Leaders' trip offers glimpse into country's ag impacts

FARGO, N.D. -- The huge nation of China is highly focused on being self-sufficient in the starch crops, such as corn, wheat and rice, but Jim Broten of Dazey, N.D., chairman of the U.S. Grains Council, hopes leaders there see benefits of importin...

FARGO, N.D. -- The huge nation of China is highly focused on being self-sufficient in the starch crops, such as corn, wheat and rice, but Jim Broten of Dazey, N.D., chairman of the U.S. Grains Council, hopes leaders there see benefits of importing even a small part of their needs.

Broten, chairman of the U.S. Grains Council, was among those traveled to China on a recent Monsanto-led Ag Study Mission to China.

The delegation included members of the Monsanto Grower Advisory Council, which includes feed grains, cotton, soybean and wheat organizations. The group traveled Nov. 3 to 14 in Shanghai, Nanning, Guilin and Bejing. The advisory council was established in 2001 to provide strategic advice and guidance to Monsanto and for the benefit of growers as represented by several groups.

Among other things, the Americans heard about the status of generic glyphosate production in China, which is used heavily by U.S. farmers on so-called Roundup Ready crops.

Broten says some speakers said the Chinese government is considering whether to continue allowing what he called "10 percent glyphosate" use in that country. This is a lower-quality glyphosate, but functional, and is the glyphosate Chinese farmers predominantly use it. It is a byproduct to the mainstream glyphosate the Chinese manufacture and sell abroad. It has a higher content of "salts," which concerns some environmentalists.


Banning the use of this product in China would be consistent with U.S. prohibitions for its use. But banning it in China also would mean the Chinese would have to incur costs to get rid of or further process the material. This would both add costs to the other glyphosate currently on the market and would increase demand for the glyphosate that is approved. Both developments could add costs to glyphosate, worldwide, and including U.S. farmers."

The agricultural commodities, their consumer demand and processing as well as government involvement in agricultural research and trade, biotechnology.

Chinese ag goals

As with many countries, there are inconsistencies and paradoxes. Among the take-away messages for Broten are the Chinese goals to:

- Encourage capitalism, but keep political-economic control.

Social unrest is one of the government's overriding concerns. This meshes with an unofficial government policy to counter this is to become 95 percent self-sufficient in staple "starch" crops such as rice, wheat and corn.

"Before, they were trying to be self-sufficient in everything, (and) now backed off in soybeans and cotton" because they're grown all over the world. "With corn, the U.S. is the big player. In wheat, only Australia, Canada, U.S. and Argentina, or the Black Sea area in Eastern Europe are major exporters," Broten says.

- Modernize, but keep traditional, manual farming.


The average Chinese farm size is 0.8 acres. The government owns the land and leases it to farmers, who can't buy more land to expand.

"They are coming up with a plan to let farmers to sublease some of their acres," Broten says.

China has 22 percent of the world population but 7 percent of its arable land. China feeds 10 people per hectare, twice the world average of 4.4 people per hectare. The tour participated in a rice harvest on a typical farm near Guilin, and observed the practice of drying grain on a roadside. Some got their feet muddy cutting rice and then they used a small gasoline engine to thresh out handfuls of shieves at a time.

n Study biotech crops, but are reluctant to use them.

China is investing in biotechnology research but is cautious in approving it for commercial food crops. Only cotton is approved.

"They don't know whether to follow the European model (of biotech caution) or the U.S. model," Broten says.

Tour members visited research gardens near Nanning in Guangxi Province. Provincial Vice Gov. Liang Chen, spoke to the group. Chen, plant geneticist and biotechnology entrepreneur, who studied at Washington University in St. Louis and studied biotechnology with Monsanto early in his career. Chen said Greenpeace, European Union and public perception all are factors in China's cautious approach.

- Research biofuels, but down-shift as needed.


Shi-Zhong li, from Tsinghau University, talked about the country's research to develop biofuels from corn, cassava and sweet sorghum. The government is going forward with research but has put the brakes on commercialization of energy from crops since last year's run-up on commodity prices. Researchers are trying to improve both feedstocks or enzymes through biotechnology, Broten says.

In the past 20 years, China has taken a more prominent role in the global economy, but political and working systems are changing slowly. Broten and the others were briefed on facts collected from a number of U.S. agencies -- primarily the Foreign Agricultural Service, U.S. Agricultural Trade office, the U.S. Consulate and U.S. Embassy.

Notably, China has achieved double-digit annual growth in gross domestic product in the past five years and maintained an impressive 9.4 percent average annual growth since 1980. One expert told the tour that China must maintain 8 percent growth threshold to maintain current economic standards and that there is "no precedent" for the economic slowdown that already has closed many Chinese factories.

By itself, China accounted for a third of world GDP growth in the first half of 2008.

China's GDP ranks fourth in the world after the United States, Japan and Germany.

The country recently surpassed the U.S. as the world's largest trader, and ranks third among U.S. partners.

"China's economic growth is driving increased demand for U.S. agricultural products," Broten says. "They'll continue to import soybeans and cotton, but they want to keep acres up on other crops. We'd like to convince them that they could accomplish their goals and still import 5 (percent) to 10 percent of their needs from us and the world. They're feeding 1.3 billion people -- more than four times the U.S. population, so that's big."

The U.S. has an overall trade deficit with China, but runs a surplus with China in agricultural product trade, especially in soybeans and cotton.


The tour group visited Carrefour, a "hypermarket," a retail store that carries everything from groceries to electronics and brand boutiques -- something akin to the Wal-Mart type stores in the U.S. These new stores have popped up in middle-class and urban areas in the past 15 years. The less urban areas are dominated by traditional "wet-markets," where fish, poultry, vegetable, oils, pork and seafood are purchased.

The group also saw how U.S.-based KFC has introduced its KFC, Pizza Hut and East Downing food marketing into the country.

Jim Rice of Tyson Foods, China, told the group that China appears to be in its final year of protein self-sufficiency. The country is projected to be short of 4.5 million pounds of protein each for the next three years.

The group visited the Huaxia Dairy Farm, the U.S. Grains Council's partner farm in Heibei Province, on the outskirts of Beijing.

Broten says the group came up with several strategies to maintain and grow America's agricultural opportunities in China:

- Continue to improve quality in U.S. farm commodities.

- Convince China that the U.S. is a reliable supplier of corn, wheat and rice, as well as cotton and soybeans.

- Work to influence biotech acceptance (certainly a particular goal of Monsanto, which is one of the world's suppliers of technology).


"If China accepts biotech for their people to eat, they're 25 percent of the world's people," Broten says. "The issue of biotech acceptance won't be over, but we'll be a long way toward acceptance."

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