Chinese Economics Thread
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Equation
Lieutenant General
Lack of water...isn't that the North to South Water Diversion project is for? These think tankers needs to see the real long term of China's planning instead of the usual rhetoric oh boo hoo if China doesn't follow our suggestions and so called expertise.
antiterror13
Brigadier
the use of water in China' agriculture sectors is very inefficient. China uses approximately 65% of total 554.1 cu km/yr of water for agriculture (12% for domestic and 23 % for industry). Imagine every 1% saving of water in agriculture would be equivalent to 3.6 cu km of fresh water or 3.6 billions m3. It is believed at least 50% can be saved by utilising high tech irrigation system (drip irrigation, etc). China need to focus on water usage efficiency, also for domestic and industry.
China is not lacking of fresh water ... just not efficient and lack of management
China is not lacking of fresh water ... just not efficient and lack of management
Ultra
Junior Member
I think it is more about lack of funding - China is already got the tech and industry to do this, just not with major government backing and support. China already has the most efficient water usage system for agriculture - the Aeroponics and Hydroponics systems. If you search "Aeroponics China" and "HydroponicsChina" you can see there are thousands of manufacturers and sellers of these systems in China. The problem is the lack of government funding to help small businesses and farms to switch to these more efficient systems. In fact China's agricultural problem is more a systemic one - there are way too many small / family farms due to the fact that communist ideology of self-sustainability and distributed the land to almost every household. What China need to do is what America did decades ago - consolidation of small farms into large vertically integrated industralized farms (like Cargill, Continental, Cook Industries, Dreyfus, Archer-Daniel Midland). Small farms are inherently inefficient as they waste fuels, energy, water and manpower needlessly. By combining these small and micro farms into larger industralized high tech farms China will be able to quadriple the foot production while lowering the cost by the virtue of higher efficiency.
I think the chinese government recognize this problem long ago and they are formulating strategies to move forward with this as shown in the news below:
Consolidation in Chinese Agriculture is Pushed Forward
August 21, 2014
Farm consolidation has become an ongoing issue in China. The No. 1 Central Document for 2014 released jointly in January by the Central Committee of the Chinese Communist Party and the Chinese government’s State Council established goals to modernize and industrialize Chinese agricultural production and facilitate the steady movement of rural people to cities, while protecting .
Deep in the details of the document were goals to make greater efforts to support agricultural insurance, develop various kinds of scale management, speed up the development of the modern seed industry and agricultural mechanization, strengthen the building of the market system for agricultural products and promote and speed up the urbanization of the population transferred from agriculture. This was to be done while ensuring that the farmland area will not decrease, the quality of farmland will improve and agricultural production capacity should be continuously increased to insure food security. These statements should be taken as desired outcomes of policies, not immediate action points. They do provide a general framework for policy discussions.
The 15-page document makes clear that these are to be made within the current system of government management of agriculture, but recognizes that people will be transferred out of agriculture. After decades of trying to prevent the movement of people from rural to urban areas, the government is recognizing the use of modern technology requires larger farms and many farmers have land areas too small to allow them to earn incomes that move them above subsistence incomes. Change will likely come slowly, but the process has begun.
Not all of Chinese agriculture is at the same point in terms of consolidation. A recent report by the Foreign Agricultural Service (FAS) of USDA on Northeast China noted that most agricultural production comes from farms of less than two acres, but in the province of Heilongjiang a number of large scale state farms still exist and account for approximately one third of crop production. Over 80 percent of the country’s imports of large combines come in through the custom district of Dalian in Liaoning province. Efforts to encourage farm consolidation and larger scale production are underway in all three provinces, most notably in Heilongjiang. The Northeast accounts for 40 percent of China’s soybean production, 35 percent of its corn output, and 30-50 percent of the japonica rice crop.
A recent story in South China Morning Post newspaper reported that China’s Ministry of Agriculture had taken over 1,700 farms and 3,200 agricultural companies, including seed distribution. Similar consolidations of smaller businesses into state-owned enterprises have previously occurred to promote large-scale agribusiness.
Segments of Chinese agriculture are at different degrees of concentration. Though the changes are hard to quantify, swine and dairy production for more than a decade have been making the shift from small backyard operations to modern large scale farms. That is probably more than half done and maybe approaching two thirds done. The chicken broiler industry is similar, but the total industry has also grown. The debate on consolidation is mostly done for these commodities.
Most of the cotton is produced by 7.5 million growers with 0.5 hectares of cotton, but some cotton farmers are organized as much larger units and can use additional production aids like plastic film and drip irrigation. About 110 million farms grow rice and another 100 million grow corn. Wheat is grown by about 75 million farmers, most of whom grow one or more other crops. Soybeans are not part of the debate because most of the soybeans consumed are imported and that is not going to change.
The debate on consolidation is really about corn, rice and wheat. Corn is mostly used as feed for swine to produce 55 million tons of pork annually. An ample supply of pork is a measure of the standard of living and should not be overlooked as a food security issue. Rice and wheat are used for direct human consumption and are at the center of the consolidation debate.
The No. 1 Central Document provides some direction. Basic self-sufficiency of grain and absolute grain ration security are to be ensured under any policy. The international markets for agricultural products and international agricultural resources are to be used to effectively regulate and supplement domestic grain supply. This is taken by analysts in the U.S. to mean that wheat and rice import can be about 1.0 percent of annual consumption, with corn imports up to 5.0 percent in some years. China also directly imports pork, beef, dairy products and poultry meat when needed.
Wheat and corn farmers have one-third of a hectare and rice farmers a little more than one-fourth of a hectare. Even farmers with 2 or 3 crops cannot hope to efficiently use many newer technologies. The one exception to this rule is improved seeds and may be why the Chinese officials are interested in the development of the seed industry. Improved seeds are said to be size-of-farm neutral. Chinese and Indian cotton farmers proved that to be true with hybrid and biotech cotton seeds. Improved seeds may help to increase yields during this transition period.
There is no road map for how to make this transition. There is no history of property rights in China, but beginning in 2008 peasants could obtain use rights. There are many references to land use in the No. 1 Central Document, but it remains to be seen what that means in the context of the Chinese system. The political leaders recognize the need for change. There is no reason to delay.
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Ultra
Junior Member
This another article talking about the root of the problem:
Why China Has The Worst Farms In The World
Oct 20 2012, 2:44 AM
Photo:
Even as China has emerged to be the second largest economy in the world, its agriculture sector continues to be one of the most inefficient in the world., according to Deutsche Bank’s Michael Spencer.
This is largely because all land in China is still owned by the government.
Farmland in China was collectivized — in which property and resources are owned by the community not individuals — under Mao.
Post-Mao reformers have implemented reforms to boost productivity. But the lack of credit, and the inability to own and mortgage land has deterred farmers from turning small-scale farming into more industrialized farms.
In fact, land grabs continue to be a problem and have sparked and Guangdong, and have even driven corrupt officials out of the villages.
Farmers can't own land in China. They are leased land for a period of time.
China’s water crisis needs better farming, not the South-North Water Transfer
Nathanial Matthews 13.06.2013
With two-thirds of China’s water withdrawals made by farmers, agriculture is at the heart of the resource challenge, argues Nathanial Matthews
Chinese agricultural industry wastes large volumes of water through poor management and inefficient irrigation (Image by )
Farmers manage most of the world’s water, and China is no exception: agriculture accounts for 68% of the water taken from groundwater sources, lakes or rivers. With a country in water crisis, much needs to be done to improve farming practices and prevent waste.
Despite being one of the most water-rich nations in the world, China’s fresh water supplies are severely stressed. This is partly due to the unequal distribution of water across the country and the fact that much of China’s crops are grown on the arid North China Plain.
But the Chinese agricultural industry also wastes large volumes of water through poor management and inefficient irrigation. China’s attempts at food self-sufficiency and demands from its rising and increasingly wealthy population have led to heavy application of fertilisers and pesticides as farmers try to improve crop yields.
Inorganic agricultural chemicals seep into rivers and lakes causing pollution and impacting ecosystems. Inefficient irrigation techniques and the over extraction of groundwater have caused extensive depletion and water shortages. China’s First National Census of Water recently reported that up to 28,000 rivers have disappeared across the country over the last 20 years.
Although the government puts most of the blame for the vanishing rivers on global climate change and statistical errors, Peter Gleick, president of the Pacific Institute and a leading water expert, points to a different culprit. “The ‘disappearance’ of major rivers and streams is far more likely to be directly connected to uncontrolled and unsustainable extraction of water for industry and agriculture,” quotes him as saying.
One of the government’s solutions to this crisis is the South-North Water Transfer Project, which will divert water north from the Yangtze. This enormous and costly project doesn’t even begin to address the issue of overuse and environmental pollution. What’s needed is a complete rethink in how China manages its water.
A key element of this must be change within the agricultural industry, starting with investment in improved irrigation technologies to reduce water use and incentives to improve fertiliser and pesticide application. Encouraging government departments to develop policies that address the links between water, food, energy and the environment in tandem with strong enforcement of environmental laws and regulations will also help encourage industry and farmers to see the value in conserving and protecting water and the environment.
Consumers and water
Consumers can also play a role. The fact that we eat most of the water we use means that our food choices have a large impact on our natural environment. The water contained in our food is called virtual water or embedded water. It is especially high in meat products – chickens, pigs and cows all consume large amounts of feed during rearing.Producing a kilogram of chicken requires 3,900 litres of water, for example, while a kilogram of pork and beef require 4,900 and 15,000 litres respectively. According to the US Agricultural Department, meat consumption, especially pork, has quadrupled in China in the last 30 years and is continuing to rise rapidly.
By reducing our meat intake, we can significantly reduce the amount of water we consume. However, reducing our meat consumption is only part of the solution. The other lies in reducing our waste. The world currently wastes between 30% and 50% of all food grown, representing billions of litres of fresh water, as well as the energy and chemicals required to grow it, according to the UK Institution of Mechanical Engineers. By living within our means we can help to ensure China’s fresh water and the life it supports will be available for future generations.
Nathanial Matthews is a PhD student in the Department of Geography, King’s College, London.
And I agree with the above point - that China shouldn't be trying to water the desert by diverting precious water to the arid north. The north should develop into different type of industries instead of agriculture, while the south where there are plenty of water (and flooding!) should be develop for more agriculture while discouraging heavy and high tech industries where it could containminate the food source.
Why China Has The Worst Farms In The World
Oct 20 2012, 2:44 AM
Photo:
Even as China has emerged to be the second largest economy in the world, its agriculture sector continues to be one of the most inefficient in the world., according to Deutsche Bank’s Michael Spencer.
This is largely because all land in China is still owned by the government.
Farmland in China was collectivized — in which property and resources are owned by the community not individuals — under Mao.
Post-Mao reformers have implemented reforms to boost productivity. But the lack of credit, and the inability to own and mortgage land has deterred farmers from turning small-scale farming into more industrialized farms.
In fact, land grabs continue to be a problem and have sparked and Guangdong, and have even driven corrupt officials out of the villages.
Farmers can't own land in China. They are leased land for a period of time.
China’s water crisis needs better farming, not the South-North Water Transfer
Nathanial Matthews 13.06.2013
With two-thirds of China’s water withdrawals made by farmers, agriculture is at the heart of the resource challenge, argues Nathanial Matthews
Chinese agricultural industry wastes large volumes of water through poor management and inefficient irrigation (Image by )
Farmers manage most of the world’s water, and China is no exception: agriculture accounts for 68% of the water taken from groundwater sources, lakes or rivers. With a country in water crisis, much needs to be done to improve farming practices and prevent waste.
Despite being one of the most water-rich nations in the world, China’s fresh water supplies are severely stressed. This is partly due to the unequal distribution of water across the country and the fact that much of China’s crops are grown on the arid North China Plain.
But the Chinese agricultural industry also wastes large volumes of water through poor management and inefficient irrigation. China’s attempts at food self-sufficiency and demands from its rising and increasingly wealthy population have led to heavy application of fertilisers and pesticides as farmers try to improve crop yields.
Inorganic agricultural chemicals seep into rivers and lakes causing pollution and impacting ecosystems. Inefficient irrigation techniques and the over extraction of groundwater have caused extensive depletion and water shortages. China’s First National Census of Water recently reported that up to 28,000 rivers have disappeared across the country over the last 20 years.
Although the government puts most of the blame for the vanishing rivers on global climate change and statistical errors, Peter Gleick, president of the Pacific Institute and a leading water expert, points to a different culprit. “The ‘disappearance’ of major rivers and streams is far more likely to be directly connected to uncontrolled and unsustainable extraction of water for industry and agriculture,” quotes him as saying.
One of the government’s solutions to this crisis is the South-North Water Transfer Project, which will divert water north from the Yangtze. This enormous and costly project doesn’t even begin to address the issue of overuse and environmental pollution. What’s needed is a complete rethink in how China manages its water.
A key element of this must be change within the agricultural industry, starting with investment in improved irrigation technologies to reduce water use and incentives to improve fertiliser and pesticide application. Encouraging government departments to develop policies that address the links between water, food, energy and the environment in tandem with strong enforcement of environmental laws and regulations will also help encourage industry and farmers to see the value in conserving and protecting water and the environment.
Consumers and water
Consumers can also play a role. The fact that we eat most of the water we use means that our food choices have a large impact on our natural environment. The water contained in our food is called virtual water or embedded water. It is especially high in meat products – chickens, pigs and cows all consume large amounts of feed during rearing.Producing a kilogram of chicken requires 3,900 litres of water, for example, while a kilogram of pork and beef require 4,900 and 15,000 litres respectively. According to the US Agricultural Department, meat consumption, especially pork, has quadrupled in China in the last 30 years and is continuing to rise rapidly.
By reducing our meat intake, we can significantly reduce the amount of water we consume. However, reducing our meat consumption is only part of the solution. The other lies in reducing our waste. The world currently wastes between 30% and 50% of all food grown, representing billions of litres of fresh water, as well as the energy and chemicals required to grow it, according to the UK Institution of Mechanical Engineers. By living within our means we can help to ensure China’s fresh water and the life it supports will be available for future generations.
Nathanial Matthews is a PhD student in the Department of Geography, King’s College, London.
And I agree with the above point - that China shouldn't be trying to water the desert by diverting precious water to the arid north. The north should develop into different type of industries instead of agriculture, while the south where there are plenty of water (and flooding!) should be develop for more agriculture while discouraging heavy and high tech industries where it could containminate the food source.
I think subsidies to Chinese farmers are not a bad thing. It is definitely unsustainable in the long run, but they have to understand one thing, when farmer gets richer, that mean they can send their kids to school. A lot of younger generation does not want to be farmers. This will help them vacate the agricultural land which help "concentration". The other thing that could happen is the farmer could own better farm equipment and rent other vacated agricultural land leading to "concentration", this may help some farmer to grow a local farming industry.
I think "concentration" of farming is a matter of time. Big corporation will industrialize farmlands. Local "production team" (生产队) will be willing to rent out the land for farming if the rent price is good.
I think "concentration" of farming is a matter of time. Big corporation will industrialize farmlands. Local "production team" (生产队) will be willing to rent out the land for farming if the rent price is good.
broadsword
Brigadier
It used to be that distributed farming was the means to tackle the problem of overpopulation. People are employed and fed even though it means over-employment. In this modern time, change takes time as the old system is very gradually phased out and the new one phased in.
Ultra
Junior Member
Exactly my point. Couldn't agree more!
The "concentration" you talk about is actually called "consolidation" in the west - and it happened decades ago. Nowadays farms in western countries (America, Australia, New Zealand as far as I know) are usually huge and requires large mechnical farming equipments like tractors, harvesters, various mechnical equipments just to be able to manage it.
The farms are so large most farmers own airplanes just to sow seeds and spread pesticides and water their crops (fertilizers)!
Compare to most of asia (even Japan!!) still relies mostly on manpower to grow their farm...
Once the farmlands are consolidated into large continous piece, mechnical and industrialized methods can quickly and efficiently manage these farm lands.
I remember one of the article I read in National Geographic years ago talk about this problem too:
"The nitrogen dilemma is most starkly visible in China, a country that loves its food and worries that supplies might run out. To the casual visitor, that anxiety seems misplaced. There’s a feast, it seems, on every street. In a restaurant called San Geng Bi Feng Gang, on the outskirts of Nanjing, I watch with wonder as dishes parade by: steamed fish, fried mutton chops, chrysanthemum-leaf-and-egg soup, a noodle dish made from sweet potatoes, fried broccoli, Chinese yams, steaming bowls of rice.
“Did you always eat this well?” I ask Liu Tianlong, an agricultural scientist who’s introducing me to farmers nearby.
His boyish smile fades, and for a second he looks grim. “No,” he says. “When I was young, you were lucky to get three bowls of rice.”
Liu grew up in the aftermath of China’s great famine, which lasted from 1959 to 1961 and killed an estimated 30 million people. Drought played a part, but the catastrophe was inflicted mainly by the whims of Chairman Mao. The Chinese leader’s Great Leap Forward collectivized farming and forced peasants to turn their harvests over to a centralized bureaucracy.
The famine passed, but scarcity continued until the late 1970s, when farmers regained control of their own harvests. “Within two years, almost overnight, food was in surplus,” recalls Deli Chen, who witnessed those reforms as a boy in a small rice-growing village in Jiangsu Province. Chen is now a soil scientist at the University of Melbourne in Australia.
Yet China’s newly entrepreneurial farmers ran into another barrier: the limits of their land. As the country’s population grew by an astounding 300 million people between 1970 and 1990, China’s traditional agriculture struggled to keep up.
Song Linyuan, an elderly but spry farmer in a village northwest of Nanjing, recalls how he once kept his 1.3 acres of cropland as fertile as possible, composting household waste and spreading manure from his pigs and chickens. In all, his efforts added perhaps a hundred pounds of nitrogen per acre of land each year. He harvested 2,600 to 3,300 pounds of rice per acre.
That’s a respectable harvest, a better yield than in many parts of the world. But now he gets more than twice that: 7,200 pounds per acre. It’s a harvest many farmers can only dream of.
The difference? “Better fertilizer,” he says. We’re sitting in a shop surrounded by farmers. Song’s answer provokes a loud discussion. Some agree that fertilizer was key; others say better seeds were more important. In reality the two technologies are intertwined. The high-yielding varieties of rice and wheat that breeders created in the 1950s and 1960s could reach their full potential only if they got more nitrogen.
The Chinese government made sure those crops were well fed. Between 1975 and 1995 it built hundreds of nitrogen factories, quadrupling the country’s manufacture of fertilizer and turning China into the world’s biggest producer. Song now spreads about five times as much nitrogen as before, saturating his fields with urea—a dry form of nitrogen—by casting handfuls of the snow-white granules across green shoots. This adds up to 530 pounds of nitrogen per acre. Farmers who grow vegetables use even more; some spread a ton of nitrogen, or even two, on each hectare (2.47 acres). Few of them think they’re doing anything harmful. “No, no pollution,” says Song, when asked about the environmental effects of fertilizer.
Scientists tell a different story. “Nitrogen fertilizer is overused by 30 to 60 percent” in intensively managed fields, says Xiaotang Ju, of the China Agricultural University in Beijing. “It’s misuse!” Once spread on fields, nitrogen compounds cascade through the environment, altering our world, often in unwelcome ways. Some of the nitrogen washes directly from fields into streams or escapes into the air. Some is eaten, in the form of grain, by either humans or farm animals, but is then released back into the environment as sewage or manure from the world’s growing number of pig and chicken farms."
There was a photograph from another article I read (I think "New Scientists") that shows the intensity of fertilizer usage in US vs China - they were using satellites to detect the nitrogen in farmlands and China was clearly very very red while US is just about right without too much over usage. It shows that the farmers in China are over using the chemical fertilizers which results in environmental degradation turning the soil into acidic. If the farms are manage by large vertically integrated enterprises with bottomline - they would be farm more efficient in the usage as to cut cost. I think consolidation and vertical integration is the best way to go for China.
antiterror13
Brigadier
yes, a lot can be improved in farming in Asia, particularly in China.
But rice in most Asia are kind of "sacred", it is respected and honoured ...
But rice in most Asia are kind of "sacred", it is respected and honoured ...
Equation
Lieutenant General
But it takes up a lot of water to cultivate it. Good thing China is now introducing new methods and ways to use less water to grow rice.