By Cheng Guoqiang, Information Center of DRC

Research Report No 134, 2013 (Total 4383)

I. Why Should the Global Agricultural Development Strategy Be Implemented?

The global agricultural development strategy means to comprehensively take such strategic measures like direct trade, diversified import, overseas agricultural investment and new-type international cooperation in agriculture, actively tap global agricultural resources, effectively use international agricultural market, profoundly integrate the global industrial chain of agricultural production, processing, logistics, marking and trade, and establish a sustainable, stable and safe global agricultural product supply network catering to the national grain security strategy, with the global-perspective-based national grain security strategy as the basic goal and the better coordination of the domestic and international markets and resources as the key task.

The implementation of global agricultural strategy has a far-reaching significance for China.

First, it is a strategic demand to ensure national grain security and effective supply of key agricultural products. As aforementioned, in one to two decades to come, along with the constant progress of industrialization and urbanization, increasing population, and upgrading grain consumption structure caused by higher income, China's agricultural product consumption will present a rigid growth trend. To the contrary, the contradiction caused by scarcer agricultural resources; in particular, along with tightened restraint of land and water resources and degrading comparative advantage of agriculture, the allocation of resource factors will be increasingly shifted to non-agricultural sectors with high efficiency and better benefits. That means the growth of domestic agricultural product output may fall behind the consumption demand, while it is neither possible nor realistic to realize self-sufficiency of grain and other agricultural products.

Research findings show that if China does not depend on imports, pure self-sufficiency of agricultural produces would require over 3 billion mu (15 mu make one hectare) of sowing land, while the available domestic sowing land is only 2.4 billion mu, presenting a gap of about 20% which could not be narrowed with the present agricultural resources and technology. Therefore, great resource, environmental and economic cost would be paid for the ignorance of the large population and scarce land resources in China and over reliance on domestic resources to ensure all agricultural product supply. Given that, strategically speaking, it is unavoidable to import agricultural products from foreign countries and use overseas agricultural resources to ensure the national grain security and the effective supply of major agricultural products, and it is urgent to formulate and implement the global agricultural strategy and establish a sustainable, sound and safety global agricultural product supply network.

Second, China should further open its agriculture sector to the outside world and coordinate the domestic and foreign markets and resources. It is an important component part of China's more active opening up strategy to further open its agriculture sector to the outside world. That requires China to be more active in expanding the opened agricultural fields, improve the structure and quality of such fields, and gradually enhance the scope and depth of opened agricultural fields. The implementation of the global agricultural strategy is the direct embodiment of the further opening up of agriculture and an important way to coordinate the domestic and foreign markets and resources. In particular, overseas agricultural investment and cooperation as well as other strategic measures can not only fully tap the agricultural resource advantage of the globe, cater to the strategic benefits of countries with rich agricultural resources, especially developing countries, promote developing countries to improve the self-sufficiency of grain and agricultural products and enhance their capability to deal with grain risks and ensure grain security, but they are also significant to maintain a stable and sound global grain market, eliminate poverty across the world and establish a new global order of grain and agricultural development.

In addition, they are important moves to develop good-neighbor and friendship relations with other countries, especially with neighboring countries and establish a new-type global governance structure in the new situation of political power restructuring across the globe.

Third, there are a sound international agricultural resources basis and development potential for launching the global agricultural strategy now. According to research findings, global agricultural resource development and technological progress still enjoy a great potential. As calculated by the FAO, there are over 1.4 billion hectares of arable land in the world, including more than 1 billion hectares¹ suitable respectively for growing paddy, wheat, corn and soya bean, indicating a potential yield growth of 8%-10%. The potential for wheat yield growth is mainly from developed countries and transition economies, while that for paddy, corn and soya bean is mainly from developing countries. That shows that China still boasts a large room and great potential to implement the global agricultural strategy and deepen its development and utilization of overseas agricultural resources.

II. Basic Strategic Orientation

The ultimate goal of the global agricultural strategy is to establish a national grain security strategic mechanism based on the global perspective, and construct a sustainable, stable and safe global agricultural product supply network. Therefore, the following points are key for the formulation of the global agricultural strategy.

First, the improvement of the comprehensive grain production capability at home is the basis and precondition. Necessary regulation and control measures should be taken to further improve the grain support and protection system as the core, strengthen and improve the grain reserve system as the key, improve the agricultural product import and adjustment mechanism as the supplement and build the modern grain market system as the support, so as to ensure the self-sufficiency² of paddy, wheat and other stable grain and form a new national grain security framework featuring "setting foot at home and seeking global supply".

Second, the agricultural "go global" strategy should be implemented to encourage enterprises of various kinds to increase their overseas agricultural investment and get involved in international agricultural trade and cooperation, explore and form the diversified agricultural product import adjustment mechanism, and establish a sustainable, sound and safe global agricultural product import system.

Third, the international cooperation on agriculture should be deepened and expanded, with the focus on agricultural aid³ to and cooperative development of agricultural resources with developing countries or regions, to enhance their capability of self-sufficiency and export. China should intensity its trade and investment cooperation with developed countries with abundant agricultural resources, actively participate in their comprehensive agricultural development and the construction of the global supply chain, and increase the effective supply of global agricultural products through diverse ways; and it should also spare no efforts to advocate the concept of "global responsibility" to protect the right to food, hold that major agricultural resource countries and major agricultural products exporter should shoulder corresponding duties and responsibilities to maintain stable agricultural production and products supply, reduce the shock of biomass energy on the supply and price of agricultural products in the global market and safeguard the basic right to food for people of the world.

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¹Repeated calculation occurs for different species.

²Please refer to China's Grain Regulation and Control: Goal, Mechanism and Policy by Cheng Guoqiang (2012) for the approach of ensuring grain security by relying on the domestic market. No detailed discussion is given in this paper.

³This paper holds that the major forms of the agricultural aid should focus on technical aid and agricultural infrastructure aid such as the promotion of demonstration projects, the dispatch of experts and the development of human resources with assistance loans and the donation of agricultural materials as a supplement. Please refer to the following sections for detailed analysis.