A report issued by the Intergovernmental Panel on Climate Change (IPCC) on April 13 warned that the effects of climate change, such as global warming and rising sea levels, are real. They are posing serious threats to the world's ecosystems, water supply, food security and eventually global economic production and social systems. As IPCC chairman Rajendra Pachauri put it, "nobody on this planet is going to be untouched by the impact of climate change".
Many of the risks of global warming may be long term and gradual. The long-term impact of global warming on agriculture is supposed to include lower crop yields, a reduction of arable land and a rise in pests and disease. But the actual threat of global warming to agricultural production could be felt sooner through extreme and abnormal weather conditions, which have already occurred in greater frequency.
The world is experiencing more and more natural disasters, from floods and droughts to typhoons. Such natural disasters will inevitably threaten global food security.
Large disaster-prone countries like China and India are particularly vulnerable to climate change. Historically, these two countries have always struggled to produce enough food to feed their teeming millions because of unfavourable land ratios. For them, climate change will no doubt undermine the already precarious state of food security.
China has the world's largest population. It is also the world's largest food producer, accounting for about 24 per cent of the world's total supply. China has experienced bumper grain harvests in recent years, rising from 430 million tonnes in 2003 to a record 602 million tonnes last year. As a result, China has been able to maintain food self-sufficiency at 98 per cent. This is well above the international standard of 95 per cent commonly considered a safe threshold of national food security.
Tapping Mao's experience
China is already highly industrialised, with the agricultural sector contributing less than 10 per cent of total gross domestic product, compared to 39 per cent from manufacturing. However, China's leadership today still takes to heart Mao Zedong's adage: "An economy without strong agriculture is fragile, and a country without sufficient food grains will be chaotic." Ironically, Mao himself totally mismanaged Chinese agriculture. His disastrous Great Leap Forward (1959-1962) gave rise to a great famine.
Since then, the Chinese government has spared no effort to mobilise available institutional and economic resources to support agricultural production. At the beginning of every year, the first policy directive from the central government - known as "the No. 1 Central Directive" - has been concerned with agricultural and rural development.
Take the vintage year of 1957, before the launch of the People's Communes by Mao, and compare it with 2012. During the intervening 55 years, China's population grew by 127 per cent. Yet while the sown area for grain decreased by 20 per cent, output increased by 202 per cent. In other words, Chinese agriculture has succeeded in feeding more than twice the number of mouths since Mao's time.
The difference in output is due to productivity growth (more output per unit of land), which was made possible partly by the government's pro-agriculture policy, such as more investments in agricultural infrastructure. But it was mainly the result of intensifying the use of modern inputs ranging from high-yielding varieties (such as hybrid rice) to the heavy application of chemical fertilisers. China today accounts for 30 per cent of global fertiliser use.
Not surprisingly, the average yields of China's main grain crops today are very high by world standards. Its rice yields, though slightly below Japan's, are about twice those of Thailand and Indonesia. And China's wheat yields are much higher than Australian and United States levels.
Can China relax?
In a sense, China's agriculture over the years has achieved a major technological transformation. It is also becoming increasingly more energy and capital intensive. Viewed from a different perspective, however, this suggests that China's grain production might have also hit its upper limit. Further growth needs to come with even more government support, more reliance on biological breakthroughs, perhaps even the adoption of genetically modified (GM) varieties.
This, coupled with decreasing trends for China's per-capita grain consumption (particularly in urban areas) due to rising income and greater affluence, has raised the issue of whether China should start relaxing its existing policies of high self-sufficiency.
The government could easily ditch its sacred 95 per cent self- sufficiency level and let international trade fill the gap. This is what Japan and South Korea have done. Economic theory will surely support the argument that China has strong comparative advantage in manufactured exports but less comparative advantage in producing more grain.