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

Climate change is fast leading to droughts in N & NE China and floods in SE China; it's not just China - climate shocks are only adding to farm woes across most emerging markets
China has responded: its No.1 Central Doc has highlighted agri for many years; plus it is focusing on agro-tech innovations & market-oriented reforms, from fertiliser use reduction to tax incentives
Climate change may inevitably impact China’s fertile south & east regions but in the long-term China's policies should soften the blow; other emerging markets could take note

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.

Further Reading

  • Water Ten To Revamp Chinese Agriculture – Takeaways from Shanghai’s Global Agriculture Sustainability Forum are reviewed in relation to the new Water Ten Plan. Fertilizer, pesticide, irrigation & product tractability markets look set to change. China Water Risk’s Hu on what the new plan means for the future of Chinese agriculture
  • Climate Change, Groundwater & Agriculture In India – The hidden risks of groundwater are clear in India as it is key for the country’s food security and already is largely over extracted. What can India do? Dr Aditi Mukherji from the ICIMOD, shares ways forward
  • Recycled Organics: Protecting Water In Sydney’s Food Bowl – CORE is protecting Sydney’s foodbowl with its Sustainable Amendments for Agriculture (SAFA) Program based on using recycled organics, which benefit the land & farmers. CORE’s Chief Executive, Christopher Rochfort, expands
  • Water-Energy-Food Security Nexus In Asia’s Large River Basins – The water-energy-food security nexus is complicated but as Maija Taka, Marko Keskinen & Olli Varis show, the tensions can be alleviated. Plus, they share 3 WEF cases in Asia’s largest river basins
  • Why Hong Kong Needs A Meat Tax – Want to help stop Amazon deforestation? How about better health? With Asia’s climate action looking bleak, Greenqueen’s Ho sees a meat tax as HK’s chance to become a regional leader

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Sourajit Aiyer
Author: Sourajit Aiyer
Sourajit Aiyer does communication assignments for end-clients like sustainability organisations, NGOs, development agencies, multilateral institutions, etc. as part of his practice at South Asia Fast Track. Previously, he worked with Sustainable India Finance Facility (UN Environment), Motilal Oswal Financial, UBS London, Evalueserve & Grameen Bank Bangladesh. He has written 3 Books on South / Southeast Asian economies, and 130+ articles for 60 publications of 25 countries on climate change, sustainability, development, agriculture, business strategy, capital markets & politics. He has given 30+ guest-talks & conference presentations across 8 countries, curated panel discussions, and been invited to participate in TV News shows, panel discussions & print news-interviews. He has sourced over 40 interviews for South Asia Fast Track.
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