Future Of Farming: Learnings From China
By Sourajit Aiyer 17 January, 2020
Climate change could hit farm production hard but China is prepared. Check out how with South Asia Fast Track's Aiyer
This article was originally published in Pioneer newspaper, India
The Third National Assessment Report on Climate Change of China’s Ministry of Science and Technology estimated China’s average temperature rose by ~0.9-1.5°C from 1909 to 2011, higher than the global average.
The frequency/intensity of extreme heat in east China went up in the new millennium
A 2016 paper titled ‘Climate change, food, water & population health in China’ by researchers at Queensland University had estimated the average temperature across China rose by 0.5–0.8°C during the 20th century and the frequency/intensity of extreme heat in east China went up in the new millennium.
Is climate change hurting Chinese agriculture?
Irrespective of the actual numbers, it is clear climate change is fast leading to droughts in north and north-east China and floods in south-east China. All this impacts agriculture, as shifts in temperatures and precipitation alters the climate patterns, water availability and soil quality, which in turn, impacts crop yield, availability of arable land, price of clean water, incidences of plant diseases apart from testing the vulnerability of the farm communities.
Not just China, this is an observation consistent across most emerging markets, where manufacturing and services preceded as modern economic growth-drivers. Climate shocks are only adding to their farm woes.
Focus on food security, rural development and tax incentives
And China has responded!
Its No.1 Central Document (the first document it issues each year on policy) has highlighted agriculture since some years. The country has focused on agro-technology innovations and R&D, market-oriented reforms for agriculture goods, increasing farm incomes, balancing the urban-rural development, etc., with the ultimate aim being food security and rural development.
China is experimenting with fertiliser use reduction, climate change adaptation, biotech etc
This includes intensifying the support mechanisms for agriculture, creating an incentive structure to earn a positive PSE (producer support estimate) instead of pushing a MSP (minimum support price) structure, pushing rural land reforms, accelerating the rural financial industry, improving rural governance and enabling the direct payment of subsidies to farmers in a single scheme as per land-holding, not as per crops, to promote efficiencies and rural economics. It is also experimenting with the reduction in fertiliser use, climate change adaptation, biotechnology, etc.
Tax incentives in agri-business were launched to level the playing field for domestic & foreign enterprises
Tax incentives in China’s agri-business were launched with the aim to level the playing field for domestic and foreign enterprises. This exempts companies from paying tax on profits earned via the planting of grains, vegetables, fruits, medical herbs, etc., afforestation, new varieties of farm products, livestock and agriculture services like irrigation, preliminary processing of agro-products, agro-technologies, servicing agro-machineries, etc. It is also offering VAT exemptions for investments in crop production, forestry, animal husbandry and aquaculture.
Bringing sustainability into agriculture
Since China, like most nations, is facing constraints in terms of land and water owing to the impact of climate change, its policies include collective forest rights, constructing water conservation infrastructure, promoting sustainability in agriculture and setting up a rural social security system. It is now importing cotton (from Africa), soya (from Latin America) and timber (from Russia) which are typically water-hungry and soil depleting crops in China, thus reducing the domestic production in these would reduce the environmental impact on China’s natural resources to some extent.
Further, crop switching is emerging as a focus of agriculture research in China. Scientific research suggests climate change-induced soil quality issues and water scarcity in southern China could impact the productivity of grains like rice and wheat vis-à-vis the northern parts. One way to mitigate this is would be through crop-switching and complement it with irrigation to reduce the dependence of rain-fed land. Of course, these policies must be customized as per local-area conditions, rather than adopt a one shoe fits all national approach.
China’s 13FYP included targets like a 23%, 15% & 18% reduction in water consumption, energy consumption & CO2 emissions by 2020
China’s 13th Five-Year Plan included targets like a 23%, 15% and 18% reduction in water consumption, energy consumption and CO2 emissions by 2020, thus providing visible milestones to aspire for.
The World Bank-funded study, China’s National Technology Needs Assessment for Climate Change Adaptation, includes breeding of stress-tolerant varieties, precision agriculture technology and water-saving technologies as priority areas, which would also be useful from the perspective of sustainability and climate. Chinese policy on this front should benefit through its increasing cooperation with Israel, which has demonstrated expertise in such areas.
A case for soft diplomacy
At the end, China has maintained a self-sufficiency policy when it comes to grains, with the aim to produce at least 95% of its demand domestically. The immediate impact of climate change on China’s fertile south and east regions may inevitably impact domestic farm production to some extent. However, the long-term outcomes of the policies and initiatives that China is working on should be positive.
Other emerging markets could learn from China’s initiatives to revive their farm sectors
Most importantly, its experiences with these initiatives could offer a useful guidance for other developing countries, thus providing a ready agenda for China to pursue soft diplomacy with those countries. Other emerging markets, who otherwise concentrated on manufacturing or services as their modern economic growth-drivers, could also learn from China’s initiatives to revive their farm sectors.
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