An outbreak of African swine fever, which infects only pigs, has decimated China’s herd, pushing Chinese pork prices to record highs and increasing the need for meat imports.

However, coronavirus — which has killed 563 people so far — is keeping consumers and workers at home in China, delaying purchases at stores and restaurants and slowing the unloading of products at ports.

The disruption exasperates Beijing’s efforts to ensure adequate meat supplies and the plans of global companies like Tyson and JBS to profit from the shortage.

The dual disease outbreaks also highlight the problems facing import-dependant China in its efforts to feed its population.

“There’s been disruptions at the ports,” Tyson CEO Noel White said on a call with analysts. “That has skewed shipments, receivals.”

China has increased meat imports from the U.S., Europe and Brazil as African swine fever has killed up to half its pigs since August 2018.

Beijing pledged to increase purchases of U.S. farm goods in an initial trade deal last month, raising traders’ expectations for more pork shipments. China also eased restrictions on U.S. beef imports and in November lifted a ban on U.S. poultry meat shipments.

But coronavirus has clouded the outlook for Chinese demand, White said, as cities have been quarantined. He said Tyson is still shipping meat to China and has orders on its books.

“Once we get past the coronavirus incident, whenever that might be, I do think there is going to be very strong demand,” he said.

Meat is shipped to China in refrigerated containers that must be plugged into electrical outlets once they are offloaded to keep products cold.

Importing companies normally receive containers as they arrive, freeing up space for others. But several Chinese ports are at capacity on space for refrigerated containers and outlets because few receivers are picking them up, said Peter Friedmann, executive director of the Agriculture Transportation Coalition.

Shanghai and Xingang have reported 100 per cent utilization of available plugs, he said.

Meat shippers are also scrambling, selling to other countries or shipping to other Chinese ports, Friedmann said.

“Things are really getting bad over there,” USA Poultry and Egg Export Council president Jim Sumner said.

— Reporting for Reuters by Tom Polansek and Karl Plume in Chicago.

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The hatred took root in 1995 when EWG published — on something called the Internet — a 10-year, searchable database of U.S. Department of Agriculture (USDA) payments to all American farm entities. Farmers, especially the Big Boys, were furious that the public was given a powerful telescope to peek into their back pockets.

No one, however, complained about the database’s accuracy. (It continues to be updated today.) Indeed, it was the accuracy that complainers hated the most. Every penny of taxpayer money openly, and at times embarrassingly, glittered in the bright sunshine of public disclosure.

Which, of course, is a good thing unless the sunshine falls on, uh, you.

On Oct. 5, EWG fired a powerful, well-documented volley at the most sacred tenet in American agriculture, “We Feed The World,” and hit it smack in the face.

It must have hit right on the mouth because no one in the reflexively sensitive American ag community was either able or willing to respond to EWG’s key finding: We cannot feed the world when, in fact, “Less than one per cent of American agricultural exports go to the 19 countries with the highest levels of undernourishment.”

The 14-page analysis to support that conclusion is — like EWG’s farm program payment database — clear, inarguable, and devastatingly accurate.

It’s also very simple in its construction; to test its “we don’t feed the world” thesis, EWG simply tracked where U.S. farm exports went. What it found, and what USDA data confirmed, was that most U.S. farm and food exports went to the richest, best-fed nations while little to any went to the poorest, most undernourished nations.

For example, “In 2015, the top 20 importers of U.S. agricultural products — 19 individual countries and the European Union — accounted for 86 per cent (US$114 billion) of the total value of U.S. agricultural exports.” Only 14 per cent went to the other 100-plus destinations” tracked by USDA.

And “Even though we provide almost half of all food aid to those countries, U.S. exports and food aid together constitute only 2.3 per cent of their food supplies.”

None of this should surprise anyone. If a nation, after all, has the money to buy food, we’ll sell them the food. If the nation is too poor to pay for the groceries, well, we’ll take our exports elsewhere.

This for-profit approach to ag exports isn’t a bad thing. It does, however, allow us to transform our feel-good, we-feed-the-world belief into “a moral imperative,” suggests EWG.

That subtle shift then openly fuels “(T)he collateral damage to natural resources, the environment, human health and ecosystems (to be accepted as)… regrettable but unavoidable” because, by golly, we have to feed the world.

This “claim that U.S. agriculture ‘feeds the world’ is not a harmless myth,” the Des Moines Register declared Oct. 10 quoting the EWG’s report, because “It provides a moral justification for continuing practices that have harmed Iowa’s environment and led to low prices for farmers.”

These results, however, are not native to only Iowa nor are they prescriptive. Moreover, the Register noted, they rest on another shaky premise.

“A 2015 study by the Center for Food Integrity shows that only 25 per cent of consumers surveyed believe ‘The U.S. has a responsibility to provide food for the rest of the world.’ Respondents were more interested in access to healthful, affordable food.”

What needs to happen now, suggested the newspaper, is for everyone in U.S. agriculture — farmers, ranchers, Big Agbiz, politicians, foodies and, yes, even the Environmental Working Group — to hold “a vigorous debate… on the most effective way to ‘feed the world.’”

“But,” the immediately added, “let’s begin by setting aside myths…”

Yes, let’s.

The Farm and Food File is published weekly through the U.S. and Canada.

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Not for Haroon Akram-Lodhi. The economist and Trent University professor who specializes in the political economy of agrarian change in developing capitalist countries, says equating a growing population with global hunger is not only incorrect, but creates a false moral imperative for intensive industrialized agriculture.

“The argument that population growth is faster than growth of food supplies… is simply wrong,” Akram-Lodhi told attendees at a recent Menno Simons College lecture titled “Feeding the World: Is Hunger Inevitable?”

“The world, in terms of food production, has witnessed historically unprecedented increases in the amount that we produce,” he said, adding that according to United Nations World Food Program, the planet already produces enough food to feed more than 10 billion people.

Yet nearly a billion people — 870 million of the world’s seven billion inhabitants — live with chronic hunger.

“If we have record production, why do we have record hunger? And where do these record prices come from?” Akram-Lodhi asked.

For the author of Hungry For Change, the answer to this contradiction is found in factors driving increases in food prices, including the move to produce biofuels.

“What’s happened over the course of the last decade or so, is that the Europeans and the Americans have used subsidies to try and create a market for biofuels… it’s massively expanded,” Akram-Lodhi said, noting more than 30 per cent of the U.S. corn crop now goes to the production of biofuels.

“Grains that used to be used for food are now being used for fuel so that we can drive to the supermarket and buy our groceries,” he said. “And this very large expansion of biofuels has been a major driver increasing prices.”

Speculative influence

Akram-Lodhi said the move by speculators from stocks to commodities after the financial crisis of 2008 was also a major influence on food price levels and volatility.

“You’ve got a change from food traders dominating the market for financial assets in food… giving way to food speculators,” he said.

Many of the financial institutions directly tied to the global financial crisis actually benefited from increased commodity speculation, he noted.

“In 2012, by betting on movements in prices, Goldman Sachs (a large U.S. financial house)… reported a profit of $400 million, just from food price movements,” Akram-Lodhi said. “Over the course of the past five years, we’ve seen the real farm economy and food production become unhinged from the financialized farm economy.”

Akram-Lodhi noted that more people are eating meat than ever before, resulting in more grain going to feed animals rather than people.

In the U.S. and Canada, the average person consumes about 123 kilos of meat per year. And while countries like China see averages of about half that amount, those numbers are climbing as well. While not advocating vegetarianism, he said he tells his students that if they were to make one change in their lifestyle for the good of the planet, it would be to eat less meat.

“The ‘meatification’ of global diets is, in strictly economic terms, a really poor use of resources,” Akram-Lodhi said. “So biofuels, speculation, meatification; this over the course of the past six years has driven up these increases in global food prices, but it’s not population growth.”

‘Corporate food regime’

He described these changes as part of a “corporate food regime.”

“(I)t’s predicated on and requires the massive use of fossil fuels throughout industrialized agriculture; it’s a food regime which is dominated by global agri-food transnational corporations,” said Akram-Lodhi. “And these global agri-food transnational corporations are driven by financial market imperatives to pursue short-term profitability.”

He said the commodification of food contributes to scarcity, as do poor distribution networks and lacking infrastructure.

“Food retailers are the ones that really dominate this system,” Akram-Lodhi said, adding the emphasis has to be placed back on profitability for producers and the return of agricultural jobs.

While Akram-Lodhi acknowledges the complexity of world hunger, one of the first steps to addressing it is to debunk the myth that world hunger is caused by population growth.

“Many people worry about a world of 10 billion people — I don’t think a world of 10 billion is to be feared,” he said.

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The central government said in its “No. 1 document” for 2013, focusing on modernizing agriculture, it would grant more subsidies to large-scale landholders, family farms and rural co-operatives as it tries to provide more incentives to bring economies of scale to the fragmented countryside.

The “No. 1 document” is a key indicator of policy priorities and has focused on rural matters every year since 2003.

“The development of China’s rural sector has entered a new stage along with the deepening industrialization and urbanization,” the government said in the document, which was published by the official Xinhua news agency.

It listed grain security and farm product supply as top priorities, with China seeking to boost production as it urbanizes and industrializes. The relocation to the cities of more than 200 million migrant workers has slashed the rural workforce and boosted food demand, leading to a growing dependence on imports.

The government will continue to support domestic farm prices by increasing state stockpiles, it said. The policy has sent domestic prices much higher than international levels, requiring even tighter regulations of imports.

The government will continue to purchase and stockpile corn, soybeans, rapeseed, cotton and sugar while strengthening the import tariff and quotas system, it said, without giving details.

China would also draw up measures to stimulate agriculture commodity futures trading and introduce new futures products. The government provided no details in the document.

The government will strengthen monitoring on imports of “sensitive” farm products and crack down on smuggling, it said, without elaborating.

Land transfers

Consolidating land under the control of larger commercial farms has remained a big challenge for the government, with a large number of leaseholders still unwilling to give up the safety net that their small farms provide.

The government is concerned that allowing large-scale land transfers will enable authorities to sell more scarce farmland to profitable non-agricultural sectors. It also fears a rising tide of rural unrest in the face of land grabs and pollution from heavy industry.

The government aims to improve the land registration system in the coming years to “offer legal proof to farmers in cases of land transfers,” it said in the document.

Farmers in China do not directly own most of their fields. Instead, most rural land is owned collectively by a village, and farmers get leases that last for decades.

In theory, the villagers can collectively decide whether to apply to sell off or develop land. In practice, however, local governments usually decide land sales and get the bulk of revenues.

Chinese academics have long called for land system reforms to permit direct land transfers by farmers.

Food security has long been a preoccupation of the ruling Communist Party, but imports last year accounted for about 12 per cent of total food supplies and senior officials have already ruled out self-sufficiency as an option.

But the government has remained reluctant to endorse large-scale imports, and the government is also expected to promise to better regulate trade.

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China’s soaring imports of agricultural products remain a sensitive topic for the ruling Communist Party, which has traditionally put self-sufficiency and food security at the top of its agenda. It also fears a spike in imports could hurt the vast farming population and raise the spectre of rural unrest.

Chen Xiwen, director of the Chinese Communist Party’s top policy-making body for rural affairs, told a forum at the weekend that food supplies would come under increasing pressure as incomes improved, and China needed to boost production, but it could not turn back the clock when it came to imports.

“During the process of urbanization, we must pay attention to modern agricultural development and to farm product supplies, but of course, we certainly cannot pursue self-sufficiency,” he said, noting that last year’s import volume amounted to around 12 per cent of China’s total food demand.

He said the question of food supply required close attention to ensure that urbanization did not stop or reverse course.

Since China embarked upon its modernization program in 1978, around 260 million farmers have moved to the cities. China’s total rural population fell by 80 million between 1982 and 2010, census data shows.

Import debate

Chen’s comments are part of a debate in the central government about the role imports should play in feeding China’s increasingly prosperous population, especially as its cities expand and farmland and rural labour dwindle.

China’s plan for development in agriculture over the five years to 2015 retained the aim of self-sufficiency in agriculture production, setting a target of 95 per cent of supplies to be sourced domestically.

But with the country increasingly dependent on the international market, a top government researcher has urged Beijing to ease controls on farm product imports.

“For a country with 1.3 billion people, it is impossible to rely on ourselves to guarantee all farm products supplies,” Han Jun, the head of the rural department of the Development Research Centre, a cabinet think-tank, told a forum last week.

“To ensure grain security and supplies of major farm products does not mean that we should go back to the way of self-sufficiency,” he said.

He said China should loosen controls over corn imports and rely more on the global market for cotton, sugar and soybeans.

Demand for corn in China, already the world’s second-largest consumer, is set to rise sharply. Corn is used in livestock breeding, and rising incomes are expected to boost consumption of meat, dairy and eggs.

China’s grain and soybean imports topped 70 million tonnes for the first time last year, with imports of vegetable oil also reaching 8.45 million tonnes. Imports of farm products accounted for 12 per cent of domestic consumption last year, said Chen.

China’s farm trade deficit in 2012 increased 44 per cent on the year to $49.19 billion, the Agriculture Ministry says.

Cereal imports rose 157 per cent on the year to 13.98 million tonnes, with a total value of $4.79 billion, while imports of livestock products reached $14.9 billion, up 11 per cent.

China is expected to remain mostly self-sufficient in rice and wheat. It is the world’s largest consumer and producer of the staples, whose global trading volumes are small.

China’s Farm Ministry said over the weekend that supplies of rice remained sufficient, and that price issues accounted for the rise in imports last year, rather than increasing demand.

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As Indonesia struggles to meet rising demand from an increasingly affluent population of 240 million, it is now the world’s top importer of sugar, Asia’s largest buyer of wheat, and imports about two million tonnes of rice and corn each year.

A copy of the law seen by Reuters, which is due to be signed off by the president by the end of 2012, shows that it covers areas such as food safety and the stocks, trade, purchase, prices, distribution and consumption of unspecified staples.

“In the new law we stress food sovereignty and autonomy,” said Achmad Suryana, head of the Food Security Agency at the country’s Agriculture Ministry, adding that it gave priority to securing adequate food supplies from domestic sources.

“So, food import would be secondary or even the last resort,” he said.

Consolidating many existing curbs on food items, such as import limits and tariffs to protect domestic farmers, the new law provides for the new body to be created within three years.

It will aim to help the government achieve self-sufficiency in staple foods such as rice, soybeans, sugar, beef and corn.

The new law puts domestic output and demand and the control of imports and exports at the heart of its efforts, which will finalize the expanded role of state procurement agency Bulog into the “super body.”

Global agribusinesses called for greater clarity on the details of the new food body, since its objectives can be interpreted in different ways and are opaque.

Greater restrictions feared

Critics say the new law could lead to more limits and trading curbs on the free flow of farm commodities, hinder overseas firms looking to invest to supply growing demand in the archipelago and ultimately, hurt the poorest consumers.

“It is a misguided pursuit of autarky in agriculture which misses vast opportunities for efficiency and competitiveness in the sector,” said independent analyst Kevin O’Rourke.

“I’ve read that the idea is to incorporate two, three or maybe four bodies into this new super body,” he added. “Everything depends on how the president interprets the law and guides the new food agency.”

The law could also hinder food-processing industries, which have been promoted in Indonesia in recent years, he added, as they scramble for access to the cheapest raw materials.

The new law also prohibits “hoarding or storing staple food,” a clause that may create greater risk and uncertainty for commodity traders who stockpile, traders and analysts said.

Agriculture contributes around 15 per cent to the GDP of Indonesia, Southeast Asia’s largest economy, employing about 42 million people of a growing population of roughly 240 million.

As wealth levels rise and consumer tastes change and grow, Indonesia has attempted to vary its food basket beyond rice, while expanding and boosting yields in its homegrown commodities with limited success.

The law is one of a series of policy announcements this year, such as that on mining, which analysts say are linked to increasing economic nationalism ahead of Indonesia’s presidential elections in 2014.

“The new food law provides vast scope for state involvement throughout the agricultural sector,” said O’Rourke. “It aims to ensure adequate supplies of affordable food, but by pursuing this through autarky, it risks accomplishing the opposite. You can have autarky or affordability, but you can’t have both.”

Bulog to grow

After the worst U.S. drought in 56 years drove global prices of soybean and corn to all-time highs this year, Indonesia said it would extend the role of Bulog beyond rice to build bigger stockpiles of beef, corn, sugar and soybean.

Bulog’s current role is to maintain rice supplies and stocks of between 1.5 million and two million tonnes, but its wider remit could see it protect domestic farmers by setting minimum prices, while consumers would benefit from a maximum price ceiling.

The government, which is considering a wheat flour import tariff to protect domestic mills, also had its food policies criticized last month in a report by the OECD grouping of the world’s top economies.

Just under 19 per cent of the $780 million in Canadian exports to Indonesia in 2011 were cereals.

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A “Rust-Tracker,” using data supplied by farmers and scientists, could now monitor the fungus in 27 developing nations across 42 million hectares (103 million acres) of wheat — an area the size of Iraq or California.

“It’s the most serious wheat disease,” Ronnie Coffman, vice-chair of the Borlaug Global Rust Initiative (BGRI), told Reuters ahead of a meeting of wheat experts in Beijing from Sept. 1 to 4.

“If it gets started… it’s like a biological firestorm,” he said. Experts will review progress in combating the disease, with fungicides and 20 new resistant varieties developed in recent years.

The stem rust disease, forming reddish patches on plants like rust on metal, is known as Ug99 after it was found in Uganda in 1999. It has since spread as far as South Africa and north to Yemen and Iran.

Spreading

The fungus, which can destroy entire wheat fields, is likely eventually to be carried worldwide on the winds. The biggest threat in coming years is a spread across Asia to Pakistan, India and China, the world’s top producer, Coffman said.

“Effective control often depends on finding out what is happening in distant regions, and the Rust-Tracker can help scientists assess the status of stem rust and other rust diseases,” said Dave Hodson, the developer of Rust-Tracker.

About 85 per cent of wheat now in production worldwide was reckoned to be vulnerable to Ug99 and its variants, the BGRI estimated. Rich nations are far less vulnerable because they can afford to switch to new varieties or deploy fungicides.

Front line

Among developing nations, Afghanistan, Bangladesh, Ethiopia, Egypt, India, Kenya, Nepal and Pakistan are on the front line of deploying rust-resistant varieties.

Coffman said that relatively minor amounts of wheat output had been lost so far. “The only country under immediate threat of a dramatic loss of production is Ethiopia,” he said.

In Kenya, for instance, Ug99 had been brought largely under control because of shifts to new varieties. Another threat was from yellow rust, which has struck nations from Morocco to Uzbekistan in recent years.

The Ug99 fungus is among threats to food supplies. A UN panel of scientists says that heat waves, floods and droughts — like the one affecting the United States this year — are likely to become more frequent because of man-made climate change.

Scientists were also studying ways to limit a woody plant known as barberry, where the fungus also lives. Efforts to eradicate the plant in the 20th century seem to have reduced rust.

And the rust had overcome a genetic resistance to the disease developed for wheat in the early 1970s by Norman Borlaug, the father of the “Green Revolution” that introduced higher-yielding crop varieties, Coffman said.

He said that rust had been known at least since Roman times. About 40 per cent of the U.S. crop was destroyed in the early 1950s when rust swept up from Mexico.

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The guidelines include promoting equal rights for women in securing title to land, creating transparent record-keeping systems accessible to the rural poor, and protecting traditional land rights, said UN’s Food and Agriculture Organization. Their development was driven by concerns that countries such as China and Gulf Arab states are buying swathes of land in Africa and Asia to secure their own food supplies, potentially at the expense of local people.

The guidelines set principles for national authorities to refer to when passing laws and setting policy related to access and ownership rights for land, fisheries and forest resources.

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Rather than analyze the weather and topography of large swathes of land, the new system divides fields into smaller microclimates that guide farmers on the best way to work each individual plot.

It tells them when it is best to plant seeds, when to spray pesticides and even which crop is most suitable for each square-kilometre field, said Uri Dayan, a climatologist from Hebrew University in Jerusalem.

Since the method was published in the Bulletin of the American Meteorological Society in September, Dayan and co-developer Itamar Lensky have been working to develop it into a global interface that will help farmers on any continent.

The UN Food and Agriculture Organization (FAO) has said that global food output must increase by 70 per cent by 2050 to meet the needs of an expected 9.1 billion people.

Crops are very sensitive to their environment and even the slightest changes can ruin a harvest. Factors like pests, pathogens and weeds cause the loss of more than 40 per cent of the world’s food supply, the FAO says.

Even two adjacent fields that appear identical could contain individual microclimates which require separate attention to maximize production, Dayan said.

Lensky, who heads the remote sensing laboratory at Bar Ilan University near Tel Aviv, said their system uses real-time thermal images made available from NASA and then analyses the surface temperature of each plot at a fine scale.

“Once we understand how nature works, we pack it into an algorithm, and the results of this algorithm we can give to the farmers,” he said.

In one application, their system mapped a patch of land that it forecast would be attacked — and when — by the harmful heliothis, a moth that causes billions of dollars of damage to global agriculture each year. This knowledge allows a more effective use of pesticides.

Once the scientists find a partner for development, a global interface to guide farmers could be up and running in a couple of years. The system will improve as satellite pictures are taken with higher resolution, they said.

Gideon Yisrael, who has worked the fields of central Israel for 40 years, called the development a game changer.

“It will provide farmers with a good measurement for making good decisions and hopefully bring them more success and more harvest,” he said.

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beijing / reuters / China must push forward with modernizing agricultural technology as it faces increasing difficulty in meeting local food demand, Premier Wen Jiabao said in a recent essay.

“The fundamental way out is to enhance the construction of modern agriculture to boost the complex agricultural productivity continuously,” Wen said in an essay released by the Communist Party’s influential magazine Qiushi, or Seeking Truth.

The essay said the country must “give agricultural technology a more prominent status.”

The agricultural sector faces challenges because of a shortage of land and water resources, rising production costs, labour issues, and pollution, Wen said.

China will promote agricultural technology innovation, seed cultivation, mechanization, and further increase subsidies in the sector, especially for grain production, Wen added.

Grain imports “must be put under control,” he said.

The central government estimates that China’s national grain consumption will go beyond 572.5 million tonnes by 2020. Its grain output reached a record high of 571.21 million tonnes last year, up 4.5 per cent on year, the eighth year of growth in a row.

Although China is largely self-sufficient in wheat and rice production, it’s now the world’s top soybean buyer, taking around 60 per cent of global traded supply.

In 2010, the country also returned to importing corn in earnest after years of blocking foreign grain, buying 1.57 million tonnes. The country is expected to triple corn purchases this crop year.

Argentine downpours refresh drought-hit crops

reuters / Argentine corn and soy benefited from soaking rains last week, and they were expected to continue in the weeks ahead, reviving hope that farmers can salvage a good part of crops parched by weeks of hot, dry weather.

The drought, which hit in December after months of below-average rainfall, jacked up grains futures prices and raised concerns about global food supplies. Argentina is the second-biggest exporter of corn and third-largest supplier of soybeans, which serve as an important source of protein for the world.

“The weather should continue to normalize in the weeks ahead, with more regular rainfall in eastern and central parts of the country,” said the state-run National Institute for Agricultural Technology.

But the showers arrived too late for some grains fields.

One agricultural specialist predicted a 2011-12 soy harvest of 42 million to 43 million tonnes, about 20 per cent under original forecasts. He and other private analysts expect this season’s corn crop to be well under the record 23 million tonnes produced in 2010-11. One estimate pegs the corn harvest at just 17 million to 18 million tonnes and a soy crop of just 39 million tonnes.

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