Xi’s food security drive could end up backfiring for Chinese farmers

By Hallie Gu |

President Xi Jinping’s government has just one answer: sow more soy.

In the latest drive to bolster food security in a nation that accounts for about one-fifth of humanity but only one-tenth of its arable land, China is pressing farmers to increase soybean production, using a combination of subsidies, government stockpiling and public pressure. Like generations of Chinese leaders before him, Xi sees the country’s reliance on food imports as a national security issue and soy is one of the weakest links.

“Food security’s gotten more important,” said Darin Friedrichs, cofounder and market research director of Sitonia Consulting, a China-based agricultural information service provider. “It was always important when it came to basic grains like corn, wheat and rice. But now the concerns are extending more into soybeans.”

Yet the risks of those policies, even when they serve Beijing’s goals, fall heavily on millions of farmers like Zhang: last year, following the advice of her local agricultural bureau, she grew soy alongside her regular corn crop, but the herbicide she used on the soybeans killed off the corn.

“Basically the soybeans were planted for nothing,” Zhang said.

Those kinds of tradeoffs won’t stop the government’s drive. A trade war with the US, as well as disruptions to food supply chains from the Covid-19 pandemic and Russia’s war

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Bill Clinton Clinton’s approval rating was 47 percent when he announced that he would run for reelection on April 14, 1995. Democrats had suffered a wipeout midterm election in 1994, leading some to question whether Clinton would be a one-term president. But he rebounded with the help of a growing economy, and he defeated Bob Dole, a Republican. George W. Bush in Ukraine, mean China is doubling down on efforts to bolster domestic food production.

China’s government for decades has struggled to balance competing demands when it comes to food production, with sometimes devastating consequences. The Great Famine of the late 1950s and early 1960s killed tens of millions after Communist Party Chairman Mao Zedong sought to mandate collective farming and food distribution.

It’s a period many in China’s older generation—including Xi—still have memories of. The “people’s rice bowl” must be firmly held at all times, Xi said in 2013. At the same event, he discussed how he could only drink soup for dinner during three years of “natural disasters,” because there was not enough food.

“We can’t forget about the pain after the scar heals,” Xi said.

Today China relies on imports for over 80% of its soybean consumption, with those purchases concentrated in a few key countries led by Brazil and the US. The nation’s low self-sufficiency for a crop used in everything from animal feed to cooking oil is seen as a critical vulnerability, according to the government. In staples like wheat and rice, China is generally able to feed itself, though imports of wheat have been surging.

Cheaper imports

THE economics of Beijing’s approach

The September 11 attacks of 2001 led Bush, a Republican, to invade Afghanistan, followed by another war in Iraq. One month after US forces entered Baghdad, Bush announced he would run for reelection on May 16, 2003. His approval rating was 69% that month. He defeated John Kerry, a Democrat.

Barack Obama Obama, a Democrat, had a 48 percent approval rating when he announced his reelection campaign on April 4, 2011. He struggled to convince Americans that the economy was improving after the financial col-

‘Grain security risk’ aren’t favorable. For the plan to work, the government needs soybeans to be expensive enough to induce planting, but cheap enough to lure soybean crushers into buying from local farmers. Yet as of April, imported beans were more than 20 percent cheaper than domestic beans. And soybean crushers have been struggling to make a profit processing even the imported beans, due to weak domestic demand from pork producers. lapse and subsequent recession, but he ultimately defeated Mitt Romney, a Republican.

That means the extra beans China managed to churn out last year struggled to find a market. With output in 2022 surging more than 20 percent, domestic soybean prices fell 15 percent since harvest time and have remained low. The government blamed the drop on a larger domestic crop than expected and weak demand.

Domestic soybean futures traded on the Dalian Commodity Exchange fell to the lowest since October 2020 in trading Friday ahead of a long holiday weekend. Government stockpiling efforts were expected to come to an end in April, likely reducing future demand even further.

With the government pressing forward on its plans, every hectare of soybeans could mean less planting of more productive corn crops, requiring more imports.

China’s soybean yield averages 130 kilograms per mu (0.07 hectare), a unit of measurement common in China. That’s far below the productivity found in the US or Brazil, and compares with 430 kilograms for a similar-sized plot of corn. The government is working with different regions on soybean varieties it hopes will boost productivity, but the goals are still a long ways away from being competitive.

Donald Trump Trump, a Republican, announced that he would run for reelection on June 18, 2019. The previous month, his approval rating was 41 percent. He was impeached for the first time at the end of the year, and then the coronavirus pandemic stalled the economy. Joe Biden, a Democrat, defeated Trump, who tried to prevent the peaceful transfer of power.

Joe Biden

F OR now, “with lower yields, it means that these soybean seeds are reducing productivity” compared to other food crops, said Ma Wenfeng, a senior analyst at Beijing Orient Agribusiness Consultants. “If you expand planting of these seeds, you are creating bigger food security issues.”

The data show that shift may already be under way. China’s corn imports more than doubled to a record in 2020, and then nearly quadrupled in 2021, according to US Department of Agriculture data. That move came as more farmers switched to growing soybeans from corn in the top growing regions. “Planting more soybeans, and less higher-yielding corn, doesn’t that imply a higher grain security risk,” asked Ma.

With the new planting season about to kick off, soybeans still don’t look commercially attractive, farmers, analysts and traders said.

In the northeastern province of Heilongjiang, farmer Wang Lei has decided to double his corn planting this year to about 400 mu, which converts to about 27 hectares.

“I am not considering soybeans as output is low and profits not as good as corn,” Wang said.

He’s not alone.

“Planting intention is not looking great for soybeans, as the profits are still thin,” said Bian Tingting, an analyst with Mysteel Group, a commodities-focused data service. “Demand is very flat and there is no sign of that improving immediately—if the stockpiling stops, prices are expected to drop further.” With assistance from James Poole and Sanjit Das / Bloomberg

Biden announced his reelection campaign on April 25. His approval rating was 40 percent the previous month. Biden would be 86 at the end of a second term, leading to fears that he’s too old to keep such a demanding job.

However, Biden has not drawn any significant primary challengers. The only Democrats running are Marianne Williamson and Robert F. Kennedy Jr. Meanwhile, Trump is leading in Republican primary polls as he seeks the party’s nomination, raising the potential for a rematch with Biden. Associated Press writer Emily Swanson contributed to this report.

Specl Court For Agri Smuggling

SENATORS on Tuesday pressed for the creation of courts especially handling agricultural smuggling, expressing alarm over the impunity with which such crime is being committed and seeking more teeth to a 2016 law designating such type of smuggling as economic sabotage.

I n pushing for such distinct courts all over the country, Senator Cynthia Villar, chairperson of the Senate Committee on Agriculture, Food and Agrarian Reform, said the Anti-Agricultural Smuggling Law will be implemented effectively if there is a court dedicated to smuggling, hoarding, profiteering and cartel of agricultural products.

A ddressing Tuesday’s public hearing of the Senate Committee on Justice and Human Rights on proposed Senate Bill No. 1963 seeking to establish such courts, Villar lamented that even with a law against agricultural smuggling, no smugglers have been charged with economic sabotage.

T he Senate hearing was held jointly with the Committees on Agriculture, Food and Agrarian Reform, and Finance.

“ We intend to create an anti-agricultural smuggling court to ensure that the proper implementation of the law will be made,” Villar said, adding: “We hope that those involved in the courts and the justice department will help us draft a law to implement the AntiAgriculture Smuggling Act.”

R ecalling that Congress in 2016 passed Republic Act 10817, now known as the AgriSmuggling Act, Villar noted that the cut-off amount involved for an offense to be declared as economic sabotage, and deemed non-bailable, is P10 million for rice and P1 million for other agricultural commodities.

A t the same time, she confirmed that lawmakers were also amending the Anti-Smug -