IndustryConsolidate the foundation of national food security
Food is of paramount importance to the people, and food comes first. Food security is the 'greatest concern of the country'. China has always attached great importance to the issue of food. On the basis of stabilizing at over 1.3 trillion catties for nine consecutive years, the total grain output will reach a new level of 1.4 trillion catties for the first time in 2024, and the confidence in food security will be stronger. The Third Plenary Session of the 20th Central Committee of the Communist Party of China made a systematic deployment to improve the institutional mechanisms for ensuring food security. At the Central Rural Work Conference held at the end of 2024, food security once again occupies an important position, clarifying the focus of stable production and supply, and providing targeted support through a package of policies. In this issue, "Dialogue Economist" invited Cheng Guoqiang, president of the National Institute of Food Security Strategy, Renmin University of China, to analyze and interpret relevant issues.
Not only does supply and demand affect global food security
Host: The World Food Programme has released its Global Outlook 2025, calling for the mobilization of funds to meet food demand. What is the current global pattern of food supply and demand? Is there still a food crisis?
Cheng Guoqiang: According to a report by the World Food Programme, the global food security situation in 2024 is more severe compared to 2023, with a 10% increase in the number of people facing hunger. According to data from the Food and Agriculture Organization of the United Nations, the global food security situation has not been optimistic in recent years, with food insecurity levels returning to about 15 years ago, equivalent to the level between 2008 and 2009. Approximately 1 out of every 11 people worldwide suffer from hunger, especially in Africa where 1 out of every 5 people face the problem of difficulty eating.
The current global food security situation is relatively deteriorating, but this is not due to the supply and demand of food. According to data from the Food and Agriculture Organization of the United Nations, global food production has shown an increasing trend in recent years, with a slight increase in 2024 compared to 2023. From the perspective of consumption, production exceeds demand, and the ratio of grain inventory to consumption is 30%, which is higher than the safety level of 17% proposed by the Food and Agriculture Organization of the United Nations, indicating that there is no problem with food security. But why are there still over 700 million people worldwide facing food security threats? This is because the global distribution of food is uneven, especially in developing countries where there are some shortcomings in agricultural production capacity and insufficient comprehensive food production capacity. Although the global food supply and demand are generally balanced, developing countries face significant challenges. For example, developing countries as a whole have a wheat production capacity of about 380 million tons, but demand is over 500 million tons. This means that developing countries have to import wheat from developed countries to make up for the domestic supply and demand gap.
Host: Several important conferences in our country have mentioned grain prices. In your opinion, what factors will affect the significant fluctuations in the international grain market in 2024?
Cheng Guoqiang: Global grain production will increase by 2024, and overall production and sales will be balanced. According to the mechanism of price changes, prices are mainly influenced by supply and demand. If production exceeds demand, it means that the entire grain price is in a relatively stable state. But in fact, in the past 20 years, there have been three major fluctuations in grain prices worldwide, namely in 2008, 2012, and 2022. Grain prices are mainly influenced by supply and demand, but not determined by supply and demand. Since reaching its peak in 2022, global grain prices have been in a downward trend due to geopolitical conflicts and the global economic downturn, causing fluctuations in the international grain market.
This reflects that in the global food security landscape, in addition to traditional factors such as supply and demand fundamentals, there are also many non-traditional factors that determine the food security situation, including geopolitical conflicts, climate change, macroeconomic conditions, etc. Especially for some developing countries with insufficient agricultural production capacity, the gap needs to be filled through imports. Global food production and trade are highly concentrated in a few countries, and policy changes in these countries will affect food prices, making global food security face more complex challenges.
The 'Trinity' ensures the stable employment of rice bowls in China
Host: After discussing the global food market, let's take a look at China's food security situation. What are the main categories of grain varieties in China? How is the production and import situation?
Cheng Guoqiang: There are three main types of grain in China. One is grains, such as rice, wheat, corn, sorghum, barley, etc., with an annual output of approximately 640 million tons. The second is legumes, such as soybeans, mung beans, black beans, etc., with an annual output of approximately 23 million tons. The third is potatoes, such as potatoes and sweet potatoes, with an annual output of approximately 30 million tons. The current grain production in our country has reached 700 million tons.
Since the 18th National Congress of the Communist Party of China, General Secretary Xi Jinping has attached great importance to food security and proposed a new concept of food security to ensure basic self-sufficiency in grain production and absolute security of food rations. To ensure a basic balance between food supply and demand, there are still some feed grains that need to be solved through the international market. China imports about 150 million tons of grain every year, of which nearly 100 million tons are soybeans. In addition to oil extraction, the most important use of soybeans is as a raw material for protein feed. 10% to 15% of the protein content in the feed we need for aquaculture needs to be solved through imports.
There are also grain imports, some of which are wheat. Mainly from the perspective of variety adjustment, for example, importing soft wheat from Australia and strong gluten wheat from Canada are both raw materials needed for making pastries, while domestically produced mainly medium gluten wheat, so about 10 million tons of wheat are imported every year. Some rice imports are also regulated within the scope of import quota management, so the annual import scale is not large.
From the perspective of the national food security guarantee system, we have basically established a "three in one" guarantee mechanism. One is the comprehensive production capacity of grain, with ensuring basic self-sufficiency in grains and absolute food security as the core. two thousand and twenty-four
The total grain output in China has reached 700 million tons annually, with the main contributions being the three major varieties of wheat, rice, and corn. Currently, the overall production and sales balance is maintained, with a self-sufficiency rate of over 99%. Corn has an annual output of 280 million tons, which can basically meet the demand for feed grains. In addition, legumes and potatoes maintain a level of 50 million to 55 million tons, all of which are achieved through the domestic grain production system, which is the foundation for ensuring food security. The second is the grain reserve regulation system, which includes both central and local reserves, with a focus on responding to emergencies and maintaining market stability. This system has gone through the test of history, including the ice and snow disaster in southern China in 2008, the Wenchuan earthquake, and the impact of the global food crisis and the COVID-19 in recent years. This reserve control system has successfully responded to food security risk challenges. The third is the global agricultural supply chain, effectively utilizing international agricultural markets and agricultural resources. The effective utilization of the international market has made up for the shortage of domestic agricultural resources. In 2023, the total import value of agricultural products in China will be over 234 billion US dollars. If these agricultural products are produced domestically, it may require nearly 1.4 billion acres of planting area. At present, there are 1.929 billion mu of arable land in China. According to the multiple cropping index of 1.33, the overall planting area is about 2.57 billion mu, which is used to ensure the production of 700 million tons of grain, vegetables, fruits and other agricultural products. Therefore, the shortfall will be solved through imports.
The comprehensive production capacity of domestic grain, the regulation system of grain reserves and the global supply chain of agricultural products constitute a "trinity" food security mechanism to ensure that everyone can have a full meal and eat well, and ensure that the Chinese people's jobs are firmly in their own hands.
Host: China's grain production has remained at a high level for many years, and a new round of action plan to increase grain production capacity by 100 billion kilograms will be introduced in 2024. Against this backdrop, why is there still a gap in grain supply and demand?
Cheng Guoqiang: China is basically self-sufficient in wheat, rice, and corn, and the food supply is absolutely safe. So where is this gap? Soybeans. That's why nearly 100 million tons of soybeans are imported through the international market every year, because there isn't as much arable land to grow protein feed raw materials. For example, soybeans and corn are competitive crops, and if corn is basically self-sufficient, there is no way to ensure the supply of soybeans.
From the perspective of national food security situation, we are currently in the best period in history, but we cannot avoid the structural shortcomings in the agricultural supply system. Based on the basic national situation of a large population and limited land, we cannot achieve self-sufficiency in some products and can only solve it through the international market. So, we need to promote the opening up of agriculture to the outside world and effectively utilize the international agricultural product market and agricultural resources.
Host: What is the reason for the year-on-year decrease in grain imports in 2024 compared to the past? Does this mean that China's food supply system is undergoing changes?
Cheng Guoqiang: It should be said that there have been some changes in the supply system, but not significant. The three major staple foods can achieve basic self-sufficiency, and by implementing the strategy of storing grain in the ground, absolute food security can be ensured. However, the shortcomings of soybeans still exist in the supply system. We have implemented the soybean action plan, which includes piloting crop rotation in Northeast China, stabilizing grain and expanding oil production in the South, and expanding the planting area of oil crops. This has led to a recovery in soybean production, with a yield of over 20 million tons in recent years. However, the overall demand is 110 million tons, so the supply-demand pattern has not fundamentally changed.
The decrease in imports is due to excessive imports in previous years, not a decrease in demand or an increase in domestic supply. The current global grain prices are declining, and China's grain prices are sluggish. It is difficult for farmers to earn money from growing grain, and the impact of importing some products on the domestic market is worth paying attention to. If the annual import of grain can be controlled within 150 million tons, the impact on the domestic market will be slightly smaller, but the import of meat and soybeans cannot be avoided.
Guarding farmland is the lifeblood of food production
Host: When it comes to the issue of food, there is a word that is repeatedly mentioned, which is the 'red line of arable land'. What are the considerations behind the current delineation of the red line for 1.8 billion acres of arable land?
Cheng Guoqiang: The red line of 1.8 billion mu of arable land was first proposed in 2006. Based on the judgment of the trend of grain supply and demand, combined with factors such as population growth trend and food consumption structure, it was estimated that about 600 million tons of grain production were needed to ensure basic supply, corresponding to 1.8 billion mu of arable land. Considering the multiple cropping index of 1.33, the corresponding annual crop planting area is 2.4 billion mu. According to the calculation of grain yield per unit area, it can reach exactly 600 million tons. So, according to the technological level and grain yield level at that time, the cultivated land cannot be less than 1.8 billion mu. With the acceleration of industrialization and urbanization, the development of the economy in various regions requires a large amount of land, and the phenomenon of occupying arable land is common, resulting in an annual reduction of about 10 million acres of arable land. According to this trend, the red line of 1.8 billion acres of arable land will soon be crossed. The Central Committee of the Communist Party of China has repeatedly emphasized the need to uphold the red line of 1.8 billion mu of arable land, implement the joint responsibility of the Party and the government for protecting arable land, and ensure the area of grain cultivation.
Host: With the transfer of land and the influx of industrial and commercial capital to rural areas, the problem of "non agriculturalization" and "non grainization" of arable land has become prominent. What do you think of this phenomenon?
Cheng Guoqiang: As a country enters the middle stage of industrialization, with the advancement of industrialization and urbanization, the demand for land inevitably increases. At the same time, with the deepening of population aging and the transfer of migrant workers to non-agricultural sectors, there have been significant changes in agriculture. A large amount of industrial and commercial capital and new business entities have begun to enter the agricultural field. Based on their own needs, it may not be enough to only focus on agriculture to ensure investment does not incur losses, which has brought about some "non agriculturalization" and "non grainization" problems.
There are three main factors. One reason is due to population growth, coupled with the continuous promotion of industrialization and urbanization, there is a rigid demand for land. The second is that agriculture has low comparative efficiency, and the operating entities need to recover costs and obtain profits through "non agriculturalization". Thirdly, with the transfer of migrant workers to employment, there may be a problem of "non grainization" of arable land in the process of rural land transfer.
Host: How difficult is it to govern the "non agriculturalization" and "non grainization" of arable land?
Cheng Guoqiang: In recent years, the central and local governments have taken many measures to control the "non agriculturalization" and "non grainization" of cultivated land, achieving significant results. But this is a very complex issue. Firstly, the weakening of economic interests and the low comparative benefits of agricultural management and grain cultivation are the fundamental reasons for the "non grainization" of arable land. Secondly, after planting economic crops on some "non grain" cultivated land, it is difficult and costly to rectify, and some places adopt a "one size fits all" approach, which has led to many problems worth reflecting on. Again, there are shortcomings and deficiencies in collaborative supervision, and a systematic and effective regulatory mechanism has not been formed.
Strengthening the rectification requires strict management of the balance between farmland occupation and compensation, and the implementation of relevant land system reform requirements. In terms of institutional construction, it is necessary to strengthen the construction of farmland protection system, fully implement the responsibility of regulatory entities, and implement the joint responsibility of the party and government for farmland protection. One important reason for the "non grainization" is the low efficiency of grain cultivation. Comprehensive measures should be taken to enable farmers to earn and benefit from grain cultivation. To fully tap into the potential of technology, whether it is strengthening land consolidation or increasing grain production income, ultimately relying on technology to save costs and increase efficiency, by increasing yield per unit and reducing costs to ensure farmers' grain production income, fundamentally curbing the impulse of "non graining" farmland.
Host: You mentioned "strict management of land occupation and compensation balance", how to balance it specifically?
Cheng Guoqiang: In the process of industrialization and urbanization, it is necessary to supplement the amount of arable land occupied, which is called the balance between occupation and compensation. There have been some deviations in the past, such as occupying good land and filling in bad land, which is called "tanuki for prince". The Central Economic Work Conference proposed "strict management of balanced occupation and compensation of arable land", which should be said to have higher requirements and stricter measures. By increasing the cost of land occupation and reducing the demand for land occupation, efforts should be made to occupy less or no land, and to occupy as little land as possible.
How to operate it specifically? One is to clarify the principle of balancing the occupation and compensation of arable land, adhere to the principle of "compensation determines occupation", pay equal attention to both quantity and quality, and cannot occupy good land and compensate for poor land as in the past. This is a principle issue. The second is to further expand and supplement the sources of arable land, especially to carry out the management of degraded arable land and promote the development of reserve resources of arable land. The third is to strengthen the protection and supervision of arable land, strictly implement the arable land protection system, enhance the assessment of the responsibility for balancing arable land occupation and compensation, and strengthen law enforcement efforts. The fourth is to improve the quality of arable land, promote the construction of high standard farmland, and implement actions to protect and improve arable land quality. The fifth is to improve the implementation mechanism of balancing occupation and compensation, improve the implementation methods of balancing occupation and compensation, clarify the responsibilities and obligations of governments at all levels, and ensure operability and execution.
Host: After establishing the red line of 1.8 billion mu of arable land, what adjustments have been made to China's agricultural resource development model?
Cheng Guoqiang: There are three main aspects of agricultural resource development. One is to comprehensively utilize abandoned land, including uncultivated land during the transfer process, and strengthen its utilization through comprehensive management. The second is to reform the system of balancing the occupation and compensation of arable land, including non-agricultural construction, afforestation, tree planting, fruit planting and other activities that occupy arable land. By implementing the "large-scale occupation and compensation" policy, the total amount of arable land in the province can be dynamically balanced. The third is to expand the space for agricultural production, establish a big agricultural and resource concept, develop agricultural resources for the entire land and resources, comprehensively utilize and transform saline alkali land, and innovate development models.
Agricultural technology innovation needs to fill in the gaps and weaknesses
Host: The 2024 Central Rural Work Conference mentioned "strengthening agricultural technology and equipment support". What is the level of agricultural technology innovation in China?
Cheng Guoqiang: From a global perspective, China's level of agricultural scientific and technological innovation has entered the forefront, making significant progress and breakthroughs. The contribution rate of national agricultural scientific and technological progress has reached 63.2%, an increase of nearly 9 percentage points from 54.5% in 2012. The coverage rate of high-quality crop varieties has reached 96% in recent years, contributing 45% to the increase in grain production. In terms of seed industry innovation, there are innovative varieties of wheat, corn, etc., especially the rapid development of corn bio breeding industrialization. The level of agricultural machinery and equipment has been improved, and the comprehensive mechanization rate of crop cultivation and harvesting in China has exceeded 73%. Wheat has basically achieved full mechanization, and the mechanization rate of corn and rice cultivation and harvesting is over 80%. In addition, the mechanization level has also been greatly improved in areas such as major economic crops, facility agriculture, and initial processing of agricultural products. The transformation of agricultural production from mainly relying on human and animal power to relying on mechanical power has played a very important role in improving labor productivity, land output, and resource utilization.
Host: According to data, there are 6000 to 7000 agricultural scientific and technological achievements released in China every year, but the conversion rate of these achievements is only 30% to 40%. In other words, the conversion rate of agricultural scientific and technological achievements is relatively low. What do you think?
Cheng Guoqiang: Indeed, while agricultural technology innovation has achieved important achievements, there are still many shortcomings and weaknesses, and the problem you mentioned is very prominent.
Firstly, there is a mismatch between scientific research achievements and industry demands. The evaluation indicators of agricultural scientific and technological innovation in universities and research institutes focus too much on theoretical journals and the quantity of academic achievements. Many achievements are not aimed at meeting industrial and practical needs, but more at publishing papers. How to change this baton is an important issue in the reform of the scientific and technological system. In addition, many scientific research lacks market orientation, and some achievements have high innovation value and technological content. However, there is still a lack of necessary transformation mechanisms for how to generate economic benefits through industrial applications, and the integrated chain of industry, academia, research and application has not been established.
Secondly, there is a lack of entities with conversion capabilities. China's agricultural enterprises are relatively small in scale and have weak profitability, lacking planning and willingness for strategic and long-term investments. Of course, the transformation of agricultural scientific and technological achievements does have a long cycle and high risks, which makes many enterprises hesitant. So, it is necessary to attract social capital and financial institutions to enter. Currently, the innovation of technology finance mechanisms is relatively lagging behind.
Again, the promotion system is not perfect enough. The most in need of technology is at the grassroots level, and the technical strength at the grassroots level is relatively weak. At present, the promotion of agricultural science and technology mainly relies on government leadership. Without market-oriented operation, it is difficult to meet diverse needs. How to handle the relationship between the government and the market is a major issue that needs to be overcome in improving the scientific and technological innovation system, promotion system, and transformation system.
Ensure that farmers increase their grain production and income
Host: Another spring plowing season has arrived, and there is a question that everyone is quite concerned about, which is "who will plant the grain"? Why repeatedly emphasize the establishment of a sound mechanism for ensuring the income of grain farmers?
Cheng Guoqiang: With the aging of rural population and the large-scale transfer of agricultural population into cities, the question of "who will grow grain" has always been a major issue. This is also why it is repeatedly emphasized to promote innovation in agricultural management systems and mechanisms, and cultivate new types of agricultural management entities.
From the perspective of grain cultivation, as agriculture is an industry that intertwines natural reproduction and economic reproduction, it faces market risks and cannot guarantee whether the grown grain can be sold at a good price. At the same time, it is greatly affected by natural risks, making it difficult and stressful for grain farmers. Repeatedly emphasizing the need to establish a sound mechanism for ensuring the income of grain farmers is to enable them to grow grain without losing money and earn money, so as to effectively enhance and protect their enthusiasm for growing grain.
The current problem is that it is indeed difficult to make money from growing crops. Firstly, the cost of growing crops continues to rise. Compared to 2004, the cost of grain production has increased by about 1.4 times, but the per mu output value has increased by less than 1 times, and the rate of cost increase is much faster than the price increase. Secondly, existing policies have played an important role in protecting farmers' enthusiasm for growing crops, but there is still significant room for improvement. For example, farmers with land can receive agricultural subsidies through the "one card" system, rather than subsidies based on the actual situation of grain cultivation, resulting in low effectiveness of subsidy policies; In terms of insurance policies, the main ones are full cost insurance and planting income insurance, and there is still a lot of room for improvement in the operational mechanism. Again, it is still necessary to explore income increasing mechanisms that are suitable for China's national conditions. How can farmers increase the value of their grain after planting it? The exploration of some new agricultural management entities is worth learning from. We found through our research in Jiangxi that in addition to the production process, new agricultural operators also extend the grain industry chain through drying, storage, logistics, and processing. Although they also help farmers manage their land, they are not worried about losses because after the grain is harvested, it can be significantly increased in value through processing and sales, thereby compensating for upstream losses. So, to establish a sound mechanism for ensuring the income of grain farmers, in addition to strengthening policy guarantees, it is also necessary to build a complete grain industry chain to truly increase farmers' income from grain cultivation.
Constructing a benefit compensation mechanism through the combination of vertical and horizontal integration
Host: How is the layout of grain production in China determined?
Cheng Guoqiang: Based on China's agricultural resource conditions, grain production has formed several major regions. One is the main grain producing area, with a total of 13 main producing areas in China. In the past, grain production was relatively balanced, and now nearly 80% of grain is produced in the main producing areas. One is the production and sales balance zone, where grain is neither exported nor imported, resulting in a relative balance between production and sales. Another is the main grain sales area, where there is a gap between grain production and demand. From the current layout of grain production, it is gradually concentrating in the main grain producing areas. The problem brought about by this is that if balanced grain production cannot be achieved, it means that the pressure and burden on the main grain producing areas will become increasingly heavy. The trend of "high-yield poor counties" and "grain rich counties, economically weak counties" in the past will become more and more significant, which will further affect local economic development.
The production capacity of the production and sales balance zone and the main sales zone is gradually declining, which is not conducive to the national food security guarantee. Therefore, we must adhere to the shared responsibility of the Party and the government for food security. While supporting the main production areas to ensure good food production, we also require the balanced production and sales areas and the main sales areas to ensure food security and production.
Host: The main grain producing areas provide over 70% of the country's grain, but their economic development generally lags behind the main sales areas. What are the main reasons?
Cheng Guoqiang: Overall, the main production areas have made significant contributions to ensuring national food security, but have also produced some spillover effects. On the one hand, according to the national main functional zone plan, the main grain producing areas, as the main functional zones for providing agricultural products, belong to restricted development areas, strictly restrict large-scale industrial production and urbanization construction, and strictly prohibit illegal occupation of arable land for non-agricultural construction, which objectively limits the expansion of urbanization. On the other hand, due to the low efficiency of grain cultivation, a significant opportunity cost for economic development has been incurred. Moreover, due to the requirements for grain production and the need for corresponding funding support for high standard farmland construction, major production areas need to use financial resources to promote agricultural infrastructure construction, and other development opportunities are limited. Non major production areas can have more opportunities to develop secondary and tertiary industries, with developed economies and abundant finances, and the gap between major production areas and them will further widen.
Host: In this situation, how can we effectively mobilize the enthusiasm of key farmers in major grain producing areas to focus on grain production?
Cheng Guoqiang: The central government has taken many measures, such as implementing a vertical compensation mechanism mainly based on fiscal transfer payments for grain producing counties, which has played an important role in protecting and improving the enthusiasm of heavy farmers in the main production areas to focus on grain production. However, with the development of the economy, relying solely on vertical compensation cannot meet demand, and it is necessary to mobilize the enthusiasm of non main production areas. Therefore, it is proposed to establish an inter provincial horizontal benefit compensation mechanism, which means that the main sales areas should provide necessary benefit compensation to the main production areas.
The 2024 Central Rural Work Conference proposed to initiate the implementation of inter provincial horizontal interest compensation for grain production and sales areas under central coordination. That is to say, in addition to the vertical interest compensation mechanism, the horizontal interest compensation mechanism should also be established as soon as possible. In this process, several key points should be grasped: how to determine the subsidy amount, and how much money the main sales area should use to compensate the main production area; What kind of compensation should be adopted; What is the scale of funding demand in the main production areas that needs to be compensated horizontally, and what are the compensation standards; wait. In the process of policy implementation, it is necessary to do a good job in top-level design, especially in solving these key issues in practical operation.
