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CHINA’S
INSATIABLE
APPETITE FOR
CHANGE
AN OVERVIEW OF THE COUNTRY’S EVOLVING FOOD SECURITY STRATEGY
Table of Contents
Introduction PAGE 1
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%,
A growing
Source:population isBureau
China National spurring demand
of Statistics
for land to be used for agriculture.
+4.3%
1.3 78
1.2 52
1.1 26
PERMANENT CROPS +25.2%
0 0
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
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-
CORN-
KAOLIANG-
3 SOYBEANS
1 SPRING
WHEAT CORN-KAOLIANG-
WINTER WHEAT
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
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
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
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,
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
18