China's next crisis: food crisis

From 2002 to 2015, China's grain imports increased by 780%! Today, China's feet have inevitably set foot on the territory of relying on overseas grain imports.

As a result of urban expansion, the area of arable land in China has begun to decrease. More and more imported grain is pouring into China, raising concerns about food security in the industry.

When farmers go to work in cities, they bear the high cost of living in cities, but they do not enjoy the benefits that citizens should have. According to a survey conducted by the Development Research Center of the State Council, a rural resident who comes to work and live in a city will consume 20% more grain directly and indirectly every day. One positive and one negative, aggravating the imbalance between grain supply and demand.

Since the 2008 financial crisis, the downward trend of the global economy has made the prices of commodities such as oil and iron ore continue to fall, even halving. But among the many commodities, food is an anomaly.

Since 2000, food prices have begun to rise slowly, rising by 50% in 15 years. Food prices reached two peaks before the financial crisis in 2008 and in 2010, while food prices have fallen since 2011 and have risen again since 2016.

The World Bank predicts that global demand for food will grow by more than 50 per cent by 2030, while 1.4 billion people in 36 countries will be in a crisis of lack of food by 2025 (China still has about 130 million hungry). The World Economic Cooperation Organization-FAO pointed out that the high price of agricultural products in the next 10 years will become a very obvious feature of the market, and the prices of agricultural products and aquatic products will reach an all-time high.

The relationship between Grain supply and demand in China

Although China's total grain output has achieved "12 consecutive increases" from 2003 to 2015, at the same time, with the growth of China's population and the increase in consumer demand, there is a gap between China's total grain output and total demand, which was 3.52 million tons higher than output in 2010. by 2015, the gap had reached 20 million tons.

Insufficient production has also led to a sharp increase in China's grain imports, exceeding 100m tons for the first time in 2002. From 2014 to 2015, China's grain imports increased by 780 per cent!

Experts predict that China's grain output will rise to 554 million tons by 2020, but the grain demand will be about 700 million tons, with a shortfall of nearly 200 million tons.

At the same time, food prices in China are also on the rise, with wheat and rice rising 59% and 69% respectively since 2009. The rise in food prices has further pushed up food prices.

More and more imported grain is pouring into China, raising concerns about food security in the industry. China ranks 42nd in the latest report on World Food Security Index 2016 released by the Economist, and Western countries occupy the first echelon of the global food security index. China is well ahead of China, including Japan (18th) and South Korea (24th), which are heavily dependent on grain imports. Today, China's feet have inevitably set foot on the territory of overseas grain imports.

Urbanization accelerates food crisis

Since the reform and opening up, the process of urbanization in China began to accelerate. From 1978 to 2015, China's urbanized population increased from 172 million to 770 million, with an urbanization rate of 56.1%. In contrast, the rural population has been reduced to 600 million. From 1978 to 2000, the number of cities in China increased from 193to 663, the number of established towns increased from 2173 to 20312, and by 2015 there were 15 major cities with a population of more than 10 million.

As a result of urban expansion, the area of arable land in China has begun to decrease. China's grain imports began to grow sharply in 2003, and this year, China's real estate market began to be hot. Is it a coincidence or is there a myriad of relationships behind it?

The area of cultivated land has dropped sharply.

According to the China Statistical Yearbook of Urban Construction (2014), the area of urban construction land in China increased from 6720 square kilometers in 1981 to 49900 square kilometers in 2014, an increase of 6.44 times, with an average annual growth rate of 6.27%. Showing a marked expansion. Among them, the average annual net growth since 2000 is as high as 1940 square kilometers.

At the same time, the per capita land for urban construction remains high. According to the data, the per capita construction area of Chinese cities in 2014 was 129.57 square meters, much higher than the national standard of 85.1 to 105square meters per person, and also significantly higher than the level of 84.4square meters per capita in developed countries and 83.3square meters in other developing countries. Correspondingly, the area of cultivated land and per capita cultivated land in China are declining rapidly.

The area of cultivated land in China has been decreasing gradually since 1991, with an average annual reduction of 4.33 million mu to 130 million hectares in 2013, accounting for 11% of the land area. The area of cultivated land per capita has been reduced to 0.08 hectares, that is, 1.2 mu per capita. For a country with less arable land per capita than that of the United States and Russia, this decline is even more alarming.

Real estate overheating is the inducement.

In particular, the frenzied development of real estate has led to the occupation of a large amount of arable land.

From 2006 to 2010, the land for real estate development has increased from about 60, 000 hectares to about 150000 hectares. it can be seen that the real estate market is hot at this time, and the area of arable land is also increasing. According to data released by the Ministry of Land and Resources, the amount of arable land occupied by the state and provinces approved by the state and provinces is about 200000 hectares each year, falling to 160000 hectares in 2015.

Arable land is occupied, houses occupy more land, and less land is used to grow grain, resulting in a decrease in food supply, an increase in grain imports and a rise in food prices.

Under the trend of a sharp decline in the area of cultivated land and per capita cultivated land in China, more and more land is uncultivated, and the phenomenon of "abandonment" is becoming more and more common in rural areas. According to a survey conducted by the Ministry of Land and Resources, nearly 30 million mu of arable land is abandoned in China every year, which is tantamount to a knife in the back for China's food security.

The phenomenon of abandonment still starts from urbanization.

With the improvement of China's urbanization rate, a large number of farmers have moved to cities to become "citizens", and the number of young and middle-aged rural workers going out to work or do business has been soaring.