Transcript Urban food security: prices, tariffs & trade

Who Will Feed
China in the 21st
Century?
Emiko Fukase & Will Martin,
World Bank, 23 November 2013
Issues
• China’s food demand will rise substantially
– Changes in diets towards animal products
• What will happen to production?
• Implications for trade & self-sufficiency
Demand
Econometric Approach
• Based on the experience of 155 countries
• Calculate the cereal equivalents required to
produce diets as incomes grow
• Estimate the relationship between real income
& consumption of cereal equivalents
Cereal equivalents
Products
Coefficients
Bovine Meat
19.8
Pork
8.5
Poultry
4.7
Fish, Seafood
3.3
Eggs
3.8
Milk
1.2
2.5
Estimated demand
US
2
Australia
Italy
Spain
1.5
Brazil
Germany
United Kingdom
Hungary
Mexico
Korea
Japan
1
China
Malaysia
.5
Philippines
Thailand
0
Indonesia
India
0
10000
20000
30000
40000
GDP per capita, PPP (constant 2005 int. $)
50000
CE Consumption
Fi tted CE Co nsumption
.5
1
1.5
2
Chi na CE Consumption
0
10000
20000
30000
40000
Real GD P(PPP) per capita in 2005 int. $ 1980-2009
50000
grows much faster than
food calories
Fi tted Calorie Consumption
China CE Consumption
Fi tted CE Co nsumption
1.5
1
0
0
.5
5000
10000
(tonnes/capita/year)
15000
2
China Calorie Consumption
0
10000
20000
30000
40000
Real GD P(PPP) per capita in 2005 int. $ 1980-2009
50000
Production
Production
z = B0 + B1 XB2 H B3
– where z is CE production per capita, X is PPP
GDP per capita, H is ha of arable land per capita
Rationale
• Agricultural output higher in countries with
greater land per person
• Productivity growth drives GDP growth
– And agricultural growth
Agric CEs vs income
China Production
Production adjusted at China Land Level
Fitted CE Consumption
4
China Consumption
2
3
Production (China: land=.21 ha)
Germany
Malaysia
US
Hungary
1
Brazil
Italy
Spain
Korea
United Kingdom
Japan
0
China
Thailand
Philippines
Indonesia
Mexico
India
Australia
0
10000
20000
30000
GDP per capita, PPP 2005 int. $
40000
50000
Arable land per capita
1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
Japan
Korea
India
China
World
Brazil
USA
.5
1
1.5
2
China– net import phase
0
10000
20000
GDP per capita, PPP 2005 int. $
China consumption
1980- 2009
Chi na producti on 1980- 2009
Shi fted production l ine
Shifted consummption line
Consumpti on Line
Production line
30000
Some Policy implications
Most imports animal feed
• Direct per capita consumption of grains is falling
especially amongst rural consumers
– Protection of staples would hurt the poor
– Also create inefficiencies in agriculture that increase
import demand for animal feeds
• Protection of animal feeds would slow
development of modern livestock sectors
– May create a need for imports of staple foods
•
or for imports of meat
300
250
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Decline in rural grain
cons, kg/capita
Grains
Vegetables
Protein Foods**
Cooking Oil
Dairy Products
200
150
100
50
0
Raising farm incomes
• Critical problem given rural-urban income gap
• Higher prices have only a temporary impact
– And hurt many poor consumers
• A dynamic problem requiring:
– increasing productivity,
– reduced barriers to outmigration,
– Improvements in rural infrastructure
– farm mechanization & consolidation
• A huge agenda
Conclusions
• Demand for food to grow rapidly
– Calorie consumption to grow only slightly
– Rapid rise in consumption of livestock products
• Which require more cereal– due to feed conversion
• China’s land endowment well below world
average– but far above Japan/Korea
– Production growth to catch up as demand slows
– Appears that China will (mostly) feed China
• Farmer incomes increased sustainably by
mechanization, raising productivity & farm size