Lecture 1

The need for spatially and socially explicit analysis of China’s agricultural development

M.A. Keyzer

Presentation available:www.sow.vu.nl/downloadables.htm

www.ccap.org.cn

Hunger & food consumption

Food Supply, 1960-2000, China and World

0

500

1000

1500

2000

2500

3000

3500

China World

kc

al/c

ap

/da

y

1961/63

1979/81

1999/01

Prevalence of UndernourishmentChina and Developing Countries, 1980-2000

0

5

10

15

20

25

30

35

China Developing World

%

1979/81

1990/92

1998/00

Issues

Can China feeds its animals: Selfsufficiency in cereals, protein feeds and

meat Import of feed Import of meat

China and world trade How will WTO effect the agricultural economy

Major infrastructural works Assess the implications on redirecting water

flows

Chinese specificity

China is not Singapore or Luxembourg

The scale of China and the extensive set of features must be accounted for

The spatial and social diversity to appear in the structure of the model, not only in numbers on population and

surface

Population density

Consumption of meat - rural

Consumption of meat - urban

Consumption of rice

Consumption of wheat

Yield of paddy

Yield of wheat

Area share of paddy

Paddy yield over potential (irrigated)

Infrastructure

Average transport cost (Yuan / TonKm)

Overview of lectures

1. The need for spatially and socially explicit analysis of China’s agricultural development

2. Theoretical background on aggregation: Micro – macro debates

3. Towards a spatially disaggregated AGE-model for the analysis of Chinese agricultural policy

Maps

Information in large databases

Visualization in maps of variables but only one at the time

This obscures underlying relations with other variables

Use flexible forms (parametric and non-parametric) to investigate patterns and anomalies

Data analysis with mollifier

Basic data on grain yields

Yields after data smoothing

Flow of milled rice in China

From maps to models

Incorporate all a priori knowledge of present situation potentials for change

This defines approach in four ways:1. agricultural potentials2. physical balances at farm level3. transport flows between markets4. welfare approach to agricultural policy

Systematic data analysis & preparation is required

Central issue: rise of meat demand

Three mechanisms at play:

1. Meat demand depends on income consumer demand is shifting towards meat and dairy

2. Relation income - meat demand is not linear

large part of the population may still be at low levels of meat consumption: fast growth in medium term: fast growth in medium term: fast growth in medium term

3. Additional feed supply has to come from cereal production or imports

Traditional technologies are not sufficient

From meat demand to feed demand

Three general types of livestock systems grazing systems mixed production systems intensive production system

Within intensive system Backyard production largely relying on

household and crop residuals Specialized households Large commercial units

How does composition of animal systems change in response to increased meat demand ?

How does cereal share in feed change in response to increased meat demand?

GLS-Estimation of meat demand function

b2=8.07(62.64)

Per-capita Consumption

77 kg

17 kg

9,700 US-$2,200 US-$

b3=0.98(29.7)

b1=3.25(10.85) Dummies:

China 7.32 (5.31)India -9.56 (-7.34)USA 23.81 (6.04)Japan -50.37 (-13.29)

(125 countries, 1975-1997)

Meat demand China (smoothed)

Urban - Rural - Per caput expenditures

Total versus meat

Meat demand: (data and FAO projections)

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60

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80East Asia

South Asia

Per-caput meat consumption

Projections of feed demand

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3500

2000 2020 2030

mill

ion

mt

cere

als

Constant ratio cereals/residualsresiduals on trendgrazing and residuals on trend

Key trends on meat and feed: findings

The magnitude of effects on cereal markets is dramatic:

Meat demand/technology shift: up to +1,800 mill. t. in 2030

Climate Change (IIASA, 2001): - 105 mill. t. in 2080

GMOs: no large effects on yields expected

Price changes necessary to restore balance between supply and demand of meat: + 96% in 2030 worldwide, 119% in 2039 for Asia

Besides demand pressure

Rural to urban migration Traditional livestock systems becomes more

marginal More import ?

Locational (spatial) aspect of intensive livestock industry

Vegetal proteins as byproduct of industrial processes

Environmental pressures emissions of methane and ammonia

Conclusions

Spatial and social diversity of China must be accounted for.

This also facilitates interdisciplinary collaboration.

The feed-meat issue is critical for Chinese agricultural policy in the coming decades.