Annex 3: Agricultural Policy and Food Security in China 中国农业政策与食品安全 --------------------------------------------------------------------------------Introduction Food security and the performance of the agricultural sector Agricultural development strategy, policies and food security China's food economy prospects Issues and challenges Concluding Remarks References--------------------------------------------------------------------------------Introduction China's effort to produce enough to feed its growing population has long been recognized. It feeds over one-fifth of the world's population with only one-fifteenth of the world's arable land. In recent history, China has either exported food or imported relatively little. China was a net exporter of food, even of grain, in the 1950s. Although China became a net importer of grain in the 1960s, the share of net imports to total domestic consumption was marginal. Net import shares reached approximately three percent in the early reform period (1978-84), then declined to approximately one percent in the following period (1985-90). China has since become a net grain exporter, except in 1995 when it had a record level grain imports of nearly 20 million tons. Net exports between 1992 and 1994 were over 5 million tons annually. While China's grain imports may grow slightly in the coming decades, the nation has developed a strong position as a net exporter of food (both grain and non grain) in value terms by exporting high value-added foodstuff including livestock products and other processed foods during the reform period. Net food exports grew to billion US dollars in 1985 and peaked at billion dollars in 1993, from a state of balanced trade (in value terms) in 1980 (China Customs Statistics). China's future food security, however, is a subject of growing concern. First, although China's food production has grown over the last several decades, year-to-year fluctuations of food supply and prices are significant. Market stabilization and food price inflation have been among the major targets of government policy since the late 1980s. The Chinese government considers maintaining a comparatively high level of food self-sufficiency, avoiding supply shocks, and stabilizing consumer prices, a matter of national security and stability: Only when the Chinese people are free from food availability and stability of food supply worries can they concentrate on and support the current reform, thus ensuring a sustained, rapid and healthy development of the economy (The State Council, 1996). To this end, the government recently adopted measures to stabilize domestic food supply and stabilize the market - these measures include administrative and economic intervention in food distribution and marketing systems, national and local food reserve schemes, price regulations, international trade, factor markets, and rural infrastructure development. Secondly, food security and access to food are mainly poverty issues. Although national economic growth is strong, it is uneven across regions. Farmer's incomes in the central and eastern regions of China continue to grow more rapidly than those in the west and southwest. Income inequality among regions, between rural and urban areas, and within regions continues to grow (MOA, 1997). In the early 1980s, tremendous progress was made in addressing China's poverty problem, mainly due to the government's rural reform program. However, this progress has slowed down over the past ten years. Finally, China's food supply availability could be a major food security issue in the coming decades if policies were not formulated in the right directions. Worldwide, food production growth rates have outpaced population growth in recent decades, implying increased food