Who will feed China?

THE WORLD'S MOST POPULOUS COUNTRY IS FACING A MASSIVE GRAIN DEFICIT

At the close of the 20th century, we are adding 90 million people a year to the world's burden, forcing many scientific observers to conclude that we're on a collision course with the Earth's natural limits.

Those limits have been a moving target, with great debate over which of our vital natural resources is becoming most seriously stressed. But now some clear patterns are emerging, and it looks as though our ability to expand food production fast enough to keep up with growing population numbers will be one of the earlier constraints to emerge. The first red flag was oceanic fisheries, nearly all of which are being pushed to the limit and beyond by human demand (see E's November/December cover story, "Contents Under Pressure"). Water scarcity is now also a factor in holding back growth in food production on every continent. And around the world, growth in food production is slowing as available crop varieties are unable to increase yields by our simply adding more fertilizer.

A BILLION CHINESE

Population and food scarcity issues come together in contemporary China. As Chinese leaders analyzed population, land and water trends some 20 years ago, they realized that they had to choose between the reproductive rights of the current generation and the survival rights of the next generation. What separates the government in Beijing from those in many other countries is that it is desperately trying to protect the options of the next generation, politically difficult though that may be.

In 1982, China's population reached one billion, making it the first member of an exclusive club. By 2017, its population is projected to reach 1.5 billion - equal to the world's entire population in 1900. China's population is expected to peak at 1.66 billion in 2045, after which it should start to decline slowly.

Looked at in terms of the last four decades and the next four, the sheer size of China's population growth becomes clear. From 1950 to 1990, China added 571 million people. From 1990 to 2030, it is projected to add 490 million more - an impressive slowing of population growth, but still an increase of nearly a half-billion people.

Against this backdrop, China will need to import massive quantities of grain - quantities so large that they could trigger unprecedented rises in world food prices. If they do, everyone will feel the effect, whether at supermarket checkout counters or in village markets. Price increases, already under way for seafood, will spread to rice, where production is limited by the scarcity of water as well as land, and then to wheat and other food staples. The economic effects will be felt around the world.

IS CHINA TO BLAME?

Should the world's most populous country be blamed for the effect its growing demands will have on food prices? Unfortunately, China is only one of scores of countries that have reached the carrying capacity of their land and water resources, thus requiring an ever-greater reliance on imported food. China just happens to be the largest of them and, by an accident of history, the one with the potential to tip the world balance from surplus to scarcity.

Analysts have long recognized that the demand for food in China would climb dramatically as industrialization accelerated and incomes rose. They have also assumed that rapid growth in food production in China would continue indefinitely. But in densely populated countries, rapid industrialization inevitably leads to a heavy loss of cropland, which can wipe out any rises in land productivity.

There are three immediate precedents - Japan, South Korea and Taiwan. Their common experience gives a sense of what to expect in China. For instance, the conversion of grainland to other uses, combined with other factors over the last few decades, has cost Japan 52 percent of its grain harvested area, South Korea 46 percent and Taiwan 42 percent. In Japan, grain production has fallen 32 percent from its peak in 1960. For both South Korea and Taiwan, grain output has dropped 24 percent since 1977, the year when, by coincidence, industrial production peaked in both countries. If China's rapid industrialization continues, it Can expect a similar decline. While production was falling, rising affluence was driving up the overall demand for grain. As a result, by 1994, the three countries were collectively importing 71 percent of their grain.

CHINA INDUSTRIALIZES

Exactly the same forces are at work in China, which is industrializing at a breakneck pace. Its 1990 area of grainland per person of .20 acres is the same as that of Japan in 1950, making China one of the world's most densely populated countries in agronomic terms. If China is to avoid the decline in production that occurred in Japan, it must either be more effective in protecting its cropland (which will not be easy, given Japan's outstanding record) or it must raise grain yield per acre faster during the next few decades than Japan has in the last few - an equally daunting task, considering the Japanese performance and the fact that China's current yields are already quite high by international standards.

Building the thousands of factories, warehouses and access roads that go hand-in-hand with industrialization means sacrificing cropland. The modernization of transportation also takes land. Cars and trucks - sales of 1.3 million a year are projected in China by the decade's end - will claim a vast area of cropland for roads and parking lots. The combination of continually expanding population and a shrinking cropland base will further reduce the already small growing area.

At issue is how much cropland will be lost and how fast. Rapid industrialization is already taking a toll, as grain area has dropped from 219 million acres in 1990 to an estimated 211 million in 1994. This annual drop of two million acres, or 1.4 percent - remarkably similar to the loss rates of China's three smaller neighbors in their industrialization heyday - is likely to endure as long as rapid economic growth continues.

China faces another threat to its food production that its three smaller neighbors did not. Along with the continuing disappearance of farmland, it is also confronted by an extensive diversion of irrigation water to nonfarm uses - an acute concern in a country where half the cropland is irrigated and nearly four fifths of the grain harvest comes from irrigated land. With large areas of north China now experiencing water deficits, existing demand is being met partly by depleting aquifers.

THE WAGES OF SUCCESS

That China's grain production might actually fall comes as a surprise to many. This is not the result of agricultural failure but of industrial success. Indeed, China's record in agriculture is an exceptional one. Between 1950 and 1994, grain production increased nearly fourfold - a phenomenal achievement. After the agricultural reforms in 1978, output climbed in six years from scarcely 200 million tons to 300 million tons. With this surge, China moved ahead of the U.S. to become the world's leading grain producer.

Another way of evaluating China's agricultural record is to compare it with that of India, the world's second most populous country. Per capita grain production in China, which was already somewhat higher than in India, climbed sharply after agricultural reforms were launched in 1978, opening an impressive margin over its Asian neighbor.

The immediate challenge facing China is not averting starvation, for it has established a wide margin between its current consumption level of 660 pounds and the subsistence level. Rather, the challenge is to keep prices from going out of control in the face of soaring demand for food driven by unprecedented advances in income.

Because China's population is so large, even a slow rate of growth means huge absolute increases. Yet these increases are only the beginning of the story. Even as population expands, incomes are rising at an unprecedented rate. Economic growth of 13 percent in 1992 and 1993, of 11 percent in 1994, and of an estimated 10 percent in 1995 add up to a phenomenal 56 percent expansion of the Chinese economy in just four years. Never before have incomes for so many people risen so quickly.

This rapid economic expansion promises to push demand for food up at a record rate. China is entering its expansion stage with a population of 1.2 billion and an economy that is expanding twice as fast as those of Western Europe, North America and Japan after World War II. If its rapid economic growth continues, China could within the next decade overtake the United States as the world's largest economy.

HOW MUCH FOOD WILL CHINA NEED?

Past experience has not prepared us well for assessing the scale of China's future food demand. Multiplying 1.2 billion times anything is a lot. Two more beers per person in China would take the entire Norwegian grain harvest. And if the Chinese were to consume seafood at the same rate as the Japanese do, China would need the annual world fish catch.

As incomes rise, one of the first things that low-income people do is diversify their diets, shifting from a monotonous fare in which a starchy staple, such as rice, supplies 70 percent or more of calories, to one that includes meat, milk and eggs. As consumption of pork, beef, poultry, eggs, milk and other livestock products increases along with income, grain requirements rise rapidly.

The first signs of a growing imbalance between the demand and supply for grain in China became evident in early 1994. In February, grain prices in China's 35 major cities jumped dramatically. In March, driven by panic buying and hoarding, the rise continued unabated. In response, the government released millions of tons of grain from stocks to check the runaway increase in prices. This calmed food markets, but only temporarily. By October, grain prices were 60 percent higher than a year earlier. More grain reserves were released, and the government banned trading in rice futures on the Shanghai Commodity Exchange. Speculators were driving futures prices upward, leading to panic among urban consumers. The 1994 inflation rate of 24 percent - the worst since modern China was created in 1949 - was largely the result of rising food prices.

Resisting the import of grain throughout most of 1994, Beijing let prices rise as much as possible to encourage farmers to stay on the land. In recent years an estimated 120 million people, mostly from the interior provinces, have moved to cities in search of high-paying jobs. This rootless, floating population, roughly the size of Japan's, wants to be part of the economic revolution. As a potential source of political instability, these migrants are a matter of deep concern in Beijing. The government is trying to maintain a delicate balance, letting the price of grain rise enough to keep farmers on the land but not so much that it creates urban unrest that could lead to political upheaval.

Leaders in Beijing are also trying to deal with massive unemployment and underemployment, with much of the latter masked by villagers eking out a meager existence on tiny plots of marginal land. If China holds together as a country and if its rapid modernization continues, it will almost certainly follow the pattern of Japan, South Korea and Taiwan, importing more and more grain. Its import needs may soon far exceed the exportable supply of grain at recent prices, converting the world grain economy from a buyer's market to a seller's market. Instead of exporters competing for markets that never seem large enough (which has been the case for most of the last half-century), importers will be fighting for supplies of grain that never seem adequate.

In an integrated world economy, China's rising food prices will become the world's rising food prices. China's land scarcity will become everyone's land scarcity. And water scarcity in China will affect the entire world.

PROTECTING FOOD SECURITY

The loss of food security promises to become the defining focus of the global environmental threat. For the first time, an environmental event - the collision of expanding human demand with some of the Earth's natural limits - will have an economic impact that affects the entire world. Rising food prices will touch all of us one way or another. As the world contemplates the prospect of scarcity, it must also face the issue of distribution. As long as the pie was expanding more rapidly than population was growing, political leaders could always urge the poor to be patient because eventually their share would also rise. If the food supply is not expanding at all, as with seafood, or much more slowly than population, as with grain, the question of how the pie is divided becomes a much more immediate political issue.

One way of distributing scarce resources is to let the market do its job. Indeed, given the economic reforms in the former Soviet Union and China, reliance on the market to distribute food is now nearly worldwide. Whenever demand outruns supply, the price rises, reducing demand while encouraging additional supply. From a purely economic standpoint, the market does a good job of balancing demand and supply and distributing food. But from a social point of view, rising prices of food can quickly become life-threatening for the world's poorest. For the Third World's rural landless and its shantytown residents who already may spend 70 percent of their income on food, even a modest rise in food prices can threaten survival. China's prospective emergence as a massive importer of food may well force the world to address this long-ignored issue of distribution.

If grain prices rise in the years ahead, as now seems likely, they could create an unprecedented degree of insecurity. No economic indicator is more politically sensitive than this one. At the international level, climbing food prices could lead to potentially unmanageable inflation, abrupt shifts in currency exchange rates, and widespread political instability. This, in turn, could jeopardize the security of investments in food-importing countries such as China, Egypt and Mexico.

In addition to raising food prices, the failure to arrest the deterioration of our basic life-support systems could bring economic growth to a halt, dropping incomes and food purchasing power throughout the world. It could lead to political unrest and a swelling flow of hungry migrants across national borders. Rising food prices and the associated economic and political disruptions within China could bring that nation's economic miracle to a premature end.

WORLD MODELS

The European Union, consisting of some 15 countries and containing 360 million people, provides a model for the rest of the world of an environmentally sustainable food/population balance. Europe is the first region to reach zero population growth. At the same time, movement up the food chain has also come to a halt as diets have become saturated with livestock products. The result is that Europe's grain consumption, which has not increased for close to a decade, has stabilized - and at a level that is within the region's carrying capacity. Indeed, there is a potential for a small but sustainable export surplus of grain for the indefinite future.

North America is the other region where grain consumption is currently below sustainable production. But the exportable surplus from these two regions will be less and less adequate to meet projected import needs elsewhere in the world. If countries cannot boost consumption per person from their indigenous resources, they may not be able to do so at all, given the likely competition for importable supplies.

In the new era, by far the most urgent need is to stabilize world population as soon as possible. Some countries may discover that the goals of the World Population Plan of Action adopted in Cairo in September 1994 are not sufficiently ambitious for them - that if they are to raise consumption levels, they may have to stabilize population size even sooner than envisaged in the plan.

Closely paralleling the need to stabilize world population as soon as possible is the need to protect the resource base on which agriculture depends: soils, aquifers and the climate system. In some agricultural regions, the thin layer of topsoil that accumulated over long periods of geological time is being gradually lost through erosion, undermining the inherent productivity of the land. In a world where the demand for food is beginning to press against the limits of supply, every ton of topsoil lost diminishes the food supply of the next generation.

The depletion of aquifers by overpumping is a much more contemporary phenomenon than soil erosion, since it depends on quantities of energy for pumping that are available only in the modern era. Aquifer depletion is as undesirable and costly over the long term as it is widespread. Now common in the world's major food-producing regions, it is leading to falling water tables, higher pumping costs, and a misleading sense of food security, since a sizable fraction of today's harvest is based on the unsustainable use of water.

There is also a need to protect cropland from nonfarm uses. As noted for China, one of the principal threats to the world's cropland is the trend toward automobile-centered transportation systems: Not only does the evolution of an auto-centered transport system lead to the extensive paving of cropland, it also facilitates land-consuming urban sprawl.

World stocks of grain are at their lowest level in 20 years, and with the prospect of spreading food scarcity, an inventory is needed of the various reserves that can be tapped to alleviate scarcity. The most easily tapped reserve is surplus farm commodity cropland in the United States and Europe. If this land were returned to production, it could boost the world grain harvest by two percent, enough to cover the additional demand of world population growth for perhaps 15 months.

Another source of land to produce food is the fields used to grow nonfood products, such as tobacco. If the 12 million acres of cropland with tobacco growing on it were switched to grain, assuming the average world yield of one ton per acre, it would provide enough grain to support the growth in world population for nearly six months.

Almost as large a potential source of food is the 3.4 million acres of highly productive U.S. cornland now earmarked to produce a billion gallons of the automotive fuel ethanol annually.

Making the grain available for human consumption could cover four months of world population growth.

The area planted in cotton could also be reduced. If consumers could be persuaded to replace half of the cotton clothing they buy with clothes made from synthetic fibers, some 21 million acres of land would be freed up, providing enough grain for 11 months of world population growth. China, the world's leading cotton consumer, is already investing heavily in the manufacture of synthetic fibers on a scale that could eventually lower demand for cotton.

By far the largest food reserve is the 37 percent of the world grain harvest, some 630 million tons in 1994, that is used to produce livestock and poultry products for human consumption. This includes meat of various kinds, milk and milk products (butter, cheese, yogurt and ice cream), eggs, and fish from aquaculture.

To some degree, market forces will tap this reserve as rising grain prices push up prices of livestock products, reducing their consumption. Unfortunately, the price level at which a substantial reduction occurs is so high that it could force food consumption among millions of the world's poor below the survival level. Rationing the consumption of livestock products in the more affluent societies would free up grain without leading to dramatic price rises.

The same reduction in consumption could be achieved by imposing a tax on livestock products similar to those that governments now put on alcoholic beverages and cigarettes. Such a tax would affect the more affluent not only in industrial countries but in developing ones as well, since China is now the world's largest consumer of red meat.

Beyond this, an international food reserve is urgently needed - one that would acquire stocks when prices are low in order to release them when they are higher. In a world of food scarcity and soaring prices, the economic instability associated with inadequate reserves could lead to political turmoil and the downfall of governments. In an integrated world economy, political stability is essential to economic progress.

NO TIME TO WASTE

Time is not on our side. The world has waited too long to stabilize population. The decline in seafood supply per person and in grain output per person is already under way. This is not something that might happen. It is happening. Unfortunately, these trends are defining characteristics of the new era.

China's prospective emergence as a massive grain importer is a wake-up call - one that will force us to address issues we have long neglected. If we care about the future, we have no choice but to launch a worldwide effort to stabilize our life-support systems - soils, fisheries, aquifers and forests - and the climate system.

Leaders are judged by whether or not they respond to the great issues of their time. For our generation, the overriding issue is whether we can re-establish a stable relationship between our numbers and aspirations on the one hand and the Earth's natural support systems on the other. Unless we act quickly and decisively, neither history nor our children will judge us kindly.

CONTACT: Worldwatch Institute, 1776 Massachusetts Avenue NW, Washington, DC 20036/[phone].

RELATED ARTICLE: A Shot Heard 'Round China

China is notoriously loathe to listen to American advice on its domestic and foreign policy, but when Lester R. Brown's Worldwatch Institute released a slim volume called Who Will Feed China? in 1995, alarm bells rang out all over the world's most populous country. To counter the contention that China would eventually need to import massive quantities of grain, the Chinese government held a press conference in Beijing, adamantly asserting that "the Chinese people will feed themselves."

All the leaders of China today are survivors of the massive famine that occurred between 1959 and 1961 in the aftermath of the Great Leap Forward - a famine that claimed a staggering 30 million lives. The national psyche of China has clearly been affected by this devastating famine, and any hint that those horrendous times might reoccur was bound to bring rigorous denials.

Ironically, late in 1995, the food situation did tighten inside China; within months, the country, with a population of 1.2 billion, went from being a grain exporter to being the world's second-largest grain importer, trailing only Japan. Soon, the strident tone coming out of China began to change. The state of China's agriculture became a major focus of the communist leaders as they acknowledged that China was "facing a looming grain crisis, with a hike in imports the only apparent solution to the demands of a growing population on a shrinking farmland base." In short order, the Agricultural Development Bank of China doubled its loans to help improve agricultural output.

The growing realization of China's situation led to a sober reassessment. According to Hong Kong's South China Morning Post, "[Lester R. Brown's] arguments have caused near panic in the highest levels of the Communist Party, and the government has responded by holding seminars and issuing defiant rebuttals. 'He has had a very big effect because grain is so important in China. It has forced the government to devote more investment to agriculture,'" admitted Lei Xilu, a State Planning Commission agronomist. He added, "In the past 40 years, few other foreigners have managed to shake the confidence of China's rulers as Brown has."

In addition to its effect on China, Brown's book spawned hundreds of seminars, conferences, meetings and studies worldwide, including recognition at a Harvard University conference entitled "Feeding China: Today and Into the 21st Century" for "moving the food/population issue back towards center stage."

LESTER R. BROWN is the executive director of The Worldwatch Institute in Washington, DC. This article is adapted with permission from his book Who Will Feed China? Wake-Up Call For a Small Planet (Norton).