In September 2014, I had the opportunity to travel to Beijing, China with USSEC (United States Soybean Export Council). These are some of the things I learned and are important factors around the trade tariffs that the U.S. and China are putting into motion. This post was originally published in November 2014. #tradenottarriffs.
As you may know, professionally, I have worked with farmers for many years on helping them to market (sell) their grain. It’s next to impossible to think about the grain markets and not think about the impact that China has.
China and the U.S. are very important to one another in agriculture.
The reason that China influences the U.S. markets so much is because they have such a large population to feed. China’s population is nearly 20% of the world population. It really is something to think about those numbers from a remote town in Kansas, and quite another thing to see it first hand in Beijing, China.
With this mass quantity of people, food security is one of the top priorities. From a very simplistic view, keeping people fed helps tremendously in keeping peace. This was my basic understanding prior to my trip, but as with most things, it’s much more complex than this basic assumption.
Movement of people from rural to urban areas
Because the rural areas are very poor and because it’s difficult to provide services to remove areas, the Chinese government has a goal to encourage people to move from the rural areas of China into the cities. The plan is to move 25% of the rural population to the urban areas over the next several years. Think about this – this is like moving the entire population currently located on East Coast to the Midwest!
The thought process is that if the people are in urban rather than remote areas than better services can be offered such as nutrition and education. Along with moving into the urban areas is improved incomes. This is not unlike the migration from farms to the cities that the US witnessed during the 1920’s to the 1950’s. The first thing that comes along with higher incomes is higher quality nutrition, almost always first in the form of protein. This is why there has been a dramatic increase in the consumption of pork and chicken in China over the past decade. Pork and chicken are both large consumers of soymeal in their feed (food) ration.
Impact on U.S. Farmers
China is a very important buyer of U.S. grains, and particularly U.S. soy. China is the fourth largest producer of soybeans in the world. Yet, the Chinese consume so much soy that twenty-five to thirty percent of the entire U.S. soybean crop is exported to China.
When they encounter dry growing conditions, such as they did the past few years, they can purchase mass quantities of other grains from the U.S. and other countries, as well.
China’s largest agriculture export to the U.S. is aquaculture.
Farms in China are about 2.5 acres each (or 2 ½ football fields). The majority of the farm work is manual with very few farms having mechanization. Because of steep terrain, some of the farmland would be quite difficult to farm by machine.
There are no personal property rights in China. The government owns the land and the tenant farmers have long-term leases of 30 years. As I understand it, the one who has the land leased is allowed to sublet the land to another.
Not Enough Farm Land
There is not enough farm land in China to produce all the food needed to feed their people. They look at wheat and rice as being staple foods to feed the people, so the government allocates enough acres to be mostly self sufficient in wheat and rice production. Then there are enough acres left to be mostly self sufficient in either corn or soybeans. Looking at the tonnage of production per acre of each of these crops, it makes more sense for them to try to be self sufficient in corn. They look at it as importing land and water and saving on freight by importing soybeans. Another advantage to importing soybeans is that there are reliable suppliers in both North and South America and differing growing seasons.
Soy foods are commonly eaten in China. My understanding is that all the soy foods consumed are grown in China and is non-GMO. However, with the population and the increase in future incomes, eventually, they may need to import soybeans for food as well as feed.
Although the internet is different than it is in the U.S. with many popular U.S. websites blocked, the Chinese people certainly have access to their own sites on the internet. Similar to the U.S., they also have celebrities and bloggers who help mold the opinions of the people. With that, people in China have heard many of the same concerns around GMO (genetically modified organisms) production that we see in the U.S.
The people are very health conscious. They want to know what the long-term impacts of eating GMO foods are. They have concerns about whether or not GMOs cause cancer, infertility issues, or allergies.
Why I was in China
I was one of four U.S. farm moms who went to China. We met primarily with younger women to discuss how and why we raise GMO crops on our farms. We talked about what U.S. farms are like. We also shared about why we feel that GMO crops are safe to consume and how GMOs have helped our farms and by extension have helped the environment. We also talked about some of the things that we think will be important in the future with GMOs. Below are a few good websites on the safety of GMOs.
In a future blog post, I will address some of the common concerns about GMOs – stay tuned!
Resources for GMOs
GMO Answers http://gmoanswers.com/
Best Food Facts http://www.bestfoodfacts.org/