grain supply and demand and price fluctuations have become one of the thorny issues that threaten the sustainable growth of China's grain, and this has been a consensus in the academic circles.
A number of interviewed experts pointed out that the key to ensuring China's food security lies in mobilizing farmers' enthusiasm in growing grain, so that farmers "do not suffer from growing grain."
However, for China's grain production, another problem is that the cost of growing grain is high, while farmers' income is low.
From the perspective of input costs, data from Qishengyuan Agriculture in Jiangxi Province show that a total of 760 yuan was spent on raising rice seedlings, plowing, pesticides, fertilizers, and harvesting for one acre.
Calculated on the basis of 1,000 jin of dry grain per mu and 1.35 yuan per jin of grain, the income per mu of rice field is 1,350 yuan, and after deducting the cost, the profit per mu is only 590 yuan.
Professor Han Fuling of the School of Finance of the Central University of Finance and Economics posted on Weibo an income statement for one mu of wheat in Xinzhuang Village, Wen'an County, Hebei Province. Based on the yield of 843 kilograms of wheat per mu, the income per mu is 843 yuan.
Excluding the costs of seeds, fertilizers, irrigated land, pesticides, sowing, and harvesting, the net income of farmers planting one mu of wheat is 243 yuan.
There is no calculation of labor costs.
Mao Xuefeng, a professor at the School of Agriculture and Rural Development of Renmin University of China, told China News Weekly that rising land costs and labor costs are the key factors driving the continuous increase in the cost of food production in China.
In the past decade or so, the unit production cost of grain has risen significantly higher than the United States and Brazil, and the cost gap has gradually widened.
Labor costs and land costs are high, and the core problem lies in the limited degree of mechanization of many products.
In order to solve the low income of farmers and increase the enthusiasm for growing grain, China has successively implemented four types of agricultural subsidy policies since 2004, namely direct grain subsidies, subsidies for improved varieties, subsidies for purchase of agricultural machinery and tools, and comprehensive subsidies for agricultural materials.
In 2016, China implemented the agricultural "three subsidies" policy reform, combining the previous direct subsidies for grain, comprehensive subsidies for agricultural materials, and subsidies for improved crop varieties into subsidies for protecting arable land.
However, the “embarrassment” of the direct grain subsidy policy is that the subsidies are often not paid for grain, but for farmers or farmland. The increase in subsidies for crops often drives up the rent of farmland leased land, creating disputes. Secondly, the amount is not large, the subsidy funds are distributed in many links, and relative to the situation of rising prices of agricultural materials and low grain income, small subsidies have limited promotion of farmers' enthusiasm for growing grain.
An investigation report by the Jiangxi Supervision Bureau of the Ministry of Finance also corroborates this point.
The report pointed out that the three subsidies for food have become less attractive to farmers, and young and middle-aged farmers are unwilling to grow food.
The main reason is the low efficiency of farmers growing grain. At present, farmers in Jiangxi earn less than 1,000 yuan per mu from growing grain, which is only equivalent to farmers' income from 4 to 7 days of work. In some places, the number of contracted arable land is used to simply calculate farming. As a result, three subsidies have become income subsidies under the GSP. Some farmers do not grow grain but still enjoy direct grain subsidies.
Dang Guoying, a researcher at the Institute of Rural Development of the Chinese Academy of Social Sciences, pointed out to China News Weekly that China’s agricultural subsidy policy requires reflection.
He believes that if subsidies are eliminated, it will be even less cost-effective for farmers to grow land, but subsidies can be reduced, and the focus should be on reducing costs.
Dang Guoying's investigation found that the price of imported grain in the United States is 30% cheaper than domestically produced grain. If the price of domestically produced grain is reduced by 30%, most Chinese farmers will choose not to plant land. “We must engage in large-scale operations to reduce costs and we must promote modern agriculture.” .
In order to cope with the high cost of growing grain, China has implemented a minimum grain purchase price policy since 2004.
Before that, starting in 1993, China implemented a ten-year protective price acquisition policy.
The starting point of the two rounds of reform of the grain price formation mechanism is to promote the marketization of grain prices.
However, due to various reasons, they failed to break through the price barrier.
Zhang Xiaoshan pointed out that the minimum purchase price and temporary purchase and storage price policies do not fluctuate with the cost of growing grain, diluting the cost of growing grain and directly distorting market signals.
Grain purchase prices have been increasing year by year, and deviating from market rules, domestically produced grains have received receipts into storage and imported grains have entered the market.
Dang Guoying also pointed out that the phased structural surplus of grain varieties in the market is all related to price policy adjustments, indicating that the price mechanism is not sensitive.
"This is the direction for market-oriented reform of price-compensation separation." Zhang Xiaoshan told China News Weekly that China is currently implementing a market-oriented reform of the price formation mechanism for agricultural products. "That is to say, subsidies and prices are separated from price-compensation, and prices are prices. , Subsidies are subsidies, and prices must follow the market."
Mao Xuefeng believes that the overall direction of food price reform is correct, but policy inertia and multi-party interest weighing need to be considered.
He suggested that the reform first requires the formation of a market mechanism. The government should not intervene too much in grain prices to encourage farmers to grow grain with prices; secondly, it is necessary to improve grain quality, liberalize prices, and achieve high-quality and better prices.
Individual grain producing areas are seriously degraded
In fact, it is not just ordinary farmers who feel that growing grain is "losing", but also local governments.
In some places in the southwest, there is a widespread rumour that “to get rich, shoveling out corn is the way out”, and grain production and economic development are invisibly opposed.
During his investigation, Zhong Yu found that some places called for the reduction of corn to grow cash crops, but the first reduction was the rice fields in dam areas with good irrigation conditions and gentle slopes.
Insufficient investment in grain production has made the local grain production and demand gap increase year by year.
Among the 6 counties and cities in the 2 provinces of Yunnan and Guizhou investigated by Zhong Yu, whether it is a large grain-producing county or a small producing county, the degree of self-sufficiency has declined to varying degrees.
For example, the ration consumption gap in Puding County, Guizhou reaches 46%; the local rice output in Shuicheng County, Guizhou is only 10,000 tons; the total grain output of Xuanwei County in Yunnan is roughly enough for the feed consumption of pigs, and more than 95% of the ration needs to be adjusted outside.
Due to insufficient grain production, the number of grain transfers in the above-mentioned six counties and cities is increasing, and the degree of foreign dependence is increasing. "Northeast rice, Henan" is the main body of local ration supply.
The research report of the Chinese Academy of Agricultural Sciences shows that Yunnan and Guizhou provinces are degrading from the grain production and sales balance area to the main sales area. The degradation trend is accelerating and the degree of degradation continues to deepen.
The report believes that a deviation in the understanding of food security is one of the reasons for this situation.
There are also obvious shortcomings in the local comprehensive food production capacity: the degree of land fragmentation is high, the degree of scale is low, the production cost is high, and the ability to resist natural disasters is weak.
Even if the planting area reaches more than 20 mu in Zhijin County, Guizhou Province, even if it is a large planting household, there are only 100 pure-bred grains among the more than 1,000 large planting households in the county.
The grain production in Xuanwei County of Yunnan Province is basically a single household, and the farmland turnover rate is only 10%.
Because there is no moderate scale operation, the cost of food production and management is high.
The income of rice in Huachu Town, Puding County, Guizhou Province is 1,000 yuan per mu, and the cost of five labors is as high as 1,090 yuan.
In 2018, the grain mechanization rates of Zhijin, Xuanwei and Yiliang counties were 15%, 30% and 52%, which were far lower than the national average of 80%.
The research report of the Chinese Academy of Agricultural Sciences shows that the proportion of effective irrigated area in Guizhou Province is only 24.7%, and that in Yunnan is 29.8%, which is far below the national average of 50.3%, ranking first and fifth in the bottom of the country.
Yunnan has 47.979 million mu of low-yield fields with a yield of less than 500 kilograms per mu, accounting for nearly half of the arable land, and there are a large variety of food crops, which are greatly affected by natural disasters.
In recent years, grassland armyworms, armyworms, aphids, and stem borers have come in turn in Yunnan, and the pest situation is severe.
In addition, local storage and drying equipment are lacking, and the problem of corn mildew is prominent.
Companies in the Yiliang Feed Industry Park can only transfer and process them from Heilongjiang, Inner Mongolia and other places because the local corn aflatoxin exceeds 50%.
The problem of large-scale operation also plagues traditional grain-producing areas.
Relevant data show that the scale operation of new business entities in Heilongjiang and Jilin provinces has accounted for half of the local land area.
However, Zhong Yu's investigation found that the risks of large-scale operation of new entities in Heiji and Jilin are increasing.
The fluctuation of local land rents has intensified, and the linkage effect of land operating income, subsidies and land rents has been prominent. Good management will drive the increase of land transfer prices.
In terms of disaster resilience, the disaster response capacity of local farmland water conservancy and other infrastructure is seriously insufficient, and farmland infrastructure has always lacked strong support from relevant policies.
In addition, with low insurance coverage and high compensation thresholds, farmers have limited compensation.
At present, some major grain-producing provinces in China have not yet fundamentally resolved the dilemma of "a strong grain province-a low economic province-a weak fiscal province". The phenomenon of "financial and grain upside down" is obvious, and there are structural contradictions between the main grain producing areas and the main grain sales areas.
Mao Xuefeng believes that to solve this contradiction, it may be necessary to consider giving policy preference to the main grain-producing areas, but only a little transfer payment cannot solve the actual problem.
Zhang Xiaoshan pointed out that major grain-producing provinces such as Heilongjiang and Inner Mongolia are making development sacrifices to ensure China's food security.
For these major grain-producing provinces, a feedback mechanism should be established to adjust the distribution pattern, and the state finance should give more priority to the major grain-producing provinces.
Cultivated land protection under multiple pressures
"When considering food security, we often pay too much attention to inventory. In fact, food security is a systematic project. In the short term it is inventory safety, and in the long term it is production safety." Chen Ming, executive researcher at the Institute of Political Science, Chinese Academy of Social Sciences It is pointed out that storing grain in the warehouse is not as good as storing grain in the ground, storing grain in technology, and storing grain in agriculture.
The amount of cultivated land is the "basic disk" of China's food security.
The red line of 1.8 billion mu of arable land is a binding indicator for China to ensure the amount of arable land. It is regarded as a "safe line" to ensure food security in China.
In 2017, the State Council issued the "Outline of National Land Planning (2016-2030)", which clearly requires that the amount of cultivated land in my country should be maintained at 1.865 billion mu and 1.825 billion mu by 2020 and 2030.
Wang Xiaoying, a researcher at the Institute of Rural Development of the Chinese Academy of Social Sciences, told China News Weekly that the red line of 1.8 billion acres of arable land is not a “brain-based marking”, but is determined by relevant departments such as land resources management through systematic research and calculation, and passed the compilation of the central government. , Province, city, county and township level 5 territorial and spatial planning to implement.
The red line of 1.8 billion mu of arable land means that the food ration security of the Chinese can be guaranteed and can be maintained.
However, China's farmland protection still faces pressure from many aspects.
The first is the continuous decrease in the area of arable land.
Chen Xiwen, the former director of the Central Agriculture Office, once said that in the 11 years before 2008, the total area of arable land in China had decreased by 125 million mu. Because it was scattered in various places, it took another 11 years, so it did not arouse many people's vigilance.
The latest issue of the "Statistical Bulletin of China's Land, Mineral and Marine Resources" released by the Ministry of Natural Resources in 2017 shows that at the end of 2017, the country's arable land area was 134,863,200 hectares, and the net reduction of arable land was about 910,000 acres during the year.
While the arable land is decreasing, the momentum of arable land abandonment is also intensifying. There are "seasonal abandonment", "non-grain abandonment" and "absolute abandonment".
In the mountainous and hilly areas of southern China, the per capita arable land is too small to maintain the basic survival of farmers, and large areas of arable land abandoned throughout the year can be seen everywhere.
In addition to the reduction of cultivated land, China's current over-utilization of cultivated land and soil pollution have led to a decline in the quality of cultivated land, which is becoming another hidden concern that threatens China's food security.
The Minister of Agriculture and Rural Affairs Han Changfu pointed out that in recent years, the total area of arable land in China has been stable at about 2.03 billion mu, but the load of arable land has been increasing year by year.
In terms of quantity, the country’s newly-added construction land occupies an average of 4.8 million mu of cultivated land per year. Although there is a balance between occupation and compensation, the net decrease of cultivated land from 2010 to 2017 is more than 7.8 million mu.
In terms of quality, many places are degraded and polluted seriously. Some places occupy good land, replenish bad land, occupies water and dry land. In 2016, the national high-quality arable land only accounted for 29.5%.
According to Wu Yi, deputy director of the Research and Development Center of China Agricultural Group, the contribution rate of China's arable land base fertility to food production is only 50% to 60%, which is 20% lower than that of developed countries in Europe and America.
The problems of non-point source pollution, arable land acidification and compaction in China's agriculture are very prominent.
In addition, according to experts from the Institute of Geographical Resources of the Chinese Academy of Sciences, my country consumes about one ton of water for every kilogram of grain produced.
At present, the grain output in the north is much higher than that in the south, but the Huaihe River and the northern regions, which account for more than 60% of the country's total arable land, have less than 20% of water resources, and resource and environmental constraints are constantly tightening.
Many experts told China News Weekly that the most important challenge facing China's farmland protection is still the rapid expansion of urbanization and the extensive waste of land use.
Wang Xiaoying believes that China’s basic national conditions are the extremely disharmonious relationship between man and land. China is currently in a period of rapid urbanization and industrialization. It is extremely difficult to ensure food security on the one hand and land for urban construction on the other. balance.
Under the turbulent wave of urbanization, another hidden worry for food security is that a large number of farmers enter cities, which aggravates the shortage of rural labor and affects food production.
For example, Hunan and Jiangxi provinces are double-cropping rice areas. Due to the reduction of labor force, many places are slowly growing only one-cropping rice.
A large number of agricultural laborers are transferred outwards, and in this process, a large amount of land is transferred.
At present, more than 70 million rural households have transferred contracted land, but the reality in China's rural areas is still a "big country and small peasants".
Data from the third agricultural census shows that the number of small farmers in my country accounted for more than 98% of the main agricultural operations, small farmers accounted for 90% of agricultural employees, and small farmers accounted for 70% of the total arable land area.
There are 230 million rural households in my country, with an average operating scale of 7.8 mu, and 210 million rural households operating under 10 mu of cultivated land. This is a small-scale or even ultra-small-scale business pattern.
Zhang Xiaoshan told China News Weekly that among the more than 200 million rural households in China, only 30%-40% of them have truly transferred land and achieved moderate scale operations.
Zhang Xiaoshan believes that large-scale agricultural operations can increase labor productivity, but in this process, it is impossible to drive all these small farmers out of agriculture.
In fact, the "5060 Troops" composed of middle-aged and elderly people in rural areas are taking on the heavy responsibility of China's food production.
The "fate gate" controlled by multinational grain merchants
On August 25, China and the United States signed another large import order for agricultural products.
China again purchased 204,000 tons of US soybeans and 408,000 tons of US corn.
"China News Weekly" learned from the Ministry of Agriculture and Rural Affairs that with the implementation of the first phase of the Sino-US economic and trade agreement, soybean imports from the United States are expected to continue to increase.
Not only soybeans, but China has a large annual import demand for agricultural products such as cotton, vegetable oil, sugar and meat.
In fact, China has become the world's largest food importer, with an annual import value of up to 180 billion US dollars.
Cheng Guoqiang, an expert member of the Central Agriculture Office and the Ministry of Agriculture and Rural Affairs, and former secretary-general of the Academic Committee of the Development Research Center of the State Council, told China News Weekly that China wants to maintain an overall balance of supply and demand for agricultural products. It is estimated that it needs 3.85 billion mu of planting area, compared to only 25 in China. 100 million mu of planting area, which means that the 1.35 billion mu of planting area gap is resolved through imports.
Cheng Guoqiang pointed out that although China is the world's largest food importer, it has not formed a relatively complete and reasonable supply chain in the global food market, and China's food import sources are relatively concentrated and the import channels are relatively single.
For example, in bulk grain trade, China often purchases through multinational grain companies.
Multinational food companies actually control the global food trade and circulation system, which affects the stable supply of global food.
Taking soybeans as an example, China’s main importing countries are Brazil, the United States, and Argentina, while international grain merchants headed by ADM, Bunge, Cargill and Louis Duff, control more than 70% of the soybean supply in South America and the United States.
Cheng Guoqiang told China News Weekly that the core of the business logic of international grain merchants is to master warehousing. Mastering warehousing facilities means controlling the supply of goods.
"International grain merchants take agricultural products from origin to warehousing, to port shipping and other logistics links, and finally to the target market. The entire global supply chain is firmly grasped. How prices fluctuate in the international market is just left-handed and right-handed to them. Relationship." Cheng Guoqiang said.
In the past 10 years, with the upgrading of China's consumption structure, the consumption of meat, eggs, and milk has huge room for growth. International grain merchants have focused on investing in the feed supply end of the upstream industry chain, while some foreign capital has been deeply involved in the domestic breeding industry.
Cheng Guoqiang believes that the domestic investment behavior of multinational grain merchants only follows business logic and should not politicize business logic.
On the contrary, Chinese grain companies should learn more about how international grain merchants lay out the global grain supply chain system.
In Cheng Guoqiang's view, Japan's food security strategy is worth learning from China.
In recent years, Japan's comprehensive food self-sufficiency rate calculated by calories has been hovering around 40%.
If calculated by physical agricultural products, Japan's food self-sufficiency rate is only 29%.
In 2017, the "Global Food Security Index Report" published by The Economist magazine showed that Japan ranked 18th among the 113 participating countries, far higher than China, which ranked 45th.
As early as the early 1970s, Japan tried to use overseas resources to ensure a stable supply of domestic food through the "overseas farming" investment method.
Cheng Guoqiang suggested that Chinese food companies should be encouraged to go global, deeply participate in the agricultural industry system of countries rich in agricultural resources, deploy warehousing, logistics and other supply chains, and at the same time cultivate some "hardcore" trading partners to get rid of dependence on traditional agricultural exporting countries and resist the possibility Emerging trade risks.
China News Weekly, Issue 34, 2020
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