COVER STORY DRIVING FARMINGWITH TECHNOLOGY

COVER STORY DRIVING FARMINGWITH TECHNOLOGY

China needs a stronger agriculture science and technology sector to ensure its grain security By Tang Yuankai

At the beginning of 2011, major grain producing provinces in central and east China experienced a prolonged drought that stretched for more than three months.

Then in summer, a severe drought left millions short of drinking water in southwest China. Even the usually water-rich regions along the middle and lower reaches of the Yangtze River were not spared. In May, they suffered from the worst drought in 50 years, heavy rains eventually relieved the drought but these rains in turn caused serious fooding.

Despite the disasters, last year saw a bumper harvest in China.

On December 16, the Ministry of Agriculture said that the total grain output in 2011 reached a historical high of 571.2 billion kg, up 24.75 billion kg, or 4.5 percent, from 2010.

China’s grain yield had been on the rise for eight consecutive years. Between 2004 and 2011, grain production increased by 140.5 billion kg, with an annual increase of 17.5 billion kg, the largest since 1949.

“In 2011, the yield of the three staple grains—rice, wheat and corn—all increased, with a total increase of 22.25 billion kg, a rise across all three crops has been rare in the last two decades,” said Chen Yinshan, chief economist and spokesperson of the Ministry of Agriculture.

Minister of Agriculture Han Changfu attributed the increase to favorable policies, infrastructure construction and scientifc and technological support services.

Grain security

“Grain production is a strategic industry, and keeping the country’s billion plus population fed is the most important thing for China,”Han said.

Statistics from the Agriculture and Rural Affairs Committee of the National People’s Congress show that over the past few decades in China, an average of 7.39 million people have been added to the population each year, whereas the area of arable land has been dropping.

Currently, there are 121.9 million hectares of arable land in China, 8.2 million hectares less than that in 1997. On average, China has 0.092 hectare of arable land per capita, which is 40 percent less than the global average.

With a large population and low percapita arable land acreage, China faces bigger and bigger grain security challenges.

China imports 80 percent of its soybean requirement, 60 percent of its edible oil, 30 percent of its cotton and 20 percent of the sugar consumed in the country. As more corn is needed for animal feed and other corn products, the domestic supply has fallen short and imported corn is now being used to fll the gap.

Also, China has to import more than 70 percent of the advanced processing equipment it uses in agricultural production, whereas domestically produced agricultural machinery is only up to the standards of machinery produced in developed countries in the 1970s.

“To ensure grain security, Chinese people’s rice bowl should only be filled by themselves,” Han said.

According to Han, the total volume of grain traded worldwide is usually about 250 million tons, less than half of China’s total grain output, and the annual global trade volume of rice is about 25-30 million tons, about 15 percent of rice consumption in China.

“Therefore China cannot depend on the international markets to fll domestic production gaps and the country must adhere to the policy of self-suffciency and strive to supply more than 95 percent of its own consumption of rice, wheat and corn,” Han said. He added that China’s grain self-sufficiency will con-tribute to global grain security.

SUPER RICE: Yuan Longping (with loud speaker), introduces the Y Two Superior No.2 strain of rice to foreign visitors to his experimental feld in Longhui County, Hunan Province, on September 29, 2011

Though Han believes that China’s grain output can be increased to meet increasing demand in the country, expanding the area under cultivation is obviously not an option as the country already has little spare land. But he expected progress in science and technology would be able to increase the average grain yield per-unit area in China by more than 1 percent each year by 2020.

“China’s grain yields per-unit area is still far behind those of developed countries. In China, the yield per-unit area of the same crop differs widely in different areas, sometimes, by more than 750 kg per hectare in some cases,” Han said.

In addition to increasing yields per-unit area, medium- and low-yielding farmland can also be improved to increase output.

“Currently, medium- and low-yielding felds account for 70 percent of the total, and their yields per-unit area can be improved by water conservancy construction,” Han said.

At the annual central economic work conference that concluded on December 14, top economic policymakers discussed issues relating to agriculture, rural areas and farmers. Participants stressed the need to speed up progress in agricultural science and technology, boost relevant research and education programs and accelerate the application of new farming techniques.

Several industry insiders interviewed by Beijing Review at the end of last year expected agricultural science and technology would be the focus of the No.1 Document of 2012.

The No.1 Document is the frst document released by the CPC Central Committee every year, which usually lists key and pressing problems to be solved by the ruling Party and the government during the year and serves as a guideline for the whole year’s work.

Recently the document has become a synonym for the importance that the CPC Central Committee attaches to rural issues, because from 1982 to 1984 and from 2004 to 2010 the No.1 document focused on issues related to agriculture, the countryside and farmers.

Removing barriers

In 2010, science and technology contributed 52 percent of China’s agricultural growth, exceeding the contribution rate from land, the labor force and other production factors.

“In the next five years, China plans to increase the contribution rate of science and technology to more than 58 percent,” said Pan Haiping, Deputy Director of the Science and Technology Education Department of the Ministry of Agriculture.

To achieve this goal, Pan said that the government will deepen reform of agricultural research institutes, improve agricultural science and technology management systems, spur innovation, promote the application of new farming techniques at the grassroots level, cultivate more able researchers, and give continuous and stablesupport to long-term research.

According to him, the development of China’s agricultural science and technology has been hampered by insuffcient investment and the lack of qualified people working in agricultural research.

Though government funding in agricultural science and technology has increased in recent years, fscal investment in agricultural science and technology only accounted for about 0.25 percent of China’s agricultural GDP, lower than the international average of 1 percent.

“A small foreign company may spend more than 20 million yuan ($3.1 million) a year on rape seed research, more than China’s total annual spending in this field,”said Fu Tingdong, a professor at Huazhong Agricultural University. He also blames the structure and allocation of research funding in China for being infexible.

Zhang Zhenghe, a professor at the School of Economics and Management of China Agricultural University, said that in recent years, the government had increased fnancial supports to promote agricultural research and development, yet fnancial institutions failed to play their expected role.

“Many fnancial institutions are reluctant to support research and development programs because such investment is considered risky and has a long payback period. They would rather lend to companies with mature markets and products,” Zhang said.

“The government is going to steadily increase the amount it invests in agricultural science and technology,” said Zhang Taolin, Vice Minister of Agriculture, in November 2011.

In the same month, eight central government departments issued a circular on boosting fnancial investment in science and technology.

The document encourages financial institutions to support key agricultural research and development programs with more loans and help hi-tech companies raise funds in the capital market.

China has more than 100 public-listed agricultural companies, 60-70 percent of which have research and development programs projects.

“Universities and research institutes usually focus on basic scientifc researches, whereas companies can engage in applied science innovation,” said Song Jiening, an agricultural consultant in CIConsulting, a leading industry research institution in China.

Seeds key to growth

“When I am 90 years old, the yield per hectare of hybrid rice should reach 15 tons, so that the land can feed 400 million more people,”said 81-year-old Yuan Longping, an academician of the Chinese Academy of Engineering.

Yuan, who has dedicated his life to breeding more productive strains of rice, is known as “the father of hybrid rice.” He believes that good seeds are the key to high rice output. So far 330,000 hectares of paddy felds in China have been planted with the Y Two Superior No.1 strain of rice developed by Yuan in 2001.

In September 2011, the Y Two Superior No.2 strain of rice Yuan was testing registered a record yield of 13.90 tons per hectare, whereas the yield per hectare of regular strains of rice was usually between 4.5 and 6 tons. The achievement frmly put China at the forefront of international research into hybrid rice.

Rice of this high-yielding strain is characterized by a large ear with many grains and strong resistance to diseases. In 2008, its patent was auctioned to a Chinese company at the price of 6.5 million yuan ($1 million).

Although China is good at producing hybrid rice, the country does not produce the best varieties and seeds of other crops. Data from the Ministry of Agriculture show that in China, more than 90 percent of the high-end vegetable and fower seeds used domestically are imported. In addition, 50 percent of the prime stud animals used in the rearing of pigs, chickens and cows are also imported.

In recent years, foreign breeding and seed companies have entered the Chinese market, seizing market share and crowding out some domestic companies in the industry.

1. FIGHTING DISASTER: A farmer couple in Zhaotong, Yunnan Province, sow seed potatoes in a droughtaffected corn feld on August 24, 2011, in hopes of making up their loss

3. GETTING RICH: Farmer Huang Mingcong harvests black fungus in his feld in Xuanhan County, Sichuan Province, on May 21, 2011

“Recently, the Ministry of Agriculture and the Ministry of Technology issued a circular to encourage agricultural science and technology innovation, especially the development of the breeding and seed industry,” said Zheng Fengtian, Vice Dean of the School of Agricultural Economics and Rural Development of the Renmin University of China in Beijing.

On April 18, 2011, the State Council issued a document to hasten the development of a modern crop seed industry in China. It clearly defined the strategic position of the seed industry and spelled out specifc measures to support seed companies. For instance, it said that internationally competitive companies in the industry should be nurtured through mergers and acquisitions.

On May 9, key leading enterprises in China’s seed industry held a meeting in Changsha, Hunan Province. Industry insiderssaid that the meeting was the most important for the industry in more than 50 years. Premier Wen Jiabao said in a written speech that China is a major agricultural nation, and speeding up the development of the seed industry is a strategic choice to build modern agriculture and ensure national grain security and an important way to boost agriculture through science and technology and shift the agricultural growth model.

In August, the Ministry of Agriculture issued a regulation on crop seed production license management, which increased the threshold for entry into the seed market and encourages seed companies to merge, regroup and cooperate with seed research organizations. The ministry also cracked down on intellectual property rights infringements and cases involving the production or sale of fake or inferior seeds.

The ministry also set up a new department to supervise the quality and security of seeds, including transgenic seeds, in the latter half of 2011.

The government plays a leading role in promoting agricultural science and technology application. It provides discounted loans, grants and capital injections for this purpose. In 2001, the State Council set up the Agricultural Science Technology Achievement Transformation Fund. In the following 10 years, state allocations to the fund totaled 3.15 billion yuan ($485 million).

2. SEED “SILICON VALLEY”: Cheng Xiangwen, one of China’s leading scientists in corn research, examines new corn species in a breeding base in Hainan Province on January 20, 2011

4. SEED OF HOPE: A bidder wins four ears of a new corn variety at an auction of crop seeds in Beijing on September 21, 2011

Popularization difficulties

Despite this, the promotion of new farming techniques is still a headache for the government and agricultural scientists.

“Even though some important progresses in agricultural science and technology have been made, and China’s ability to innovate in agriculture has improved in many cases, these achievements have not been put into practice,” said Pan of the Ministry of Agriculture.

Official statistics show that every year, nearly 6,000 new techniques in agricultural sectors are approved by provincial- and ministeriallevel governments, yet during the period from 2006 to 2010, only about 40 percent of these achievements were put into commercial use.

Some experts blame the situation on the inadequate performance evaluation system in agricultural research institutes, where scientists tend to be judged by the number of projects they have worked on and the papers they have published. As a result, they argue, not enough attention has been paid to the successful commercialization of research results.

In addition, as a large number of rural residents have moved to cities, there are not enough qualifed people in the rural areas to apply new science and technology.

Pan said that institutional reform is needed to promote the application of agricultural science and technology.

But, according to Song of CIConsulting, promotion of new farming techniques in remote areas is still a responsibility of the government because for-proft enterprises are unlikely to be interested in it.

tangyuankai@bjreview.com