How to feed China *without breaking global trade rules*

7 June 2013

FOR IMMEDIATE RELEASE

Contact: Jonathan Hepburn, Programme Manager on Agriculture
Tel. +41 22 917 87 56; jhepburn@ictsd.ch

(Geneva, 6 June 2013) China’s farm subsidies could be used to tackle domestic food insecurity and rural poverty without having a significant impact on world markets, a new study finds. Farm support could also be used to mitigate against environmental challenges.

Key findings of a new study, conducted by Dr. Ni Hongxing, Ministry of Agriculture of China, for the International Centre for Trade and Sustainable Development include:

  • Growing rural-urban inequalities are pushing China to boost agricultural support.
  • Farm support is shifting towards direct payments that minimize trade distortion.
  • Farm policies should incorporate natural resources safeguards.

“Food security means ensuring self-sufficiency of major crops, especially wheat, maize and rice,” observed Dr. Ni.

Feeding China’s huge population remains the biggest challenge of the agricultural sector. Despite the country’s rapid economic growth, the gap between rural and urban incomes continues to increase. In 2010, 97 percent of the poor lived in rural areas, where 670 million people relied on farming as the major source of livelihood. The same year, half of the household had no access to proper roads and many had no safe drinking water.

Following China’s accession to the WTO in 2001, “san nong,” or expenditures on rural development, have increased seven-fold, attracting the attention of the international community. According to Ni, China’s farm policies have secured a steady food supply, improved farmer incomes, while abiding by WTO rules.

Dr. Ni notes that a shift of subsidies from price support to direct payments, preferred under WTO rules, is currently under way for grain. He added that Chinese policy could be “improved step by step”  under the rubric of WTO rules.

In the push to rapidly boost production, environmental  objectives are thought to have been neglected by the country’s farm policy.  Better targeted farm support mechanisms could help to safeguard natural resources and protect against overgrazing, deforestation and climate change, he added.

The study is online here: (http://www.ictsd.org/themes/agriculture/agricultural-domestic-support-and-sustainable-development-in-china)
Notes to editors:
1. The International Centre for Trade and Sustainable Development (ICTSD) is a nonpartisan think tank, based in Geneva, which - by empowering stakeholders in trade policy through information, networking, dialogue, well targeted research, and capacity building - seeks to influence the international trade system such that it advances the goal of sustainable development. www.ictsd.org
2. The World Trade Organization (WTO) is an organisation based in Geneva, Switzerland, which is responsible for liberalising and regulating international trade in goods, services and other areas. It has 159 Members.