A clear understanding of China’s changing agricultural policy would help make the most of the opportunities in the huge Asian market, a top market researcher says.
Australian Bureau of Agricultural and Resource Economics and Sciences acting executive director Peter Gooday says the Chinese changes involve supply-side structural reform of its agriculture.
The reforms include industrialising agriculture, increasing the size of farms, identifying regions for production specialisation, broadening the range and quality of crops, improving the quality of livestock products and using international markets to complement domestic supply.
Commodity-specific policies include reducing corn production and stockpiles, continuing the market pricing of corn, maintaining production levels of pork, rice and wheat, and raising sheep, goat and beef production.
Other institutional policy adjustments include strengthening international agricultural co-operation and scientific research.
The rise in the real value of food consumption in China will be characterised by a move toward western style diets, with higher intake of high‐value foods, such as dairy products, beef, sheep and goat meat, fruit and vegetables, and a lower intake of starchy staples toward 2050.
Between 2009 and 2050, the real value of beef consumption in China is projected to rise 236 per cent, dairy 74 per cent, sheep and goat meat 72 per cent and sugar 330 per cent in 2009 US dollars, although from a relatively low base compared with developed countries.
Gooday says this will mean new challenges for dairy, grain and meat exporters.
“China is one of the world’s great agriculture producers, importers and exporters,” he says. “What happens in China can affect global agricultural markets.”
“China’s food demand will keep growing and consumption will move towards western-style diets and higher intake of dairy, beef, sheep and goat meat, fruit and vegetables,” he says.
“Improved food safety standards will see an increased demand for meat from countries such as Australia, where high food safety standards are already in place.”
“China is also aiming to increase milk production by six per cent and dairy product production by 28 per cent by 2020,” he says. “For grains, their focus is on improving domestic grain production and the outlook for import demand is unclear.”