Strengthen Grain Production Capacity and Build a Solid Barrier for National Food Security

Our country is a large developing country with a population of more than 1 billion, and the grain issue has always been the top priority in the national economy and people's livelihood. Since 2004, China's grain output has increased for eleven consecutive years, and the comprehensive production capacity has reached a new level of 600 million tonnes, making a huge contribution to safeguarding the overall situation of reform and opening up and economic development. But in recent years, under the influence of consumption-driven demand and the inversion of domestic and international grain prices, China has seen a new situation in which grain output rises, inventories increase, and imports also increase at the same time, while at the same time facing new challenges such as the “ceiling” cap on agricultural product prices, the rising “floor” of production costs, and the intensifying “hard constraints” of resources and the environment, so that the space for grain production development is squeezed by multiple factors. Whether China's grain production can continue to maintain its momentum of steady growth in the future is directly related to whether the country's modernization can proceed steadily. Recently, the General Office of the State Council issued the “Opinions on Accelerating the Transformation of Agricultural Development Mode”, which clearly proposed adhering to the enhancement of grain production capacity as the primary prerequisite, firmly holding the red line of cultivated land, ensuring that the area does not decrease, the quality does not decline, and the use does not change, steadily improving grain production capacity, ensuring that the rice bowl is always firmly held in our own hands at all times, consolidating the foundation for transforming the agricultural development mode, and making the enhancement of grain production capacity and the improvement of the level of food security guarantee the primary task of transforming the agricultural development mode. This needs to be understood from both aspects of China's grain demand and supply.

From the perspective of grain demand, according to its use it can be divided into grain for rations, feed grain, industrial grain, and seed grain; according to its variety attributes it can be divided into cereals, beans, and tubers. According to analysis and calculation by the Food Policy Innovation Team of the Chinese Academy of Agricultural Sciences, by 2020, a per capita grain consumption of 500 kg in China will be indispensable.

First, the total population and its nutritional needs are the basis of grain consumption; economic growth and rising incomes prompt people to improve their lives, reducing rations and increasing the consumption of animal-based foods. Since the 1990s, China's natural population growth rate has continued to decline; if calculated at a natural population growth rate of 5 per thousand in the future, it is predicted that by 2020 China's total population will increase to 1.409 billion people. If in the next 10 years China's economic growth rate remains at around 7%, by 2020 China's per capita GDP will reach 11,000 US dollars; combining this with the recommended intake of calories, protein, and other nutrients proposed in the “Dietary Guidelines for Chinese Residents 2011”, and referring to the food structure of Japan, Taiwan, China, and other places during this development period, it is predicted that by 2020 China's per capita consumption of meat, milk, aquatic products, and eggs will increase to 75.5 kg, 40 kg, 44 kg, and 21 kg respectively, equivalent to a per capita feed grain amount of 298 kg. According to the “China Household Survey Yearbook”, in 2013 China's per capita ration consumption was 148.7 kg; according to the energy substitution attribute, the newly added per capita animal food consumption can also save 8.7 kg of ration consumption, at which time China's per capita ration consumption will fall to 140 kg; the per capita total of rations and feed grain will be 438 kg, and per capita feed grain will be 2.1 times per capita rations.

Second, indirect grain consumption should also take industrial grain into account. In recent years, China's industrial grain use has been stable at around 100 million tonnes. Under the new normal of economic growth, if China's industrial grain use remains at the current level, it is expected that by 2020 China's per capita industrial grain use will be around 70 kg.

Third, because imported grain does not need to take seed grain into account, adding together the above predicted values of per capita rations, feed grain, and industrial grain, it is estimated that by 2020 China's per capita grain demand will be 508 kg, and total grain demand will be 716 million tonnes. If in the future China imports 100 million tonnes of grain (including soybeans), domestic grain production capacity will need to reach 616 million tonnes; at this time, including the seed grain needed for domestic grain production, calculated at an average of 4.6% of domestic total grain output over the past 10 years, it is thereby deduced that by 2020 China's total grain production capacity will need to reach 641 million tonnes (per capita grain output of 454.9 kg).

Compared with China's total grain output of 607 million tonnes in 2014 (per capita grain output of 443.8 kg), in the next 6 years China's total grain output will need to achieve an average annual increase of 5.67 million tonnes; compared with the average annual increase of 13.68 million tonnes over the past 10 years, the growth rate of grain production will slow somewhat in the future.

It is worth mentioning that as early as 1986, the Chinese Academy of Agricultural Sciences conducted in-depth research on China's grain production targets, put forward the important judgment that “a per capita grain amount of 400 kg is indispensable”, and held that when a country's “per capita grain availability is below 300 kg, it can basically not provide feed grain”; moreover, from the world situation, after solving food and clothing problems there is inevitably a further requirement to increase food consumption and raise nutritional levels, and “for the food consumption structure to be fundamentally improved, per capita grain availability must reach more than 700 kg; for the food consumption structure to be improved to a relatively large extent, per capita grain availability must reach at least 500 kg”. In other words, the main markers of a country's nutritional deficiency, having more than enough for food and clothing, and relatively large improvement in food consumption are per capita grain availability reaching the thresholds of 300 kg, 400 kg, and 500 kg respectively. In fact, China's current per capita grain availability is approaching the threshold of 500 kg. According to statistics, in 2014 China's per capita grain output had reached 443.8 kg, and per capita grain consumption exceeded 470 kg. In addition, if considering the grain consumption of more than 60 million person-times of inbound tourists and business activities in China and the more than 100 million pets raised by urban and rural residents, in fact China's total grain consumption demand is even higher than the above estimate.

From the perspective of grain supply, it has truly not been easy for China's grain to maintain an increasing trend for many consecutive years.

First, of China's grain “eleven consecutive increases” achieved so far, only 6 years represented substantive growth. After China's total grain output fell to its lowest point in 2003 (430.70 million tonnes), the state issued a series of policies to support, benefit, and strengthen agriculture, and only then did grain output show a good momentum of continuous growth; it was not until 2008 that the national total grain output (528.71 million tonnes) exceeded the 1998 output level (512.30 million tonnes), and it has now stabilized at a level above 600 million tonnes. Objectively analyzed, the first 5 years of the grain “eleven consecutive increases” belonged to recovery growth in grain production; the latter 6 years belonged to substantive growth brought about by the combined effects of policies, science and technology, inputs, and many other factors.

Second, the increase in China's total grain output was achieved through higher yields per unit area and the expansion of the sown area of grain crops. According to statistics, in 2014 China's grain sown area reached 112.723 million hectares, a net increase of 13.313 million hectares over 2003; the proportion of grain sown area in the total sown area of crops rose from 65.2% in 2003 to 68.1% in 2014, while the sown areas of oilseed crops and cotton decreased correspondingly, with their proportions in the total sown area of crops falling by 1.3% and 0.8% respectively. Of the increment in total grain output, the contribution share of expanded sown area was 32.7%, and the contribution share of yield per unit area was 67.3%.

Third, due to the upgrading of the consumption structure and changes in market grain prices, China's grain imports increased simultaneously. According to China's traditional grain definition and statistical scope, in 2014 total grain imports reached 100 million tonnes, of which soybean imports were 71.40 million tonnes and cereal imports were 19.52 million tonnes; if 5.41 million tonnes of corn distillers' grains are included in the grain category as corn products, grain imports would be as high as 106 million tonnes. This shows that even though China's grain output increased year after year, the “tight balance” in grain supply and demand has not undergone a fundamental change, and grain demand is growing rigidly, which is directly related to the rapid increase in Chinese residents' consumption of meat, eggs, and milk and the sharp growth in feed grain. According to statistics, from 2003 to 2014 China's meat output grew from 64.433 million tonnes to 87.067 million tonnes, an average annual increase of 2.8%; feed grain has already replaced ration grain as the largest demand for grain.

In addition, along with grain output increases and imports, in recent years the scale of China's grain reserves has continued to expand. According to reports, in 2014 the grain purchases of various grain enterprises in China exceeded 700 billion jin for the first time, with a total of 729.8 billion jin, an increase of 40.9 billion jin over the previous year, of which grain purchased at the minimum purchase price and temporarily stored was 247.8 billion jin, an increase of 81.4 billion jin over the previous year. At present, China's grain inventory-to-consumption ratio is far higher than the internationally recognized food security line level of around 18%. In recent years, the degree of commercialization of grain in China has risen rapidly, market supply is abundant, logistics has accelerated, online shopping is convenient, and urban and rural households have greatly reduced grain storage, buying as they eat. Moreover, in order to increase grain-growing income, the state supports the market through purchasing, which on the one hand concentrates grain production and inventory distribution in core production areas, greatly increasing the storage pressure in main production areas and increasing the fiscal burden as policy-related grain inventories expand, and on the other hand keeps domestic grain prices high, while the reduced grain storage of local reserves, social enterprises, and urban and rural households has successively shifted to central reserves. Maintaining such a large-scale national reserve grain supply has become a new situation in China's safeguarding of urban and rural residents' daily grain consumption.

In summary, from a long-term perspective, on the issue of grain supply, China can only and must adhere for a long time to the guiding principle of relying mainly on domestic production and using appropriate international market adjustment as a supplement. While maintaining moderate grain imports, by 2020 the domestic per capita grain consumption should be maintained at more than 500 kg, total grain output should increase to more than 641 million tonnes, and the grain self-sufficiency rate should be above 90%, only then can demand be met, and a huge scale of national reserve grain must also be maintained. This is the proper meaning of the new-era national food security strategy of “taking ourselves as the mainstay, basing ourselves on domestic production, ensuring production capacity, moderate imports, and scientific and technological support”.

What is worth remaining vigilant about is that China's consecutive years of grain output increases have also accumulated many problems such as excessive input of factors of production and environmental deterioration, and there has also been more discussion and practice in society of relaxing grain production. For example, some believe that the current international supply and demand of agricultural products is relatively loose, that domestic grain production should be reduced, and that large imports of grain and other agricultural products should be encouraged; this understanding is one-sided and harmful. In fact, in the food classification of the Food and Agriculture Organization of the United Nations (FAO), cereals are only rice, wheat, corn, sorghum, and other miscellaneous grains, all of which are people's basic food sources, while soybeans are an oilseed crop and are not treated as food grain. This is the main reason why China's large imports of soybeans have not caused tension among grain-deficient countries. At present, there are still more than 800 million hungry people in the world lacking food; the international trade volumes of cereals and corn are about 270 million tonnes and 100 million tonnes respectively, only 49% and 47% of China's total cereal and corn output, and the incremental grain trade volume available to China on the international market is limited. China has the world's largest population food demand, and a slight change in grain import volume may trigger fluctuations in international grain prices. In the future, China's rural areas will still have hundreds of millions of people, and developing grain production remains an important channel for solving rural employment and increasing farmers' incomes.

From the perspective of planting structure adjustment, in recent years double-cropping rice in southern China has been changed to single-cropping, and the rice area has continuously decreased, while in North China the wheat sown area has decreased because of the treatment of groundwater funnels. Large growers, family farms, and others that have emerged in some places transfer contracted land to expand operating scale, causing production costs to rise and reducing the grain-growing area or even giving up grain growing. Planting area is the foundation for ensuring grain output, and capacity building is the core of ensuring food security. Under market orientation, if the policy direction of agricultural mode transformation does not take stabilizing the grain area as the premise and enhancing grain production capacity as the requirement, China's grain output is bound to shrink; after the reform and opening up, China experienced supply-demand imbalance caused by reducing grain after two agricultural bumper harvests, and there is already a warning from the past. Under the influence of multiple unfavorable factors such as unstable planting area, declining inputs, and the impact of low international grain prices, we must directly face the new challenges and new problems in the future development of grain production and adopt more effective measures to solve them.

First, we must steadily improve grain production capacity and earnestly strengthen cultivated land protection. To increase China's total grain output in the future, we must effectively protect grain cultivated land and grain sown area, build up soil fertility, improve technology, and raise yields per unit area. According to estimates, from 2003 to 2014, China's grain yield per unit area rose from 288.8 kg per mu to 359 kg, an average annual increase of 6.4 kg per mu. If the growth rate of yield per unit area remains unchanged in the next 6 years, by 2020 grain yield per unit area should reach 397.4 kg in order to achieve the goal of 641 million tonnes of total grain output, but it will still be necessary to maintain a grain sown area of 107.532 million hectares (1.613 billion mu); considering the multiple cropping factor for grain, grain cultivated land must be maintained at more than 1.2 billion mu. This requires holding the red line of cultivated land and the bottom line of a grain sown area of more than 1.6 billion mu, implementing the strictest cultivated land protection system, accelerating the designation of permanent basic farmland, and ensuring that there is land to grow grain. Under the process of industrialization and urbanization, the occupation and transfer of cultivated land are accelerating; to achieve the balance of occupied and supplemented cultivated land, it is also necessary to ensure that the area does not decrease, the quality does not decline, and the use does not change, to study and formulate as soon as possible a national standard for cultivated land quality grades, improve the compensation mechanism for cultivated land protection, and implement actions for the protection and improvement of cultivated land quality.

Second, we must enhance grain output capacity and accelerate the construction of high-standard farmland. What is high-standard farmland? High-standard farmland is land with good soil performance that can be irrigated and drained, into which agricultural machinery can enter and from which it can exit, and whose plot scale and construction requirements can adapt to mechanized and specialized operations. Comprehensive research shows that by 2020 China should have built 800 million mu of high-standard farmland, including two major types, high-yield fields and medium-yield fields, whose output targets should reach about 500 kg and 450 kg per mu respectively; in arid, semi-arid, and humid regions, different output tiers and their investment standards and construction requirements should also be set; in terms of plot scale, the smallest plot in the south should be no less than 10 mu and in the north no less than 30 mu. The guaranteed irrigation rate of farmland should be above 90%. In terms of work promotion, local agricultural departments should take the lead, integrate relevant funding inputs, and concentrate efforts on land leveling, farmland water conservancy, soil improvement, machine farming roads, and supporting agricultural power grids and forest networks. Through the transformation of low- and medium-yield fields, improve agricultural production conditions and enhance agricultural output capacity and the ability to resist natural disasters. It can be said that high-standard farmland is the most precious and largest excellent asset in China's agriculture and rural areas, and it is the foundation for ensuring that the Chinese people have no worries about food and clothing.

Third, we must strengthen grain production and supply and solidly advance the construction of grain production bases. Grain production bases are the regions with the strongest grain production capacity and the most concentrated output in China; these places can not only satisfy grain self-sufficiency within the region, but can also transfer out large amounts of commercial grain for sale each year, and they hold a pivotal position and role in China's grain production. According to estimates, in 2013 the proportion of national main grain-producing areas in the country's total grain output rose from 71% to 76%, and the grain output increase share of the main production areas accounted for 88.7% of the country's total grain output increase. Therefore, it is necessary to further give play to the comparative advantages of main grain-producing areas, combine this with the designation of permanent basic farmland, explore the establishment of grain production functional zones, and give priority to building a batch of high-quality and efficient grain production bases in the main rice and wheat production areas such as Northeast China, the Huang-Huai-Hai region, and the middle and lower reaches of the Yangtze River, implementing the capacity for ration production down to specific fields and plots, and applying high quality with high price. Through high-yield grain creation activities, promote green yield-increasing models and achieve large-area balanced yield increases. Guide farmers to innovate and start businesses and share in the value-added returns from storage, transportation, processing, and marketing in the entire grain industry chain. Improve the interest compensation mechanism for main grain-producing areas; national policies and measures supporting grain production and project inputs should be tilted toward main production areas so that farmers do not lose out by growing grain; increase rewards and subsidies to main grain-producing areas through fiscal transfers, ensuring that their per capita fiscal capacity gradually reaches the national and provincial average levels, so that local governments have the incentive to focus on grain.