Chen Wensheng on Food Security and the Urgent Need for a New Strategy in China's Agricultural Development

Agriculture is an irreplaceable strategic industry, food is the first necessity of human survival, and food security is a goal that humanity has pursued over the long term. If China, with its population of over a billion, were to suffer a severe food shortage, even emptying the granaries of the entire world would not save China. The American scholar Lester • R • Brown's "Who Will Feed China?" shook China and the world. Whenever rising food prices trigger a world food crisis, the alarm bell keeps ringing: although each crisis has numerous causes, one important reason is that the high added value and rapid growth of non-agricultural industries hold an irresistible temptation for late-developing countries and regions, while agriculture's strategic position is most easily overlooked.

I. Strengthening agriculture's foundational position in the course of urbanisation has a major strategic role in strengthening the root of the people's survival, consolidating the foundation of the national economy, and increasing the nation's international competitive power

China must feed more than one-fifth of the world's population with less than one-tenth of the world's cultivated land. This special national condition determines that agriculture's foundational position in China should have a far more important strategic status than in any other country in the world. Although Chinese agriculture is in the best period of development in its history, with total grain output achieving ten consecutive years of increase, the rigid growth of grain demand amid industrialisation and urbanisation means agricultural development faces the challenge of constantly strengthening resource and environmental constraints. At the same time, as China's industrialisation and urbanisation continue to advance, agriculture's share of GDP keeps declining, the sources of farmers' income growth shift from relying mainly on agriculture to relying increasingly on non-agricultural industries, and agriculture's supporting role in the national economy has never been as fully demonstrated as it is today. In global economic competition, the food crises created by soaring grain prices from time to time trigger social crises in certain countries and regions. When food, together with oil and currency, becomes a strategic weapon used by one country to constrain another, agricultural production capacity and food security objectively become an indispensable core international competitiveness of a nation. In the process of transition from traditional agriculture to modern agriculture and from an agrarian society to a modern society, the development of agriculture's attributes, the enhancement of its functions and the expansion of its role have been endowed with new functions such as ecological protection, environmental regulation, bioenergy, sightseeing and leisure, cultural inheritance and international competition. This strategic role of agriculture's foundational position in strengthening the root of the people's survival, consolidating the foundation of the national economy and increasing the nation's international competitive power has become more prominent, and agriculture's foundational position in the national economy has become all the more unshakable.

II. The agricultural development and food security strategy of a populous country must break through the traditional theory of comparative advantage in the international division of labour

Food is a basic public good, a product of a weak industry, and a multifunctional product; food is also a resource for the people, a strategic resource, and a scarce resource. If one places blind faith in market mechanisms and free competition, one will inevitably pay a heavy price. This is because the broader biological destructive power of creating food shortages is unmatched by the manufacture of any weapon. If a country lacks the capacity for grain self-sufficiency and instead places blind faith in the theory of comparative advantage in the international division of labour, relying on the world grain market monopolised by a small number of developed countries to spontaneously regulate domestic grain demand, its domestic grain production system will inevitably suffer severe damage from the developed countries' grain "nuclear weapon," and in the game of key national interests it will inevitably be controlled by others and be at their mercy. Against the backdrop of international competition and economic globalisation, the strategic construction of China's agricultural development and food security needs to break through the traditional fragmented and isolated market analysis framework, examine matters with a completely new perspective, and plan from the broader overall pattern of international and domestic development. China cannot be content merely with defining food security as safeguarding domestic grain demand, thereby turning a major agricultural country into a "major country of grain rations" and leaving the nation's food security permanently in a passive position. It cannot be content merely with relying on cheap labour, high energy consumption and environmental overdraft that is not counted into costs to build a so-called "world factory," while producing certain low-end, thin-margin products that increasingly encounter trade disputes, which in fact is far less important than focusing on developing grain, a strategic industry more important in the world economic war than oil and currency. It cannot be content merely with passively following the supply-demand and price fluctuations of the world grain market to increase or decrease exports, but should alternately use means such as increasing and decreasing exports and increasing and decreasing imports to actively regulate the world grain market and lead its pricing. It cannot be content merely with letting the scale of grain production be determined by the size of consumer demand, but should convert surplus production capacity into a bioenergy industry, strengthening China's right to participate and its voice in the bioenergy field, which is beneficial to China's long-term energy strategy and enduring grain strategy. Therefore, whether agriculture can be elevated to a strategic industry with a "nuclear capability" that serves the nation's global competition is the key to China's grasping the strategic initiative in agricultural development and food security.

III. China's food security strategy must be elevated from a purely food security strategy to an overall national security strategy

The national security of a major power cannot be confined merely to the military and political dimensions, nor in economic security can it focus merely on currency, energy and industry. Judging from the situation after the world food crisis, a smokeless world economic war has already unfolded among different economies. In the game of economic globalisation, food has gone beyond the category of food; it is no longer a mere trade good in a segmented market, but a bargaining chip in international economic games, a weapon in the world economic war, and an important strategic trump card in global competition. From a strategic height, sustained grain productivity is the "nuclear weapon" development capacity in the world economic war. Whoever holds the dominant position in the world grain market holds the initiative in the world economic system and global competitiveness. On the one hand, using a strong comprehensive agricultural production capacity to form an advantage in the grain industry and employing various means such as food aid, grain trade and grain blockades can not only gain the initiative in international trade but also place one in an active position in international politics and diplomacy. On the other hand, in the face of the fact that it has become a common phenomenon for some countries internationally to use food to strangle other countries, especially the current situation in which developed agricultural countries such as the United States use the food weapon to turn developing countries from main forces in agricultural production into main forces in agricultural product consumption, directly or indirectly causing some developing countries to become increasingly dependent on grain imports and thus be controlled by others in international political, economic and cultural exchanges, thereby achieving their international hegemony, there is an urgent need to build a strategic system that strengthens the foundational position of agriculture in a major power and ensures national food security so as to enhance political influence, grasp the dominant right over world grain supply and demand, influence the price trend of the world grain market, elevate this into a strategic advantage for the entire nation, and strengthen political influence in international politics, especially geopolitics. Only then is it possible to effectively constrain hegemonism and shoulder the international responsibilities of a major power. Therefore, food security not only seriously affects economic security in currency, energy and industry, but also bears on national security at the military and political levels. It must be incorporated into the strategic system of national security from the level of the nation's long-term development and the dimension of enhancing international competitiveness, and at the height of global strategy, establishing a completely new national security strategy and a global competition strategy for a major power.

IV. The key to grasping the initiative in food security lies in the need to strengthen domestic food security by enhancing competitiveness in the world grain market

Why does the United States, even when agriculture has had consecutive bumper harvests and there is a large grain surplus, still use enormous fiscal subsidies to produce cheap grain for export at a loss, while at the same time using enormous fiscal subsidies to maintain large areas of fallow land? As long as it ensures high grain production capacity, the United States alone controls the total supply and demand of today's world grain market, and by reducing or increasing grain exports it dominates the direction of the world grain market. Thanks to the great contributions of Yuan Longping and other agricultural scientists and the high priority the national decision-making level has placed on agricultural development, China's grain yield per mu has increased substantially. But although the government has issued repeated orders and injunctions on grain production, Chinese agriculture at the farmer level has become "ration agriculture." For a long time, China's national food security strategy has taken solving basic supply as its goal, and has mostly been a passive protection and defence strategy. Although this strategy has to date protected China's food security and enabled China to remain unscathed in world food crises, as a traditionally major agricultural country and major grain-producing country, being positioned merely as a "major ration country" that ensures its own food means it basically has no voice in the world agricultural product market, and especially in successive world food crises it has missed one opportunity after another to share in the enormous dividends of the world grain market. Therefore, the situation in which a major agricultural country in the world defines its food security merely as that of a "major ration country" urgently needs to change. There is an urgent need to shift from passive food security safeguarding aimed at solving basic supply to active competition that participates in and leads the international agricultural product market, and from a regional strategy focused on agricultural development to an international strategy that participates in global competition. As a member of the WTO, China's economy has become increasingly integrated into the world economic system, and the grain market and grain prices will inevitably align with international standards. The food security strategy depends not only on the enhancement of comprehensive domestic agricultural production capacity to grasp the initiative over the "grain bag," but also on the need to enhance competitiveness in the world grain market to strengthen domestic food security. Only by forming strong grain production capacity, a low-cost production advantage, the supporting capacity of high technology and informatisation, and a well-developed market regulation mechanism, and by improving the ability to steer the market, can China always maintain an active position in the ever-changing international grain market. As a major agricultural country with several thousand years of agrarian civilisation, China's comprehensive grain production capacity has broad room for development. The key to the problem is the need to transform strong grain production capacity into a strong international market competitive advantage, especially the ability to compete with the United States and other Western developed countries in the international grain market. For enhancing China's food security, this is both a challenge and an opportunity.

V. The ultimate guarantee of China's food security must be premised on achieving consistency between increased grain output and increased farmers' income

As a basic public good, food has made "no grain, no stability" a political consensus in public decision-making throughout Chinese society, but although the government has adopted various pro-farmer policies, the enthusiasm for grain production has still not been well mobilised. This concerns the issue of the unity between increased grain output and increased farmers' income. Today's farmers are no longer the rural labour force in the traditional sense, but market entities competing fairly in a market economy. At the same time, the same input should bring not only a fair and reasonable income expectation but also a fair and reasonable development expectation. If the returns on other inputs far exceed the returns on grain production, farmers will lose their enthusiasm for grain production. Therefore, farmers' enthusiasm for growing grain must ultimately be stimulated by the sustained increase in the returns from growing grain. If the producers of grain cannot become prosperous, food security as the most important national security strategy cannot be ultimately guaranteed. Especially today, against the backdrop of accelerating industrialisation and urbanisation, the rural young and middle-aged labour force keeps migrating to cities for work, "hollow villages" keep increasing, and the phenomenon of abandoned cultivated land is becoming increasingly serious. "Who will farm the land" has become a severe problem that national food security cannot avoid. Under market economy conditions, why should farmers sacrifice their interests to bear alone the national strategic responsibility of food security? Compared with the intensity of agricultural subsidies in the United States and other Western developed countries, China is letting those Chinese farmers who can barely maintain their own survival compete unequally against the treasuries of the United States and other Western developed countries that give high subsidies to agricultural products. If this continues for long, it will inevitably force Chinese farmers to accelerate their pace of abandoning grain cultivation. To ensure the food security of a globally populous major country, such a major national strategy, the premise is to ensure that farmers can obtain comparative returns from grain production. It is necessary to unify "the government's need for grain and the farmers' becoming prosperous." While implementing effective fiscal subsidy policies, it is necessary to make greater use of market means to activate farmers' driving force for engaging in grain production, give play to the inducing role of price signals, promote the allocation of resource factors to rural areas and accelerate the process of agricultural modernisation, and form a long-term mechanism for mobilising enthusiasm for grain production. Among these, the driving force is the market mechanism, and the price signal is an effective way to connect the government and the market. For grain producers, there is nothing more direct than the price signal in activating their driving force for engaging in production. China's farmer population is enormous, and if it cannot subsidise farmers on a large scale like Europe and the United States, the returns from growing grain should mainly rely on market prices; price is the root of farmers' enthusiasm for growing grain. According to what principles should the minimum grain purchase price be determined so as to give play to the inducing role of the price signal in resource allocation? The determination of the minimum grain purchase price should depend on market factors such as the average price of social labour, the price of agricultural means of production and the extent of their rise, and the average social profit obtained from technological and capital inputs and the extent of inflation. The current minimum grain purchase price, the key point is that it fails to reflect the dynamic changes in market price factors.

VI. Concluding remarks

Agriculture is by no means a strategic industry that can drive China's rapid economic growth, but comprehensive agricultural production capacity determines China's important position in the global strategy. At present, China faces the passive situation in which the United States and other Western developed countries dominate the world grain market. Either the West will gradually erode China's grain system at very low cost until it is completely destroyed, or China will establish a strategic industry that supports major national security and thereby elevate it into a strategic advantage with comprehensive international competitiveness.

(The author is an expert of the Hunan Province Major Decision-Making Consultative Think Tank for Offering Strategies for Reform, a researcher at the Rural Development Research Centre of the Hunan Academy of Social Sciences, and the president of the Hunan Rural Development Research Institute.)