Wednesday, April 30, 2014

Weather, climate change and China's food security

Apr 30, 2014

The success or failure of China's efforts to ensure food security in the wake of the uncertainties presented by climate change could have ripple effects that go well beyond its own borders.
By John Wong, For The Straits Times

A REPORT issued by the Intergovernmental Panel on Climate Change (IPCC) on April 13 warned that the effects of climate change, such as global warming and rising sea levels, are real. They are posing serious threats to the world's ecosystems, water supply, food security and eventually global economic production and social systems. As IPCC chairman Rajendra Pachauri put it, "nobody on this planet is going to be untouched by the impact of climate change".

Many of the risks of global warming may be long term and gradual. The long-term impact of global warming on agriculture is supposed to include lower crop yields, a reduction of arable land and a rise in pests and disease. But the actual threat of global warming to agricultural production could be felt sooner through extreme and abnormal weather conditions, which have already occurred in greater frequency.

The world is experiencing more and more natural disasters, from floods and droughts to typhoons. Such natural disasters will inevitably threaten global food security.
Large disaster-prone countries like China and India are particularly vulnerable to climate change. Historically, these two countries have always struggled to produce enough food to feed their teeming millions because of unfavourable land ratios. For them, climate change will no doubt undermine the already precarious state of food security.

China has the world's largest population. It is also the world's largest food producer, accounting for about 24 per cent of the world's total supply. China has experienced bumper grain harvests in recent years, rising from 430 million tonnes in 2003 to a record 602 million tonnes last year. As a result, China has been able to maintain food self-sufficiency at 98 per cent. This is well above the international standard of 95 per cent commonly considered a safe threshold of national food security.

Tapping Mao's experience
CHINA is already highly industrialised, with the agricultural sector contributing less than 10 per cent of total gross domestic product, compared to 39 per cent from manufacturing. However, China's leadership today still takes to heart Mao Zedong's adage: "An economy without strong agriculture is fragile, and a country without sufficient food grains will be chaotic." Ironically, Mao himself totally mismanaged Chinese agriculture. His disastrous Great Leap Forward (1959-1962) gave rise to a great famine.

Since then, the Chinese government has spared no effort to mobilise available institutional and economic resources to support agricultural production. At the beginning of every year, the first policy directive from the central government - known as "the No. 1 Central Directive" - has been concerned with agricultural and rural development.

Take the vintage year of 1957, before the launch of the People's Communes by Mao, and compare it with 2012. During the intervening 55 years, China's population grew by 127 per cent. Yet while the sown area for grain decreased by 20 per cent, output increased by 202 per cent. In other words, Chinese agriculture has succeeded in feeding more than twice the number of mouths since Mao's time.

The difference in output is due to productivity growth (more output per unit of land), which was made possible partly by the government's pro-agriculture policy, such as more investments in agricultural infrastructure. But it was mainly the result of intensifying the use of modern inputs ranging from high-yielding varieties (such as hybrid rice) to the heavy application of chemical fertilisers. China today accounts for 30 per cent of global fertiliser use.

Not surprisingly, the average yields of China's main grain crops today are very high by world standards. Its rice yields, though slightly below Japan's, are about twice those of Thailand and Indonesia. And China's wheat yields are much higher than Australian and United States levels.

Can China relax?
IN A sense, China's agriculture over the years has achieved a major technological transformation. It is also becoming increasingly more energy and capital intensive. Viewed from a different perspective, however, this suggests that China's grain production might have also hit its upper limit. Further growth needs to come with even more government support, more reliance on biological breakthroughs, perhaps even the adoption of genetically modified (GM) varieties.

This, coupled with decreasing trends for China's per-capita grain consumption (particularly in urban areas) due to rising income and greater affluence, has raised the issue of whether China should start relaxing its existing policies of high self-sufficiency.

The government could easily ditch its sacred 95 per cent self- sufficiency level and let international trade fill the gap. This is what Japan and South Korea have done. Economic theory will surely support the argument that China has strong comparative advantage in manufactured exports but less comparative advantage in producing more grain.

Opening a Pandora's box
HOWEVER, the mere notion of relying on the international grain market to fill a significant gap in China's food security will open a Pandora's box. Putting aside the politics of food security, China's sheer population size complicates matters. Annually, China imports only about 2 per cent to 3 per cent of its total grain supply. But that is quite a lot from the standpoint of world food trade.

Take rice. China is the world's biggest rice producer, accounting for 30 per cent of the world's total output. Last year, China also became the world's biggest importer when it bought 3.4 million tonnes, or just 1.6 per cent of China's domestic rice output.

Should China go to the international grain market for 10 per cent of its domestic demand - and Beijing certainly has the financial means to do so - the move would immediately destabilise the world food market. If China were to maintain its own food security by increasing imports, the result would be food insecurity for other food-deficit countries, particularly those in the developing world.

Suffice it to say that China's present food security is still precarious. Should any long-term adverse weather or climate change chip away a substantial part of that security, it would have serious consequences for both China and the rest of the world.

An uncertain future
JUST how will climate change impact China's food security?

According to the 2007 IPCC report, the expected effects of climate change could, under the worst- case scenario, lead to a drop in China's rain-fed yields of rice, and corn by 20 per cent to 36 per cent over the next 20 to 80 years.

Studies by Chinese scientists have also confirmed that the long-term warming trends of the past 20 years or so have been harmful for both wheat and corn, but beneficial for rice yields.

However, Chinese scientists are still unable to pin down the precise long-term impact of climate change on a particular crop. There is simply too much uncertainty surrounding the subject. At the moment, they seem to be more concerned about how agricultural production would be adversely affected by short-term natural disasters resulting from more frequent extreme weather changes.

Historically, floods and droughts have been very much part of China's rural life. And China has rich historical records of its past natural disasters. In the past, the Yellow River flooded so often that it was dubbed "China's sorrow". Indeed, it has burst its banks more than 1,600 times and changed course 26 times since 602BC.

The Yangtze is much tamer by comparison. But it still caused 214 large floods in the 2,000 years from the Han Dynasty to the late Qing, averaging about one major flood every 10 years. The last mega flood in the Yangtze was in 1998.

Since then, China has experienced no large-scale flooding, thanks to the government's vigorous flood control efforts. China has instead seen more and more serious droughts. Some people take this new phenomenon as a sign of global warming.

China's grain production is therefore still seriously affected by natural disasters. Instead of a long-term decline in average grain yields associated with climate change, the short-term outlook is likely to be more fluctuations in grain output caused by more short-term weather changes.

Output fluctuation carries serious economic and social implications. According to basic economic theory, the demand and supply of food are highly inelastic. Assuming no large stockpiling, a small shortfall in food supply on the market would therefore cause a disproportionate hike in food prices.

Older Singaporeans would still remember what happened in the early 1970s. As rice production in Thailand plummeted by 5 per cent and exports of Thai rice went down by 10 per cent, the price of Thai rice in Singapore shot up almost four times overnight.

Food items carry a large weightage in the consumer price index of developing countries, including China. These countries should brace themselves for more inflation as one of the more immediate consequences of climate change.

In 2008, China's National Development and Reform Commission published the "China National Plan for Coping with Climate Change", which mapped out adaptation policies to address problems of climate change. The suggested measures included more investments to further improve agricultural infrastructure, particularly pertaining to irrigation and water conservation.

It is in everybody's interest to wish China, and India, well in their efforts to safeguard their food security by effectively adapting themselves to the challenges of climate change.

The writer is a professorial fellow at the East Asian Institute, National University of Singapore.

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