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China fears a food crisis as imports surge

BEIJING - China has become a net importer of farm produce, raising concerns at the highest levels of government about the security of the food supply for 1.3 billion people as land and water shortages put pressure on domestic grain production.

Hu Jintao, China's president, has commissioned urgent studies on food security after evidence in 2003 and this year that China's grain output was dwindling as demand rises in the long term, officials and academics said.

China's growing dependence on western imports comes as trade in agriculture has become one of the most bitterly fought-over aspects of the Doha global trade round. The three biggest exporters to China were the United States, Canada and Australia.

"The leadership is very concerned about food security. They were all young men during the famine of the late 1950s and 1960s. It is not only a strategic issue of dependence on foreign markets for them, it is also a very personal issue of food self-sufficiency," said one academic who advises the government on food security issues.

The latest official figures show an unprecedented deficit in agricultural trade in the first six months of the year.

Total imports of farm produce in the first half of the year rose 62.5 percent to $14.35 billion. Exports totaled $10.62 billion, an 11 percent increase on the same period a year ago.

The United States alone exported $4.96 billion worth of farm produce to China, a jump of 68.1 percent compared with the same period in 2003.

Strategic grain stocks fall
The biggest changes were seen in grain imports as strategic stocks fell because of declining annual harvests every year since 1998. In the first half, China imported 4.1 million tonnes of grain, or 1.8 times as much as in the same period a year ago.

The level of China's national grain reserves is a state secret. But several academics said although the total harvest this year is expected to exceed last year's by a small margin, burgeoning demand would ensure that grain reserves continue to come under pressure this year and possibly in 2005.

Chen Xiwen, a senior state council official, said recently that the deficit in grain production compared with demand this year would be about 37.5 million tonnes.

Another senior official, who declined to be named, said falling water tables, drying rivers and polluted water sources were taking their toll on the productivity of China's fields, making it unlikely that domestic grain production could be increased much. In addition, farmland is being absorbed rapidly by the expansion of cities and industrial parks.

The movement to cities of 10 million to 20 million Chinese each year, the vast expansion of industrial parkland, sprawling networks of roads and railways and other construction have reduced farmland by 6.7 million hectares since 1996 to a total of 123.4 million hectares last year.

Lester Brown, president of the Earth Policy Institute and an authority on Chinese agriculture, said recently that as well as importing wheat, Chinese would start buying foreign rice and corn in years to come. A year or two from now, he said, China might be importing "30 million, 40 million, 50 million tonnes" of grain, more than any other country.

© The Financial Times Ltd 2004. "FT" and "Financial Times" are trademarks of the Financial Times.

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