Chinese Economics Thread

broadsword

Brigadier
This write-up is a little dated, but should still be relevant. It is definitely a good reference.

Different level of economic development is not broached as a factor. But one factor about wheat that is not highlighted is climate. Colder climate is more conducive to higher yield.




------------------------------------------------------------------------------------

Agriculture Journal: China Versus India by the Numbers

Sep 20, 2011


By Lakshman Krishnamurthi And Sugandha Khandelwal

OB-PR991_iagri0_G_20110919071122.jpg

Noah Seelam/Agence France-Presse/Getty
Images
China
produces about 40% more rice and wheat than India, even though India’s arable land is only marginally bigger than China’s.
The decade to 2020 will be a watershed for Indian agriculture. The Indian government believes 4% growth in agricultural gross domestic product is necessary not only to achieve the nation’s overall target 9% growth but also to reduce poverty.

The most effective way of reducing poverty in a poorer country like India is by raising farm incomes because about 70% of the population is rural and slightly over 50% of the workforce is engaged in agriculture. Yet the data show that at no time since 1980 has a five-year moving average of agricultural production at constant 1999-2000 prices exceeded 4%. It is only in the most recent two years that the growth rate has moved up from a rather steady decline since the early 90s.

How did we get to this point?

India has the second largest amount of arable land of any country after the U.S. Although the total land area of the country is only slightly more than one third of China’s, India’s arable land is marginally bigger than China’s. Yet India is the second largest producer of rice and wheat after China, with China producing about 40% more rice and wheat than India. India is also the second largest producer of fruits and vegetables in the world after China, but China’s fruit production is three times India’s production. India is first, however, in the production of mangoes and bananas. When it comes to spices, India is number one in production, consumption and exports.

Although the overall numbers are impressive, the productivity of Indian agriculture is low. On average, acreage devoted to paddy cultivation declined by 6 million hectares between 1970-1979 and 2000-2009 in China while it increased by 4.6 million hectares over the same period in India. In fact, India has had more land under paddy cultivation than China every year since 1960. Yet, China out-produces India by a wide margin. Although the production disparity has decreased over time, paddy yield continues to be significantly higher in China than in India.

In the case of wheat, China had more acreage harvested than India between 1960 and 2000. Over the last 10 years, however, the situation has reversed. An important reason for the decline in grain acreage in China is lower domestic demand for grains as China has become wealthier as well as a shift to higher value-added crops such as corn. In the 60s and early 70s, India’s wheat yield was higher than China’s. But after the mid-70s, China’s yield started to outpace India’s and the disparity is the highest in the most recent decade. Even in cotton production, where India has made impressive strides, Chinese production of raw cotton is more than 40% higher than in India, and China’s cotton yield is about 2.5 times higher than India’s.

Yield is a function of controlled inputs such as seed quality, fertilizer usage, water, acreage under harvest and mechanization. Crops grown on irrigated land are not dependent on the vagaries of the weather. Steadily, over the last four decades, the amount of paddy crop under irrigation in India has increased and is now about 57%. States in which more than half the paddy crop is irrigated have 50% higher yield than states in which less than half the paddy crop is irrigated.

Wheat has realized a bigger benefit, with about 90% of wheat now grown on irrigated land. Even so, states with more than 85% of their wheat crop irrigated have 80% higher yield than states with less than 85% of the wheat crop irrigated! Wheat is similarly grown on irrigated land in China but the Chinese yield is 60% higher than the Indian yield. On the other hand, wheat is grown in the U.S. on marginal, non-irrigated land. Still, U.S. wheat yield is the same as India’s wheat yield.

One possible reason for India’s low productivity, whether wheat or rice or any crop, is the small size of individual farm holdings. The 2001 census found that 80% of farm holdings were less than 2 hectares in size, with 62% averaging less than half a hectare. Just 1% of the holdings were classified as large (over 10 hectares) and averaged 17.1 hectares. The overall average size of all holdings was only 1.33 hectares.

A more recent government report noted that small farms have gotten even smaller, and that 85% of farmers lack access to farm inputs and credit. This is not surprising as the rural population has grown but the available farm acreage has not. However, the average Chinese farm holdings are even smaller, averaging just 0.6 hectares.

Both in China and India, small farm sizes inhibit mechanization. But fertilizer usage is much higher in China than India. In addition, China invests significantly more in agricultural research and development compared to India to produce high-yield and quicker-growing crop varieties. This, along with better irrigation and more intensive cultivation of the land by double or even triple cropping, are the primary reasons for China’s superior yields.

In India, total grain production — which includes coarse grains like millet and barley as well as gram and pulses — has increased over the past decade but has barely kept up with population growth. Per capita net availability of food grains, which factors in production, wastage, exports and imports and change in stocks, averaged 174 kilograms per capita from 1990-1999 compared with 163 kg per capita from 2000-2009.

This is of concern because agricultural land availability has remained about the same over three decades. This means that yields have to improve to produce more. Yields for rice and wheat have increased, as they have for food grains as a whole. But the growth rate in yields are moderating.

Unless input factors, in particular water, change dramatically, the future looks daunting. Double cropping to increase yield is not possible without reliable access to water supply. More than 50% of the cultivated land for all crops depends on rainfall.

Not surprisingly, the yield from rainfall-dependent land is much lower compared to the yield from irrigated land. To supplement rainfall, farmers mostly depend on water from wells dug on farmland. Although use of ground water has been a major factor in the rapid growth of Indian agriculture, water depletion and wastage have become significant problems. The water table in many areas has eroded, requiring deeper and deeper wells.

In addition, a water management report in the government’s 11th Five-Year Plan, that runs to 2012, finds that water use is often inefficient. Coupled with the fact that a significant amount – at a minimum one third — of farm land is degraded, it is imperative that water management techniques such as drip irrigation be employed, which both conserves water and improves yield.

But such systems are costly and beyond the reach of most farmers. Even in Punjab, the most productive state in India, rice and wheat yields only match the recent average for all of China.

The goal in the current five-year plan was to increase annual food production by 20 million tons to 251 million from 231 million. A severe drought actually decreased food grain production to 218 million tons in the year ended March 31, 2010. But production rebounded and reached a record 241 million tons in the year ended March 31. So, in a rare heartening sign, this goal at least appears feasible.

Lakshman Krishnamurthi is professor of marketing at the Kellogg School at Northwestern University; Sugandha Khandelwal is a former research associate at the Kellogg School.
 

Blackstone

Brigadier
This write-up is a little dated, but should still be relevant. It is definitely a good reference.

Different level of economic development is not broached as a factor. But one factor about wheat that is not highlighted is climate. Colder climate is more conducive to higher yield.




------------------------------------------------------------------------------------

Agriculture Journal: China Versus India by the Numbers

Sep 20, 2011
I'm not sure how germane a comparison article from 2011 is in 2015. The article doesn't discuss differences in food safety from pesticide usage, and with China's current efforts to address overuse of pesticides, how will it affect crop yields? Also, Modi's administration is pushing for agricultural reforms, and it's anyone's guess how much difference that will make. I'd like to see an updated article, comparing current China and India agricultural policies and achievements.
 

broadsword

Brigadier
I'd like to see an updated article, comparing current China and India agricultural policies and achievements.

So how long has Modi been in power?

Agricultural policies do not produce changes in a matter of months. Even if that report is dated in 2011, it has been relevant for decades of years preceding when comparisons were loved to be made between the two hardscrabble countries.
 

shen

Senior Member
Big setback for TPP. Obama needs to spend more effort to convince the American people that free trade can benefit them, instead of fear mongering using China as the sock puppet.

Please, Log in or Register to view URLs content!

Obama's plans for trade deals with Asia and Europe in tatters after Senate vote
Senate legislation fails to pass after Democrats put concerns about US jobs ahead of president’s argument that trade deals will boost global economy
 

Blackstone

Brigadier
Big setback for TPP. Obama needs to spend more effort to convince the American people that free trade can benefit them, instead of fear mongering using China as the sock puppet.

Please, Log in or Register to view URLs content!

Obama's plans for trade deals with Asia and Europe in tatters after Senate vote
Senate legislation fails to pass after Democrats put concerns about US jobs ahead of president’s argument that trade deals will boost global economy
Don't worry, politicians are at base whores, and their answer will be yes, once their price is met. Liz Warren's wing of the Democrat Party will log roll and some kind of arrangement will be reached. Give it a few more weeks, and Obama will get his trade authorization.
 

shen

Senior Member
Don't worry, politicians are at base whores, and their answer will be yes, once their price is met. Liz Warren's wing of the Democrat Party will log roll and some kind of arrangement will be reached. Give it a few more weeks, and Obama will get his trade authorization.

Well, what the opponents want is to attaching a bill against currency manipulation by foreign countries. The supporters of TPP claim that doing so would derail the entire TPP negotiation. Well, which country is manipulating currency these days? google Yen Dollar exchange rate. yeah, I see how it would derail TPP :)
 

broadsword

Brigadier
That is the way to ensure employment and no hungry stomach, weather permitting. They have a long way to go to consolidate the farms into sizes comparable to the West. But some dairy farms in China are really huge like those owned by China Huishan and China Mengiu. Huishan is the biggest operator and one of their farms has about 250,000 cattle, the poo of which is recycled into biogas and then electricity.
 

Ultra

Junior Member
From what I have culled:

Average Farm Sizes (Hectares)

--------------------------------------------
China - 0.7
India - 1.3
Philippines - 2
Pakistan - 3.1
Iran - 5.1

US - 182
Canada - 315
New Zealand - 223
Australia - 1538


As I suspected - Chinese do have very small farms - due to communist doctrine and distribution.

I lived in New Zealand for a long while so I know the farms there are like, and they are huge compare to most of the farms in asia. And over here in Australia we absolutely have the biggest farm ever! :D

Cubbie Station (96,000 hectares / 240,000 acres)
4237818-3x2-940x627.jpg


It has its own airstrip........
884770-homestead.jpg


....and a dam for irrigation......
881912-dam.jpg

(500,000 megalitres of water storage for its cotton crops)

........and it was all sold to the chinese for $232 million australian dollars.

Please, Log in or Register to view URLs content!

Please, Log in or Register to view URLs content!


623786-120908cubbie.jpg

067211-131022-b-cubbie-station.jpg
 
Last edited:
Top