Price controls hold China's farmers back
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Q: China made a commitment to open its agriculture when it was accepted into the WTO in 2001. Nowadays, China relies more and more on the international grain market of soybean and cotton and so on. Will this pose a great threat to the national food security?
Zhang: As China's land and water resources per capita are relatively scarce and poorly utilized, our farm products especially the grain products, are at a global disadvantage. The world average of utilization ratio of water resources is 60 percent, while it is only 40 percent in China.
China's individual production can't compete with large-scale intensive production in countries like the US and Canada, as the cultivated area is too small and the promotion of new technology, improved varieties of seed and the application of mechanized farming technology are confined by China's system.
With the deepening of the reform and opening-up process, China has to face greater pressure in the international market. The recent appreciation of the yuan and exchange rate reform undoubtedly worsened the situation.
As the arable land is declining, we are moving closer to the red line of 1.8 billion mu. For development reasons, more and more good farmland is being occupied. Although we have tried to use reclaimed land to produce good farmland, no wonder the quality of the land is declining.
For future development, we should pay more attention to adjusting the growth mode of grain production and improving yields. Considering the low utilization ratio of land and water, the serious pollution of fertilizer and pesticides and the almost wasted construction of farmland irrigation and water conservancy, we should increase national investment and agricultural subsidiaries.
Economic realities determine that the labor productivity of agriculture is lower than that of other industries, so we should not depend on the market to solve problems. The government must intervene. Besides, agricultural structures and mechanisms must be reformed and improved. We should further consider the improvements in the land transfer system and whether the land could be used as property collateral.
Q: The grain production rate in developed countries is much higher than that of the developing countries, but developed countries still give a lot of subsidies to their farmers. Is this a problem?
Zhang: The subsidies problem is a difficult one in world food trade. The UNFAO has been calling for the developed countries to decrease subsidiary for fair competition.
As for China, we should try to do more. There is a big gap between China and developed countries in technology promotion and farmers' education. We could increase subsidiaries and investments in these aspects.
It will not lead to trade disputes as it is in accordance with established legal precedents.
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