Why China's agricultural system is inefficient?

China Agriculture systems

Since a largely man-made famine that started in the late 1950s, in which tens of millions have died, China has defied the odds by feeding its people almost entirely on its own. With just a tenth of the world's arable land, it has fed one-fifth* of the world's population. As China's middle-class appetites rise, it will no longer be able to rely on its own farms. It overtook the United States as the world's biggest importer of agricultural goods in 2011. 



A picture from apiras.net/


A picture from nationalinterest.org/



However, China continues to believe that in order to avoid starvation, it must produce the majority, if not all, of its staple foods domestically rather than relying on volatile global markets, a conviction that has resulted in unsustainable food production practices. So, what is it about China's agricultural system that makes it inefficient?

Farmers are highly subsidized in order to produce food that is easier to import from other countries. They are being pushed to cultivate grain on land that isn't ideal for it. The additives used to fuel manufacturing run off into the water system, resulting in massive waste and contamination.

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And several of the cereal stored in China's government granaries might not be much help in fending off starvation in the first place. Corrupt officials also purchase low-quality grain at low prices in order to fill granaries and lie to their bosses that they purchased high-quality food. The gap is then pocketed.

China's agricultural subsidies are in accordance with international standards. They are, however, rapidly expanding, even as rich countries reduce their subsidies for agriculture. Given China's size, these subsidies and mismanagement of the country's granaries may have a disproportionate effect on global food market stability. And they came at a high price for China. According to the OECD, the nation invested $165 billion on farm subsidies in 2012, more than double what it had spent five years before. Costs will continue to increase, partly due to a labor shortage as the young move to cities.

In China, there is some discussion on whether food security might be improved by purchasing more on global markets. However, the group takes pride in its rural roots. It does not want to cause instability in rural areas. As a result, it tends to obstruct imports when domestic producers are threatened. The government is also eager to keep farmers employed in fields that are otherwise inefficient.

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