Key challenges and emerging policy responses

Recently, the government has launched initiatives aimed at directly strengthening farmers' incomes. In April 2023, the Chinese government allocated 10 billion yuan (about $1.38 billion) in one-time financial subsidies to farmers.[54]However, despite these efforts, attracting younger generations to the farming profession remains a challenge. As recently as 2019, studies showed that the aging population in rural areas continues to weigh on agricultural productivity and negatively impact agricultural wages.[55]

Technology and productivity issues

China's agricultural landscape is uniquely characterized by the predominance of small family farms scattered throughout the country, rather than the large industrial farming models of many developed countries. Although this model is the cornerstone of the Chinese economy, providing jobs for millions of people, the fragmented nature of farms complicates the diffusion of new agricultural technologies and makes it difficult to coordinate among farmers, standardize practices and effective marketing.[56]

To bridge this gap, China launched the National Cloud Platform for Agricultural Technology and Education in 2015. This digital platform promotes knowledge sharing and independent learning among agricultural workers. Farmers provide data on crops, pests and field conditions, and in return, they can access online training courses, diagnostic AI and telephone helplines.[57]Startups specializing in strategic AI technologies can tell farmers which insects they are seeing with a simple image and which pesticides they should use to protect their crops.[58]The central government also sends teams of specialized experts to provinces affected by natural disasters or lagging behind in agricultural production to provide on-the-ground support and promote the popularization of advanced agricultural technologies.[59]

In the early 21st century, initiatives such as the expansion of irrigation systems propelled China's agricultural total factor productivity (TFP) growth from less than 1 percent in the 1970s to an average of 2.48 percent between 2001 and 2010. However, this expansion declined in the years that followed. , as China has not been able to maintain a steady rate of agricultural TFP growth through continuous policy improvements and investment in agricultural research and development (R&D). China still outperforms all other regions except South Asia and the so-called transition countries (former Soviet Union) in terms of agricultural TFP growth, but it will have to work harder and harder to maintain this advantage.[60]China's public sector spending on agricultural R&D was around $6.6 billion in 2021, more than that of India, the United States and Brazil combined. However, in the United States, the private sector accounts for another $15-20 billion, while in China this figure is functionally zero.

In response to the productivity problem, China has adopted R&D solutions. Substantial financial flows have been directed toward hybrid seed technologies, particularly in hybrid rice, corn, soybeans, and wheat. China has also established core areas for the production of certain commodities (e.g., potatoes in southeast China, double crop rice in the Yangtze River Economic Belt).[61]In 2021, amendments to China's Seed Law strengthened the protection of the legal rights and interests of owners of new plant varieties, thereby encouraging seed R&D.[62]

Climate change

China's agricultural sector is highly exposed to climate change. Between 1981 and 2010, climate change and ozone pollution collectively reduced Chinese crop yields by 10 percent, an annual loss of 55 million tons of crops.[63]As temperatures rise, extreme weather events, melting glaciers, environmental degradation, and water scarcity and contamination will intensify the impact on Chinese agriculture.

China has focused on creating resilience and adaptation mechanisms to deal with these challenges and strengthening the systemic response to natural disasters. Throughout the 2010s, China made significant investments in megaprojects aimed at mitigating the effects of climate change.[64]More recently, there has been a palpable shift towards promoting green agricultural development and encouraging farmers to shift to higher-yielding, stress-resistant crops.[65]China is also looking to the oceans to boost its food security, as evidenced by a series of recent initiatives to promote and streamline marine aquaculture. In November 2017, the Ministry of Agriculture unveiled the National Mariculture Development Plan (2017-2025). Under the plan, China aspires to establish 200 marine demonstration ranches nationwide by 2025.[66]In April 2023, President Xi coined the term “blue granary” to describe marine fishing and mariculture, particularly deep-sea fishing and ranching. Shortly after, Chinese authorities issued guidelines on deep-sea aquaculture, a key part of strengthening the agricultural supply chain.

Food waste

Between 2014 and 2018, an estimated 27 percent of all food in China was lost or wasted, which is comparable to global averages.[67]Food waste and loss can occur at any stage of the supply chain, from livestock deaths to crops damaged by improper storage to expired produce thrown away in households.[68]China has made concerted efforts to combat food waste through a series of campaign-style reforms. In August 2020, President Xi Jinping launched the Clean Your Plate 2.0 campaign, modeled after a previous anti-corruption initiative of the same name.[69]Following the Clean Your Plate 2.0 campaign, China introduced the Anti-Food Waste Law in April 2021. This initiative led by the State Council included educational campaigns, regulatory measures against businesses, The introduction of systems to improve procurement, storage and handling practices, as well as methods to increase the efficiency of food production, with appropriate incentives and sanctions.[70]

Geopolitical dynamics

Following geopolitical shocks, including the 2017 trade war with the United States, the Covid-19 pandemic, and the Russian invasion of Ukraine, China has sought to reduce its exposure to external dependencies. This strategy includes accelerating international land acquisition, increasing bilateral and multilateral trade agreements, diversifying international supply chains, expanding overseas agricultural activities through projects such as Belt and Road Initiative (BRI) and encouraging domestic companies to globalize their operations.[71]

While China's acquisition of agricultural land in the United States has attracted attention in Washington, most of its international land purchases are in Asia and Africa. According to Land Matrix, a European land monitoring organization, between 2011 and 2020, Chinese companies bought or leased 6.48 million hectares of land for agriculture, forestry or mining, equivalent to the size of the Latvia.[72]Chinese companies buy arable land in other countries and resell their products to Chinese consumers under individual agreements as well as through BRI projects and other similar initiatives; China has signed more than 100 agricultural cooperation agreements with BRI countries.[73]