How Can Agricultural Upgrading Break New Ground at a New Starting Point

2016 is the inaugural year of the “13th Five-Year Plan.” By then, what situation and challenges will China's food security face? Where will China's agricultural structural adjustment begin? How will crop production and agricultural product processing technologies innovate? How will domestic and international food safety strategies connect and be implemented? …… A host of difficult problems remain to be solved.

Recently, the 2015 (Third) China Food and Food Safety Strategy Summit was held in Beijing. With the theme of “Transformation of Agricultural Development Mode and Continuation of Growth Momentum,” the summit focused on how to promote the transformation of agricultural development mode and the upgrading of momentum with an eye to agricultural modernization, and to seek new momentum for agricultural development under the “13th Five-Year Plan.”

Heavy Development Pressure

“Food shortages will undoubtedly become a thing of the past for China.” said Li Wei, a research fellow and director of the Development Research Center of the State Council. “For China, the food problem will no longer be a problem, at least in terms of quantity of supply.”

He pointed out that the improvement in China's food and food safety situation has laid a solid foundation for China to respond to various risks and challenges in reform and development and to maintain the stable operation of the economy and society, and has also made outstanding contributions to reducing poverty and hunger worldwide and achieving the UN Millennium Development Goals.

However, “we are clearly aware that the foundation for sustainably guaranteeing food and food safety is not solid, and in some respects it can be said to be very fragile. Whether it is the external market environment or the internal allocation of factors, both pose new and very severe challenges to food and food safety in modern China.” Li Wei said.

Grain output has increased year after year, yet Li Wei expressed deep concern about the resource costs paid. “Environmental costs and economic costs are becoming increasingly prominent. If grain production continues to be overdrawn in this way, the foundation on which agriculture depends for survival and development will be destroyed, and the sustainable growth of future grain output will inevitably face even greater risks.”

At the same time, during the “12th Five-Year Plan” period, China's agricultural development has already seen some important changes, beginning to shift from mainly pursuing quantity to placing equal emphasis on quality, quantity and efficiency, from production orientation to demand orientation, and from extensive management that relies on resources and consumption to innovation-driven intensive management.

Li Wei believed that another prominent problem is that the domestic grain market is increasingly affected by the international market. In recent years the state has continuously raised the minimum purchase prices for rice and wheat and the temporary purchase and storage price for corn, which has powerfully promoted grain output increases and farmers' income growth, but as internal conditions change, the grain price support policy also faces new challenges.

“With serious inventory backlogs and a heavy fiscal burden, how to improve the price formation mechanism for agricultural products, improve the grain purchase and storage system, and coordinate the two markets and two types of resources at home and abroad is a major topic in China's agricultural policy adjustment.” Li Wei pointed out.

Under the new economic normal, there is another problem that cannot be ignored: hidden food quality and safety risks remain numerous. “Facing more than 200 million farming households, more than 400,000 food processing enterprises, and more than 3 million food business entities, the government's existing regulatory capacity is seriously insufficient, and the quality and safety problems of imported food are also not reassuring.” Li Wei said.

Agricultural Structural Adjustment

The “13th Five-Year Plan” just reviewed and approved not long ago particularly emphasized that it is necessary to take improving the quality and efficiency of development as the center, and accelerate the formation of institutional mechanisms and development modes that lead the new economic normal. Accelerating the transformation of the agricultural development mode makes structural adjustment an intrinsic part of the matter.

“Since reform and opening up, China's agricultural structural adjustment has gone through roughly four rounds. The current fourth round of structural adjustment was proposed against the background of the ‘six highs.’” introduced Pan Wenbo, deputy director of the Department of Crop Production of the Ministry of Agriculture. The ‘six highs’ are high grain output, high import volume, high inventory, high consumption and waste, high transfer volume, and high resource consumption.

He pointed out that “from the perspective of the crop farming sector, the four major contradictions and problems China now faces are unbalanced variety structure, declining planting efficiency, still extensive production methods, and weak competitiveness of agricultural products.”

As for structural contradictions, wheat-producing areas are basically balanced, rice is in surplus balance, corn is in stage-specific oversupply, and the soybean gap is expanding year by year; cotton, sugar crops, and oil crops are constrained by resources and hit by the international market, with imports increasing substantially and production declining; at the same time, China is short of high-quality forage grass, as imports of alfalfa, for example, increase year by year.

“The goal of this round of structural adjustment is ‘two guarantees, three stabilities, two coordinations.’ The ‘two guarantees’ are guaranteeing staple grains and guaranteeing cereals, with a staple grain self-sufficiency rate of 100% and a cereal self-sufficiency rate of above 95%. The ‘three stabilities’ are stabilizing cotton, oil crops and sugar, with the cotton self-sufficiency rate basically meeting domestic consumption, the edible oil self-sufficiency rate above 30%, and the sugar crop self-sufficiency rate at around 37%. The ‘two coordinations’ are the coordinated development of vegetable basket production and demand, and the coordinated development of forage grass production and livestock breeding.” Pan Wenbo said.

Where is the focus of the adjustment? Pan Wenbo said: “Corn in non-advantageous areas.” The focus was placed on the Sickle Bay area. In the past 10 years, this region has had the fastest corn growth and the largest increase in China. At the same time, it is a typical arid area, an ecologically fragile area, and an area that depends on the weather. After the adjustment, consideration will be given to switching mainly to silage corn, alfalfa and forage grass, while also carrying out soybean—corn rotation, and drought-tolerant crops such as miscellaneous grains and potatoes.

Pan Wenbo said the technical route is adaptive adjustment, adjustment combining planting and breeding, ecological protection-oriented adjustment, adjustment combining farming and land nurturing, adjustment with both protection and reduction, and adjustment around the market. “As for structural adjustment, we started doing it this year, and now we are mainly guiding farmers to adjust through trials and demonstrations.”