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IN PARTNERSHIP WITH:

CHINA’S
INSATIABLE
APPETITE FOR
CHANGE
AN OVERVIEW OF THE COUNTRY’S EVOLVING FOOD SECURITY STRATEGY
Table of Contents
Introduction PAGE 1

China’s 5 Challenges PAGE 4

China’s Guiding Principles PAGE 7

Collaborative Solutions PAGE 9

Conclusion: A Call to Action PAGE 16

End Notes PAGE 18

PROUD TO SPONSOR THE


This white paper was created by Fortune Industry
Perspectives and DuPont. It is the first of a series
showcasing sustainable development thought
leadership, which will help inform the discussions
at the 2013 Fortune Global Forum, June 6–8, 2013, in Chengdu, China.
For more information on sustainable development in China, please visit
www.cnnmoney.com/sponsoredinsights/dupont
Feeding its
burgeoning
population is one
of China’s top
priorities.

Introduction
I
T WASN’T SO long ago that parents in encourage food production, and a willingness
Western nations reminded recalcitrant to embrace cutting-edge scientific advances.
children that “people were starving in Aware that its own know-how was limited,
China.” This admonition to reluctant China has welcomed science-driven compa-
eaters was based on harsh realities. For nies like DuPont for food security expertise
much of its history—and as recently as the that has helped transform it into a showcase
1970s—China was the setting for recur- of agricultural production and improved
rent famine and starvation. But in a little nutrition.
more than a generation, the country has “We believe that in a time of development,
transformed itself into a model for a world especially when China is now in a transitional
increasingly concerned about feeding an phase, R&D and innovation will lead China
exploding population. China’s journey from a from its current economic structure to where
state of persistent hunger to a net exporter its 12th Five-Year Plan wants it to be,” says
of food is a success story that offers impor- Tony Su, President of DuPont Greater China.
tant lessons for the rest of the world.
China’s transformation is the result of
long-term planning, consistent policies to 1
“And science and technological R&D for sus- Holding Company Limited in Shenzhen in
tainable solutions is the only way to go.” 1988, it has forged 50 wholly-owned subsid-
The Asian nation’s success has reper- iaries and joint ventures to serve the domes-
cussions far beyond its own borders. With tic marketplace in these same three areas,
nearly one in five of the world’s population, among many other business sectors. Among
China’s demand for food affects an intercon- its flagship operations is its R&D center in
nected global economy and a worldwide Shanghai that focuses on product develop-
supply chain. Its purchases of wheat and ment and materials testing. Its interactions
soybeans in the 1990s raised prices around with the Chinese government offer an ideal
the world, and gave a boost to economies as spotlight for the company to demonstrate its
far-flung as Australia and Brazil. Today, its commitment to science, collaboration across
moves toward self-sufficiency and its invest- borders, and the evolution of locally based
ments in farmland abroad are also having an solutions to problems that have international
impact around the globe. repercussions.
DuPont, a 210-year-old company with a This white paper offers a vision of advanc-
history of doing business with China, is a ing food security through scientific coopera-
global player in agriculture, food, and nutri- tion. Its purpose is to promote a discussion of
tion. Since establishing the Du Pont China the critical collaborative role that multination-
als, NGOs, governments, and other organiza-
tions can play in finding solutions in China and
in many other parts of the world where food
security remains a challenge. With productiv-
ity of the human society at unprecedented
levels, providing citizens with enough to eat is
not a political option—it is a fundamental hu-
A COVETED RESOURCE
man right. China has demonstrated that this
China’s thirst for water is
is an achievable goal for itself, and for many
steadily on the rise.
other countries that face the same obstacles.
While China’s success so far has been
remarkable, it still has a long way to go to-
ward establishing a sustainable food system
for its people. Though it ranks first in world
WATER USE agricultural output1, the world’s most popu-
100 MILLION CUBIC METERS lous nation faces a severe shortage of arable
6,000
TOTAL WATER USE land—a shortage exacerbated by the effects
of climate change and industrialization, as
5,000
5,000 well as rapid urbanization. At the same time,
as China’s people grow richer and more
4,000 AGRICULTURAL USE
urbanized, they are demanding better, safer,
and more nutritious diets.
3,000 The world has much to learn from China
as the country works to reengineer its food
2,000 supply chain—from more efficient farmland
use and better infrastructure to the deploy-
1,000 ment of new bioscience and farm machinery
technologies. China’s challenges are not
0 unique; rather, they are shared by developing
’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10
Source: China National Bureau of Statistics

2
economies around the world and, to some strides toward food sustainability over the past
WHILE CHINA’S extent, by developed economies as well. 30 years. Now the world’s largest agricultural
POPULATION While China’s population of 1.3 billion producer, the country has increased produc-
will grow only modestly—to a projected tion of coarse grain by 114% since 1983, meat
OF 1.3 BILLION 1.5 billion by 2050—the global population is by 395%, and milk by more than 1,100%,

WILL GROW expected to swell by nearly 30%, to 9 billion2.


China has 19% of the world’s population
according to the Organisation for Economic
Co-operation and Development (OECD) 5. And
ONLY MODESTLY, but only 7% of its farmland—an average of China is the first developing country to achieve
just 0.23 acres of farmland per person, com- the UN Millennium Development Goal of
THE GLOBAL WATER USE
pared with the U.S.’s three acres. A steady reducing by half the number of people living in

POPULATION IS loss of farmland from urbanization, deserti-


100 MILLION CUBIC METERS
fication, and flooding may help explain why
extreme poverty and hunger.
The government of China, well aware of
6,000
EXPECTED TO China TOTAL WATER
has been USE up farmland in Africa,
buying the country’s food challenges now and in the
Australia, and New Zealand3 . Much of that future, is pushing ahead with programs to ad-
SWELL BY NEARLY 5,000
5,000
lost farmland has been in areas that were dress them, say experts at the International
30%, TO 9 BILLION. once the country’s most fertile regions 4 .
4,000 AGRICULTURAL USE
Food Policy Research Institute (IFPRI). That
The good news is that, despite its chal- is why current Chinese President Hu Jintao
lenges, China—and all those who play a noted that food security was of vital impor-
3,000
role in feeding its people—has reason to be tance to the national interest in his keynote
optimistic. The country has made remarkable speech at the Asia-Pacific Economic Coopera-
2,000 tion forum in September 2012. He pledged
support to strengthen the food security sec-
1,000 tor. China’s transition from a country of recur-
ring hunger to a showcase for food security is
0
a model for global change.
DEMOGRAPHIC
’00 ’01 ’02 ’03TRENDS
’04 ’05 ’06 ’07 ’08 ’09 ’10

A growing
Source:population isBureau
China National spurring demand
of Statistics
for land to be used for agriculture.

POPULATION LAND USE


BILLIONS MILLIONS OF HECTARES
1.5 130
CULTIVATED AREA - 4.6%

ARABLE LAND -7.5%


1.4 104

+4.3%
1.3 78

1.2 52

1.1 26
PERMANENT CROPS +25.2%

0 0

’02 ’07 ’09 ’02 ’07 ’09

Source: AQUASTAT database - Food and Agriculture Organization of the United Nations
(FAO) JULY, 2012. 3
China’s 5 Challenges
China has five overarching challenges in achieving its long-held goal
of 95% self-sufficiency in basic foodstuffs by 2020.6

1. FOOD AVAILABILITY AND AFFORDABILITY.


“Today, humanity produces enough
food to feed everyone,” Raj Patel wrote in
incentives for grain production, a practice
the government is now moving away from.

Foreign Policy in 2011, “but, because of the


way we distribute it, there are still a billion
hungry.” Poor distribution and the sheer size
2. NUTRITION AND HEALTH. As its population
grows, China’s goal is not only to boost
food production but also to improve nutri-
of global food inventories aren’t the only tional content, increasing the micronutrients
issues, however. Affordability and availabil- and vitamins in staple food products. And as
ity are equally important. High food prices China’s people become more affluent, food
A farmer from cause insecurity on the part of consumers7. habits are changing. Like upwardly mobile
Heilongjang province,
in northwest China,
As recently as 2007-08, a global spike in people everywhere, China’s people want
shows the fruits of food prices fueled instability and unrest in more nutritious, agriculturally intensive foods
his labor. numerous poor countries throughout the like meat, fish, poultry, eggs, and dairy prod-
world, accompanied by hoarding and food ucts, as well as packaged and convenience
trade embargoes. At the same time, low foods compatible with their more urban and
prices can be just as damaging, causing industrial lifestyles. China’s consumption
insecurity for farmers and others involved in of retail food products (as opposed to food
food production and related sectors 8 . grown and consumed locally) is rising by a
Global food prices are nearly certain to remarkable 11% a year, according to Busi-
rise over the next 15 to 20 years, says the ness Monitor International. Maintaining a
Food and Agriculture Organization of the healthy, balanced diet to improve population
UN (FAO)’s Kostas Stamoulis, and they will wellness for the long term is important.
become more volatile. As a result, China and Nutritional food value is a complex issue.
other nations must prepare for inevitable Poor nutrition concerns rich and poor alike.
price gyrations9. “The classical Chinese diet—rich in vegeta-
One measure of real bles and carbohydrates with minimal animal-
prosperity is the percentage sourced food—no longer exists,” Barry
FEEDING THE MASSES of household income spent Popkin wrote in Health Affairs in 200810 . The
China has made great strides in on food, and despite all the consumption of meat went from 6% to 27%
lowering the malnutrition rate
progress, China’s citizens of the Chinese diet between 1965 and 2005,
MILLIONS pay a high price for food. In according to the FAO.
250 2006, Chinese households Not surprisingly, obesity is now a growing
spent an average of 39.8% problem in China, with attendant problems
200 of their income on food, vs. like diabetes and heart disease. According to
13.7% in the U.S. The Global the same article in Health Affairs, one in five
150
Food Security Index, devel- Chinese adults is overweight. Diabetes Care re-
oped by the Economist Intel- cently estimated there were 92.4 million people
100
ligence Unit and sponsored in China with diabetes in 201011. In China
50 by DuPont, shows that China and other developing nations, the diseases of
experienced the least volatil- affluence are closely tied to urbanization and in-
0 ity of any country in agricul- creased demand for processed foods with high
PERCENT OF TOTAL POPULATION
tural production over the past fat and sugar and low nutritional content12.
21.4 14.4 13.1 11.6 11.5
20 years, in part because of
‘90-’92 ‘99-’01 ‘04-’06 ‘07-’09 ‘10-’12 its geographic size but also
Source: State of Food Insecurity 2012, FAO because of heavy government 4
MORE THAN 3. More than 94 million Chinese become ill each

94
FOOD SAFETY. Food safety is a domi- year from food-borne bacteria, according to
nant concern in China. Frequent episodes of a 2011 study in the Chinese Journal of Food
contamination have shaken public confi- Hygiene14 . Pathogen detection is a press-
dence. A survey in late 2010 reported in The ing need. This has created opportunities for
Lancet found that China’s people consider foreign companies, says Hong Yang, senior
MILLION food safety their second-greatest risk in researcher at Eawag, a research center near
daily life, after earthquakes. Highly publi- Basel, Switzerland: “People don’t trust local
CHINESE BECOME cized food scandals include melamine in products, especially when they relate to chil-

ILL EACH infant formula, steroid-contaminated meat,


rice containing cadmium, and cooking oil
dren. Foreign companies and their products
have higher reputations.”
YEAR FROM recycled from the streets13 . Liu Xiumei, a Food safety is in part an infrastructure
researcher in China’s National Center for issue. China has more than 600 million farm-
FOOD-BORNE Food Safety, says the initial safety focus by ers, with an average farm size of less than
BACTERIA. government was on illegal additives because 0.65 hectares (1.6 acres)15 . The diminutive
of the publicity those cases garnered. A size of most Chinese farms means that few
national reporting system set up in 2011 has could survive without government subsidies.
found more common causes of illness. Most are so marginal in economic terms
“From the initial research, we found that that their operators lack the knowledge and
food-borne diseases caused by microorgan- technology to prevent or deal with disease
isms make up about 60% of all reported outbreaks, writes Michael Boddington of
cases,” says Liu. “The problem is more Asian Agribusiness Consulting in Beijing16 .
serious than chemical contamination or According to one small-hold farmer recently
contamination caused by animals or plants.” interviewed in China Today, a man named

CHINA: AGRICULTURAL REGIONS & ZONES

CORN-
KAOLIANG-
3 SOYBEANS

1 SPRING
WHEAT CORN-KAOLIANG-
WINTER WHEAT

PASTURE = Areas most


MILLET-CORN-
WINTER WHEAT 6 heavily cultivated
5 1. Gansu & Xinjiang
2. Qinghai-Tibet
2 SICHUAN 3. Inner Mongolia &
RICE
along the Great Wall
RICE-
TEA 4. Northeast
7 5. Loess Plateau
8 6. Yellow River, Huai River
SOUTH/ & Hai River
WESTERN
RICE DOUBLE-CROP RICE 7. Southwest
9 8. Middle & lower
reaches of
Yangtse River
Sources: Columbia University, Prof. Hu Zizhi & Dr Zhang Degang 9. South

5
is hybrid, the level of their
resistance to disease, pests,
and temperature swings var-
ies. The nation also needs to
improve quality standards in
crop harvesting and storage.
There is an especially critical
need for ingredients that
increase product shelf life by
protecting food against yeast
and mold for longer, as well
as better food packaging
that lowers the risk of food
decay, contamination, and
leakage during transit and
on the store shelf.

A woman carries
vegetables from a
5. SUSTAINABLE AGRICUL-
TURE. While expanding the
village market in
Yunnan province. food supply, China must re-
engineer farming, infrastruc-
ture, storage, and waste
while improving and preserv-
Liu Shili, small-scale farming operations ing farmland and water resources. As part
often contribute to the abuse of agricultural of its alarming loss of arable farmland and
chemicals17. Related challenges include water resources, northern China has been
counterfeiting, use of cut-rate pesticides, hit with historic dust storms and drought
and industrial pollution of land and water. in recent years, and parts of the coastal
Better crop protection and farmer educa- south have suffered unprecedented flooding.
tion will reduce the excessive use of chemi- Adding to China’s agricultural sustainability
cal products and the consequent harmful challenges is its shrinking rural workforce.
residues. DuPont has collaborated with the True, the country has some 600 million farm-
Institute for the Control of Agrochemicals ers18 , but their average age is thought to be
(ICAMA) in the Chinese Ministry of Agri- between 50 and 60.
culture to develop crop safety guidelines. In large part that’s because farming in
DuPont has also introduced Coragen, a China remains largely a subsistence activity.
pesticide with far lower toxicity levels. The average farm size is less than two-thirds
of a hectare (1.6 acres), and these small

4. FOOD WASTE. A recent FAO study


estimates that food loss and food waste in
farms typically consist of a half-dozen tiny,
scattered fields, with farmers commuting
two to three hours a day to reach them all,
China may amount to one-third of its total says Xiaobo Zhang, senior research fellow at
food production. “Such losses are star- IFPRI, who himself grew up on a collective
tling,” declares Zhang Tianzuo, director of farm. Little wonder, then, that China’s rural
farm produce processing at the Ministry young are turning their backs on farm life in
of Agriculture. China’s food loss is vast in favor of industrial and white-collar work.
part because the country must contend
with high temperatures and humidity,
which increase vulnerability to disease and
spoilage. Although 100% of seed in China 6
China’s Guiding
Principles
These four pillars represent the overarching imperatives necessary
to win China’s pursuit of a sustainable food system.

F 2.
OOD SECURITY REQUIRES an integrat- COLLABORATION. Private-sector compa-
ed, holistic approach that includes nies and a broad range of globally and
infrastructure investment, agricul- locally focused NGOs are working in collabo-
tural and economic development, ration to help China achieve food security at
and a host of related factors like increased the national and local levels—NGOs like the
human understanding and interaction. None- International Fund for Agriculture Develop-
theless, science and technology are essential mentment (IFAD), the UN’s Food and Agricul-
parts of that equation. ture Organization (FAO), and the World Bank.
Recognizing the scope of needed change, Together these participants are looking for
China has adopted a principled approach answers that will increase production, reduce
to tackling its food security issue. The goal: waste, fight disease, and deliver nutrition to
to leverage breakthroughs in science and those most in need.
technology and create a sustainable food
system for its growing population. The
private and public sectors are now work-
ing closely together on the Asian nation’s
3. KNOWLEDGE TRANSFER. Agricultural and
efficient food production know-how
must be brought to people and places that
targeted objectives. Spinning out of laborato- need it. The improved yields that farmers
ries across the country are improvements in need come down to things like choice of
everything from seed strains to fertilizer and seed, fertilizers, and how land is managed.
nutritional food ingredients. But that alone In parts of China, as elsewhere in the world,
FOOD SECURITY is not enough. The key to success is igniting small-hold farmers are working with the same

CHALLENGES the adoption of new best practices—modern


farming techniques, food testing, and stor-
planting methods that have been used for
thousands of years, and keep producing and
MAY BE GLOBAL, age—at the grassroots level. eating food that lacks the micronutrients
From a broad perspective, there are needed for good health. Education, outreach,
BUT THE four pillars that represent the overarching and knowledge transfer are vital to enhancing

SOLUTIONS HAVE imperatives in China’s pursuit of a sustain-


able food system that have been noted in the
their productivity and viability.

TO BE LOCAL. government’s long-term strategic plan:


4. SUSTAINABLE SOLUTIONS. In China and
elsewhere, solutions have to be sustain-

1. INNOVATIVE LOCAL SOLUTIONS. Food


security challenges may be global, but
the solutions have to be local. Food needs to
able in the broadest sense of the word. This
principle encompasses how food is produced,
how it gets to market, even how it’s served on
be grown and produced close to where it is people’s plates. The food supply must expand in
most needed. Science can provide universal accordance with social, economic, and ecologi-
answers, but wide variations in environment, cal factors such as infrastructure, storage and
soil and culture, food manufacturing practic- waste, and water quality preservation needs.
es and preferences, and transportation and
distribution call for local solutions. Govern-
ments need to develop policies to catalyze
the adoption of best practices developed by
scientific know-how. 7
The 21st-century food supply must continu- The secret of China’s success in address-
ally expand—in China and elsewhere—but ing its food needs reflects effective long-
the resources to grow and distribute food are term strategies. Investment in science and
finite. We must use them as efficiently as we technology has helped the country make huge
can and apply inclusive scientific innovation. leaps in agricultural production in the past
Sustainability encompasses social, econom- 25 years, and those investments are ongo-
ic, and ecological considerations, such as ing. China plans to spend more than 4 trillion
infrastructure, storage, waste reduction, and yuan ($636 billion) over the decade following
improving and preserving water quality—all 2012 in seed breeding, livestock production,
CHINA IS A of which are essential to achieving food se- and agricultural transportation and stor-

HOTBED OF curity. We face a dilemma of simultaneously


needing to grow food rapidly and to manage
age, according to domestic media 20. And as
attention has shifted to green concerns, R&D
INNOVATION. depleting resources, says the World Business spending has also focused on irrigation, water
Council for Sustainable Development in a conservation, soil erosion, and desertifica-
2008 report titled “Agricultural Ecosystems: tion, according to a study by Chen for the
Facts & Trends.” British Office of Science 21.
In addition, the government fully recognizes
THE CASE FOR OPTIMISM the importance of partnerships and collabora-
One reason to be optimistic about China’s tion with those who can bring cutting-edge
food security in coming years—and indeed, scientific expertise to bear on China’s food
the world’s—is the remarkable progress that security issues—leading companies, NGOs,
the country has made to date. Contemporary and academics the world over who are eager to
visitors can scarcely imagine the fragility of participate in helping China develop the right
China’s food supply as recently as the 1970s, solutions to challenges that will ultimately be
when food came from collective farms whose shared by other nations, if they are not already.
local officials controlled everything from DuPont China, established in Shenzhen in
crop mix and farming practices to selling 1988, exemplifies the kind of close part-
prices. Systemic inefficiencies left millions nership China has forged with many of the
of Chinese with diets far below the mini- world’s most innovative companies. DuPont
mum 2,100 calories needed by the average operates through some 50 subsidiaries and
adult19. Today it is estimated that just 10% joint ventures in China, focusing on solutions
of China’s population does not get enough in agriculture and nutrition, safety and pro-
to eat. “For a country of that size with the tection, performance materials, and electron-
recent memory of hunger, that is quite an ics and communication technologies. DuPont
achievement,” says Kevin Chen, China pro- works directly with China’s government, its
gram leader for the International Food Policy customers and consumers, including farmers,
Research Institute. and local and global NGOs, as well as other
A second cause for optimism is that companies, providing more than 300 product
China’s government fully recognizes the chal- families in China—from synthetic fibers to
lenges ahead and is pushing forward with agriculture, from food ingredients to electron-
efforts to cooperate on food security, sustain- ics. DuPont views China as a hotbed of in-
able development, agricultural trade, science, novation. Over the years, it has witnessed the
and development with multinationals, NGOs, nation’s determination to address its major
and agricultural experts. This open approach food problems—and to do so in partnership
has opened opportunities for multinationals with the widest possible range of private com-
including DuPont, Unilever, Sumitomo, and panies and others who possess the greatest
many others to establish relationships with expertise and scientific know-how.
Chinese companies and government agencies
to bring advanced technology to China and
adapt it to local conditions. 8
Collaborative
Solutions
G
OVERNMENTS LIKE CHINA’S don’t act processing techniques more than 2,000
alone in their quest for food secu- years ago. Once again the nation is depend-
rity. They partner with the world’s ing on strong technological innovation to
leading industry experts from enhance its food security. “China, which
both the public and private sector to ignite in three decades has become the world’s
change and achieve their goals. Key to that workshop, is slowly becoming the world’s
success is investing in R&D, and leveraging laboratory because scientific advances are
science and technology. Another is spurring steadfastly encouraged and new technologies
mechanization and teaching local farmers developed,” says Pierre Pagesse, chairman
best practices so there is a transfer of in- of Momagri, a private think tank on global
novation at a grass-roots level. sustainable agricultural policies.
The country now invests less than half of
INVESTING IN SCIENCE the 1% of agricultural GDP recommended by
Science and innovation are, of course, FAO on agricultural R&D and has incentives
important keys to China’s ongoing progress to promote innovation in this sector, accord-
in agriculture. China has a long history of ing to a report by the U.K.’s Government
agricultural innovation, having invented Office for Science. However, in its “Road to
transformational water pumps and grain 2050” publication, the Chinese Academy of
Sciences calls for an increase in R&D spend-
ing to 1.5% by 2020 and 2% by 2050. Also,
private investment in agricultural R&D is
growing rapidly but is still low compared with
that of developed nations (22% as a propor-
INNOVATION ON THE RISE tion of public R&D, vs. 50% in developed
nations) 22.
China has been boosting expenditures on agricultural
R&D to levels recommended by FAO.
GOING LOCAL
BILLIONS OF PPP* DOLLARS
Since food security is a priority for China, cur-
20
rently more than half of government spending
GROSS DOMESTIC R&D (total economy) on agricultural R&D is focused on crops. The
BUSINESS ENTERPRISE R&D**
0
private sector is also heavily committed to
improving food production for future genera-
tions. Companies like DuPont are investing in
15 food-related R&D as well. DuPont is commit-
ting $10 billion23 globally to R&D and intro-
ducing 4,000 new products that will meet
0 local needs for better nutrition, sustainability,
and safety. And the company has focused
on adapting its technologies to the specific
10
needs of China by 2020. “It’s the localization
‘91 ‘93 ‘95 ‘97 ‘99 ‘01 ‘03 ‘05 ‘07 ‘09 ‘10

*PPP is current purchasing power dollar.


**includes public, private and non profit entities
Source: OECD.Stat 9
of science that creates a very powerful im- comes from products developed locally. The
pact in a country or a society,” says DuPont added bonus is that the success of YO-MIX®
Chair and CEO Ellen Kullman. in China led to global distribution in the
In addressing food safety issues specific Middle East, Africa, and elsewhere, an ex-
to the Chinese market, DuPont BAX® System ample of a product developed locally that can
has developed a test for Shigella, a bacteria generate global revenues.
that is one of the three most common causes China’s openness to science and new
of food contamination in China but encoun- technologies has led to numerous cases of
tered far less in other countries. Shigella was collaboration between domestic companies
difficult to detect using traditional culture and agencies and foreign entities. Dr. Harold
processes, says Jason Wang, a DuPont tech- Snyder, who heads DuPont technology in Asia
nology manager responsible for food safety. Pacific, cites China’s fast-growing scientific
“The DuPont BAX® system has great sensitiv- prowess—No. 2 globally in R&D spending,
ity,” says Wang. “In a 5ml sample, as long as No. 1 in published papers in material scienc-
there is even one single bacterium, it can be es and chemistry, and No. 3 in patents—as
detected with our method.” an indicator that such collaborations benefit
Localization can be more than just good both partners. “If I had to predict a country
policy. Products developed locally can that would be a science leader 10 years from
open new markets elsewhere. DuPont was now, China will be on the map,” says Snyder.
concerned about the distribution chain for
mild yogurt drinks popular in China, where Leading examples of science collaboration
cold storage is not always guaranteed. include the following:
The company developed YO-MIX® yogurt • DuPont Pioneer has formed three joint
cultures, which resist post acidification even ventures, one with Dunhuang Seed Co.,
at room temperature. Tony Su, President of based in Jiuquan. Pioneer® brand hybrid
DuPont Greater China, says that a substan- seed has been bred to better withstand
Safety first: An tial amount of his company’s sales in China insect and disease pressure in the local envi-
inspector examines food
ronment, thus reducing the number of tractor
samples to ensure they
meet quality standards. trips over a field during the growing cycle
for cultivation or spraying, thereby achiev-
ing higher yields while also saving fuel and
reducing emissions. This venture is engaged
in R&D, production, processing, and selling
of hybrid corn seed. Chinese farmers who
use hybrid seed say they have enjoyed a sub-
stantial increase in productivity. “In the past,
the harvest was several hundred jin [a pound]
for each mu [sixth of an acre],” says Wang De
Lian, a corn farmer in Qinggang, in western
Heilongjiang province. “[Now] for each mu,
you harvest 1,500 to 1,600 jin.”
• Unilever’s three-year-old R&D center in
Shanghai aims to combine the company’s
expertise in traditional Chinese medicine,
structured materials, and organic chemis-
try to drive unique innovations for Unilever
worldwide. At the same time, it brings the

10
CHINA HAS SET A company’s global strengths in product
safety and sustainability to China. Unilever
rose from $196 million in 2008 to $3.3 bil-
lion in 2012. Chen says mechanization has
GOAL OF has also collaborated with Chinese company progressed more rapidly for certain crops,

70%
COFCO Tunhe, Asia’s largest ketchup manu- like wheat and rice, than for products like oil
facturer, to develop a sustainable agriculture seeds because equipment does not exist for
program that makes minimum use of water, some of these crops, and crops like corn are
pesticides, and fertilizers24 . often grown by small farmers on plots that
• Since 2003, Solae, now a fully owned cannot accommodate farm equipment. He
MECHANIZATION part of the DuPont company, has partnered estimates that crops like wheat and rice are

BY 2020. with Henan Luohe Shineway Industry Group,


the largest meat processing company in
70% to 80% mechanized. Because hold-
ings are small, says researcher Hong Yang,
China, to develop soy proteins that add mechanization and the latest technologies
nutritional quality to meat products for the can make farms viable: “When [others] rent
Chinese market. The two companies opened the land from people who don’t want to farm
a manufacturing facility in Luohe City in and use modern technology, the income can
2007. (DuPont acquired full ownership of its be even higher than working in cities.”
Solae joint venture in 2012.) Soy, a staple of One important role foreign companies play
the Chinese diet, is used in tofu, of course, is exposing farmers to technological options
and soy cooking oil is the preferred oil in like mechanization. DuPont Pioneer realized
Chinese cooking. that while its seeds were significantly increas-
ing yields for Chinese farmers, inefficient man-
INDUSTRIALIZATION AND ual picking contributes to the waste. Globally,
MECHANIZATION according to a survey by the UN’s Food and
Even as the Chinese diet becomes more Agriculture Organization, one-third of all food
complex and demand for agricultural crops are lost or wasted each year. Pioneer
products increases, the number of people worked with a local combine manufacturing
willing to stay on the farm is shrinking. company in Heibei Province to demonstrate
Chen says more and more small farmers mechanized harvesting to local farmers.
see their farm income as secondary to that PepsiCo is partnering with China’s Ministry
from a city job. of Agriculture on a pilot farm in Inner Mongo-
A shortage of labor means a grow- lia, using advanced irrigation techniques to
A symbol of ing need for farm equipment. In order to turn desert into potato farmland. The compa-
mechanization:
a John Deere make agriculture more effective, China is ny is also investing $5 million in efforts by the
combine industrializing its agricultural sector to All-China Women’s Federation to improve rural
improve productivity and access to clean water26.
achieve higher standards. John Deere & Co. has created smaller
Mechanization will play a combines and tractors that suit small farm
key role in accomplishing plots and tightly packed crops in some
this. China has set a goal regions of China, including the shorter corn
of 70% mechanization plants that have been developed for China’s
by 2020, and this year’s soil and climate. In addition, this year the
figures for plowing, sow- company is opening a new manufacturing
ing, and harvesting are facility in northeast China, in Harbin in
expected to reach 55.6%, Heilongjiang province, to support the
according to the Ministry increased demand for large agricultural
of Agriculture 25 . products in the region. The factory—John
To spur the adoption of Deere’s seventh in China—will build midsize
IMAGINECHINA

agricultural machinery, the


government has boosted
subsidies to farmers. They 11
and large tractors, sprayers, planters, and implementing the school milk program, we
harvesting equipment. A major player in the have to adopt advanced technology from
Chinese market since the 1970s, John Deere other countries, their advanced management
has worked closely with local officials to experience, their advanced formulations and
make this project an important priority27. their research results regarding nutrition and
health,” says Jiang. “In this way, we can bet-
NUTRITION ter improve our school milk program.”
A schoolgirl gets China has collaborated In another effort targeting schoolchil-
a nutritional boost
with foreign companies dren, By-Health Biotechnology in Guangzhou
thanks to the
National School to address a two-headed signed a three-year school feeding agree-
Milk Program. nutritional challenge ment earlier this year with the Global Child
in its rapid economic Nutrition Foundation to provide schools with
advancement. There oatmeal porridge fortified with protein and
are still some 130 micronutrients. The product, which will feed
million Chinese who do an estimated 6,300 children in 18 schools in
not receive adequate Guangdong province, will draw on the food
nutrition, according science expertise of DuPont Solae.
to the FAO28 . At the Unilever is also working with global charity
same time, there is the Save the Children, the China Development
problem of the affluent Research Foundation, and the Meishan
segment’s evolving government of Sichuan province to jointly
taste for less healthy foods. carry out pilot projects for mountain village
DUPONT IS China’s heavy subsidies to farmers, ex- kindergartens in Sichuan that will eventually
COMMITTING panding agricultural production, and rising promote infant health, nutrition, and early
incomes from the booming economy have childhood development in Beijing, Shanghai,
$10 BILLION much to do with the dramatic reduction of Sichuan, Yunnan, and Tibet.

GLOBALLY TO R&D hunger over the past decade. But Chinese


officials have also welcomed the involvement SUSTAINABILITY
AND INTRODUCING of private companies and NGOs to tackle is- The Chinese government’s new emphasis
sues of child nutrition and healthy diets. on environmental and sustainability issues
4,000 NEW Some partnerships to address these is defined in the 12th Five-Year Plan. It rep-

PRODUCTS THAT issues go back more than a decade. When


Chinese officials decided in 2001 that
resents a significant shift from the single-
minded focus in the past on expanding
WILL MEET LOCAL they wanted to ensure that schoolchildren agricultural production. One significant step
had an adequate diet, the food company will be to more sustainably use insecticides
NEEDS FOR BETTER Danisco (acquired by DuPont in 2011) and other chemicals. William S. Niebur, Vice
NUTRITION, worked together with Tetra Pac, a dairy President and General Manager of DuPont
machine company who cooperated tightly Pioneer China, says the company has de-
SUSTAINABILITY, with Chinese Ministry of Agriculture on veloped enhanced corn seeds that enable

AND SAFETY. China’s newly created National School Milk


Program. DuPont tested 10 flavored milk
farmers to reduce their pesticide usage,
favorably impacting the environment.
recipes and partnered with Chinese dairy Other steps include the preservation of
companies, including New Hope Dairy, who fundamental resources like water. At its
supplies student milk to 2 out of 12.5 mil- industrial park in Hefei, in central China,
lion children benefiting from the program Unilever has invested more than 14 mil-
currently. Jiang Jianping, a professor at lion yuan in waste-water recycling facilities
the Chinese Academy of Agricultural Sci- where 1,300 tons of reclaimed water can
ences who helped create the national milk
program, says the role of foreign companies
has been critical. “During the process of 12
High-quality seed (bottom),
developed by DuPont
Pioneer®, has helped
China increase the yield of
its corn crops.

a. The elimination of taxes on farm income.

b. Consolidation of farmland and creation


of more specialized farms (farmer professional
cooperatives, or FPCs) to make farming more
SUBSIDIES TO productive and more prosperous. The percent-
age of villages with FPCs rose from just above
FARMERS zero in 1997 to more than 20% today.

SOARED SIXFOLD
BETWEEN 2008
c. Direct subsidies to farmers for grain
production and the purchase of agricultural ma-
chinery, to be directed to the most productive
AND 2010, TO regions of the country. According to OECD data,

$147 BILLION, subsidies to farmers soared sixfold between


2008 and 2010, to $147 billion, making China
MAKING CHINA the global leader. By contrast, producer support
in the U.S. reached just $25.5 billion in 2010.
THE GLOBAL
LEADER,
ACCORDING TO
be processed daily. The company has also
introduced a biomass furnace that could
d. Doubling investment in water conser-
vancy reform and development, including the

OECD DATA. help reduce greenhouse gas emissions by


15,000 tons a year.
development of irrigation systems. The govern-
ment has promoted the expansion of irrigated
In the future, both domestic and foreign farmland, which rose from less than 50% of
investments in agriculture and food pro- cultivated land in 1980 to nearly 60% in 201029 .
cessing can be expected to focus on green
requirements. ENHANCED REGULATIONS
AND STANDARDS
GOVERNMENT POLICY On Feb. 28, 2009, China’s National People’s
China’s government has gone beyond en- Congress passed the country’s first compre-
dorsing collaborations to adopt numerous hensive Food Safety Law. Since then China
policies aimed at shoring up food security has tightened these rules, particularly for
and modernizing its agriculture and food- dairy quality and safety. In June it released a
processing sectors. This is a delicate bal- five-year plan to revamp outdated or overlap-
ancing act, since the country must reconcile ping standards. The country has more than
its policy of market liberalization with the 2,000 national food regulations and more
growing imbalances between its rural and than 2,900 industry-based regulations30.
urban communities. Clearly the 30-year pol- Many overlap or contradict one another.
icy of industrialization and urbanization has The plan calls for coordination among 14
led to a shortage of arable land. Kevin Chen different government departments, including
of IFPRI in Beijing says the Chinese govern- the Ministry of Health, the Ministry of Science
ment has been investing heavily in agricul- and Technology, and the Ministry of Agriculture.
ture and irrigation to ensure the supply of Together they will work to modernize standards
food. “They will need to invest in technology by 2015. The government will prioritize safety
to support productivity growth,” he says. He
lists the following policy priorities:

13
standards for dairy products, infant food, EDUCATION AND
meat, alcohol, vegetable oil, and food ingredi- TALENT DEVELOPMENT
ents to specify limits for dangerous ingredients China and its partners are pursuing multiple
in these foods. It will also set standards for initiatives to educate the rural workforce on
testing contaminants, food ingredients, pesti- new technologies that make farming more ef-
cides, and drug residue in food production. ficient and productive—as well as initiatives
China recognizes that food security can’t to educate Chinese consumers on nutrition
be achieved simply through the creation of and food safety.
policies. The policies also must be imple- DuPont is committed to engaging 2 mil-
mented. The government is partnering with lion young people globally in educational
both private-sector companies and NGOs to opportunities by 2020 and to improving the
bolster agricultural standards, food quality, livelihoods of at least 3 million farmers and
and nutrition. For example, DuPont Pioneer their rural communities by strengthening
is assisting China’s Ministry of Agriculture to agricultural systems. As part of this effort,
build capacity among agricultural profes- DuPont Pioneer has an agronomy team to
sionals and increase technological collabo- help Chinese farmers learn about hybrid corn
ration and information exchange. technology, sustainable farming techniques,
agribusiness, and grain marketing. This
means running more than 200 pilot proj-
ects in China to demonstrate seed varieties
AGRICULTURAL OUTLOOK and technologies for increasing productiv-
ity. Wang Wei, DuPont Pioneer’s Agronomy
PRODUCTION, THOUSANDS OF KILOTONS
Manager, has 22 agronomists working with
RICE MILK
WHEAT SUGAR farmers year-round. “We have seminars in
OIL SEEDS POULTRY the sprouting period, the middle period,
FISH
and the maturation period,” says Wang. “We
also have winter training sessions so that we
can provide farmers with the best planting
120 technology so that they can apply it in their
production.”
Abbott Labs is promoting a unique model
for advancing clinical nutrition in China,
where it established its Abbott Fund Institute
90
of Nutrition Science in 2007, working in part-
nership with Project HOPE and the Shanghai
Children’s Medical Center to address gaps
in pediatric nutrition. Abbott is engaged in
extensive training of local physicians, nurses,
60
and dietitians, and in integrating nutrition
training into local medical school curricula31.
Kraft Foods China won a CSR award last
year from the Rotary Club of Shanghai for its
30 100 Kraft Hope Kitchens, established in part-
nership with the China Youth Development
Foundation. The project is aimed at improv-
ing food supply, nutrition, and nutritional
education for rural Chinese schoolchildren.
0
’85 ’90 ’95 ’00 ’05 ’10 ’15 ’20
Source: OECD, data extracted on 20 Aug 2012 12:05 UTC (GMT) 14
The Kraft Hope Kitchens bring water to arable land. Additionally, at
A New Hope Dairy supply Shanghai children least 100 Chinese agricultural experts are
employee stacks boxes
of milk for China’s
and their teachers with stationed in several research stations within
National School improved nutrition and Mozambique, working with local groups to
Milk Program. nutrition education, in increase crop yield and improve the perfor-
addition to foodstuffs mance of the agricultural sector.
donated by Kraft. To date • Fonterra is the world’s largest milk
the program has reached exporter. The New Zealand dairy farm is
50,000 children, and more known for its technological expertise in this
kitchens are on the way32. sector. It is now receiving Chinese govern-
Better information flow ment subsidies to boost dairy farms in China,
throughout the supply since milk consumption is expected to double
chain is important too. over the next 10 years. To date it has opened
There is often a long chain two large dairies totaling 12,000 cows, and it
of intermediaries between has two more in development, including one
the farmer and the end in Yunan province near Beijing. The goal is to
consumer. Farmers find it produce up to 1 billion liters of high-quality
hard to foresee demand for different types milk by 2020 33 .
of crops, and their guesswork inevitably • Australia and China are cooperating on
results in scarcities of certain foods and ways to open Australia’s Northern Territory
excesses of others. DuPont’s Grower Man- for farming. Australia’s Trade and Competive-
agement Program issues credit cards to ness minister, Craig Emerson, initiated a joint
View the video of farmers that track their purchases and will study with China’s commerce minister, Chen
DuPont’s contribution to enable the company to better understand Deming, last May to examine policy changes
food security in China. the needs of the 8 million to 10 million farm- needed to facilitate large-scale investment by
ers it serves. Chinese agricultural interests. This benefits
both countries, since it will help Australia in
INNOVATIVE APPROACHES economic development while helping China
China is looking at numerous innovative bolster food imports34 .
approaches to achieving food security, in- • China is looking to the private sector
cluding foreign investment in land and R&D to develop innovative technology solutions
in such places as Africa, Australia, and New tailored to its particular market needs. For
Zealand. Its goal is to develop deeper trade example, to help with China’s food waste
ties with key countries to secure a pipeline challenges, DuPont Packaging is working with
of food supply for future generations. No- TetraPak and a local packaging company to
table long-term ventures: develop custom resin applications that meet
• Over the past six years, China has put specific market needs.
down agricultural roots in Africa and has • Investing in biotechnology is a key part
invested $3.5 billion in the sector, accord- of China’s agricultural reform strategy. The
ing to Standard Chartered Bank. But over government is steadily increasing its invest-
the next few years, it has pledged to provide ment into bio-crops to boost yields, working
up to 3,000 experts for technical assis- with such organizations as the International
tance and training, as well as to train 2,000 Service for the Acquisition of Agri-biotech
African agricultural technicians and set up Applications. Its National Transgenic New
14 agricultural centers. China’s investment Variety Development Project includes invest-
in Mozambique illustrates this commitment. ment in this sector35 .
Through a series of agreements, it has
pledged $800 million to modernize Mozam-
bique’s agricultural infrastructure and has 1
financed the building of a dam and canal to 15
in population, urbanization
has literally changed China’s
landscape with a loss of
some of its best farmland,
or about 6.5% of its total
arable area. Other concur-
rent forces are also at work,
including rising demand for
water and increasing inci-
dence of drought in southern
China due to climate change;
the loss of local farmers to
city centers; and changing
dietary habits of a more af-
fluent middle class.
But China has made its
A key link in
the food chain: remarkable progress despite
A Chinese pig these challenges because
farmer relies
the government has made
on corn to feed
his stock. investing in food security a
national priority. It increased
its spending on agricultural
R&D from $403 million in

Conclusion:
1986 to $4 billion in 2008. Looking ahead,
it plans to invest more than 4 trillion yuan
($636 billion) over the next decade in seed

A Call to Action
breeding, livestock raising, agricultural trans-
portation and storage, irrigation, and better
use of fertilizers, according to domestic

A
media. In addition, efforts are under way to
CONFLUENCE OF CONCURRENT forc- preserve farmland for future generations.
es has made this an opportune That’s because sustainability is crucial if any
time to study China’s path toward long-term strategy will succeed.
food security. Over the past three That has not meant that China has been
decades, the nation has made great strides insular and focused only on developing its
in boosting agricultural output, improving domestic market. As a member of the World
food standards and quality, and developing Trade Organization, it recognizes that it is
technology to meet the nutritional require- just one piece of the global food puzzle. So
ments of its growing population. Govern- it has gone beyond its borders to invest in
ment-led reform that has turbocharged the farmland and technology ventures around
economy has helped propel these changes. the world—from Africa to Brazil to New
So has the transfer of technology and know- Zealand—to begin to develop an international
how. The result is that today China is the approach to the challenge at hand. The inter-
world’s largest agricultural producer, and esting twist is it’s a pay-it-forward strategy.
the proportion of Chinese suffering from While forging cross-border relationships that
hunger and malnutrition has dropped from can help extend access to the additional
21.4% in 1990 to 11.5% in 2012, according farmland it needs for future generations,
to the FAO36 .
Progress has been made amid sweep-
ing demographic shifts. Besides a boom 16
China is also transferring its own science al technologies, biotech, and nutrition present
and know-how to other emerging-market business opportunities for science companies
The multiplier effect: countries so they, too, can move up the food like DuPont. With so much at stake, says
Corn farmers like the
chain and contribute to global food security. Niebur, “the opportunity to participate in the
one shown here are
reaping the benefits from These policies have paid off in real greatest transformation of agriculture that will
Pioneer® brand seed and improvements in the stan- occur in this century, is unique and important
mechaiized planting.
dard of living for ordinary for DuPont.”
Chinese and new levels of As China expands its capabilities and
expectation from custom- capacity, there will be opportunities for NGOs,
ers. “We must innovate SOEs, private sector and academia, with ex-
locally from the Chinese pertise in agriculture, nutrition, and the food
perspective to satisfy chain. Groups that bring global resources to
future needs,” says Tony bear in solving local issues, through inclusive
Su, President of DuPont innovation, will generate sustainable solutions
Greater China. to these most pressing issues.
William S. Niebur of The time is ripe for the international
DuPont Pioneer recalls community—and multinationals in particu-
meeting a Chinese farmer lar—to follow the lead of other institutions
whose small farm in Jilin that are collaborating with China to make its

THE PROPORTION Province produced just enough corn to fill


his crib. His dream, the farmer confessed,
agricultural and food sectors more sustain-
able. These trailblazers recognize that their
OF CHINESE was to fill the corncrib twice over. Using a investments will have a multiplier effect for
Pioneer® brand seed and attending some the citizens of the world. That’s because
SUFFERING FROM seminars, he was able to do that within a few problems solved in China often offer solu-

HUNGER AND years. With the profits, he was able to afford


to send his son to secondary school, and
tions that can be applied in other countries—
with the necessary local cooperation and
MALNUTRITION the son was able to find a job in Jilin City. adaptation. China’s openness to science and
But the son now comes home on breaks and new technology makes it an ideal laboratory,
HAS DROPPED holidays to help with the harvest, maintaining but with a market size that provides powerful
FROM 21.4% IN 1990 the family tie between rural and urban China. incentives for companies to innovate. China’s
The Jilin farmer’s story encapsulates many of success in addressing these problems, and
TO 11.5% IN 2012, the objectives and the impact science-based its handling of partnerships with a wide range

ACCORDING TO solutions can have on China’s quest for food


security. This form of inclusive innovation
of entities—including NGOs, foreign compa-
nies, and local governments—has made it an
THE FAO. generates positive benefits on improving the important benchmark for some developing
human condition globally. nations that are still struggling to solve many
This rapid evolution of living standards of the same problems.
has emboldened Chinese consumers to The next step for China is to spark a global
insist on a wider range of foods, better dialogue—one that engages every stakeholder
nutrition, safer products, and economic in discussion and debate about the broad
development that won’t worsen the environ- range of food-security issues and possible
ment and further deplete natural resources. sustainable solutions. An integrated national
The government has responded with stricter approach that is able to knit the myriad
standards for food safety and greater crop industry initiatives under way is needed. After
varieties, and opened the door for foreign all, the country’s efforts to achieve food secu-
companies to bring to China scientific rity are, in effect, doable only if all the parties
knowledge that can be adapted to the spe- work together toward a common goal.
cifics of the local environment.
At the same time, China’s considerable 1
and continuing investments in new agricultur- 17
END NOTES
1 OECD-FAO Agricultural Outlook 2012-2021 “Agricultural R&D as an engine of productivity growth:
2 U.N. World Population Prospects: The 2010 Revision China,” by Kevin Chen and Yumei Zhang, for the British
3 Corn and Soybean Digest, April 20, 2011 Office of Science
4 “Protection of farmland enhanced,” China Daily, 22 “Science & Technology in China: A Roadmap to 2050,”
May 12, 2012 Chinese Academy of Sciences, 2010
5 OECD-FAO Agricultural Outlook 2012-2021 23 http://www2.dupont.com/media/en-us/news-events/
6 “China National Food Security Mid-term and Long-term february/goals-world-population.html
Plan, July 2008 24 Shanghai Daily, August 15, 2011
7 “Can the World Feed 10 Billion People?” by Raj Patel, 25 Ministry of Agriculture, China, statistical release
Foreign Policy, May 4, 2011 26 China Daily, Sept 7, 2012
8 “Do Price Increases for Staple Foods Help or Hurt the 27 Wall Street Journal, Feb 23, 2011
Rural Poor?” by M. Ravallion, World Bank Policy Research 28 FAOSTAT
Working Paper Series, March 1989, n.167. 29 National Bureau of Statistics, China
9 A Special Report on Feeding the World, The Economist, 30 USDA FAS and NPC China
February 26, 2011 31 China Daily, July 13, 2009
10 “Will China’s Nutrition Transition Overwhelm Its Health Care 32 China Daily Nov 23, 2009
System And Slow Economic Growth?” by Barry Popkin, 33 China news releases
Health Affairs, July/August 2008, vol. 27, no. 4 34 Emerson in China for services trade promotion and
11 “Type 2 Diabetes: An Epidemic Requiring Global Attention free-trade talks, May 27, 2012, Australia Ministry of Trade
and Urgent Action,” Diabetes Care, May 2012 and Competitiveness
12 “Diabetes saps health and wealth from China’s rise,” 35 Biotech Facts and Trends 2012, China, ISAAA ( International
The Lancet, June 16, 2012 Service Acquisition for Agri-Biotech Applications)
13 “China’s invisible burden of foodborne illness,” www.isaaa.org/resources/publications/biotech _
The Lancet, May 3, 2012 country _ facts _ and _ trends/download/Facts%20
14 “Epidemiological burden of bacterial foodborne diseases and%20Trends%20-%20China.pdf
in China-Preliminary study,” Chinese Journal of Food 36 The State of Food Insecurity in the World 2012, FAO
Hygiene, June 24, 2011
15 Outgrowing the Earth, by Lester Brown, Earth Policy
Institute, chapter 8, “Reversing China’s Harvest Decline,”
2005
16 Irish Times, May 15, 2012
17 China Today, May 5, 2012
18 USDA, Economic Research Service
19 State of Food Insecurity in the World, FAO, October 2012
20 China Daily, March 5, 2012
21 Foresight Project on Global Food and Farming Futures,

18

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