Business & Policy
All By Themselves
By Treena Hein
By Treena Hein
It’s well known that many countries of the world are struggling with severe debt right now – but China is definitely not one of them. Indeed, many sources confirm that China is several trillion in the black, and is using that economic clout to do things like enhance its food security.
Food security simply refers to a country’s (or a family’s or an individual’s) ability to secure a steady and adequate food supply for itself. In these times of political instability, impending fossil fuel scarcity and increasing global population, it’s more of a concern than ever. There are different ways food security can be handled, but chief among them is to have a majority of food produced within your own country, with some imported from nearby countries and stable allies. China has made it clear that in particular, it does not want to import meat. “China has a strong preference to produce its own livestock and control food animal production,” observes Dr. Mark Lyons, vice president of corporate affairs at Alltech. “Their preference will be to import grains.” (Headquartered in Nicholasville, Kentucky, Alltech is a global animal health company focused on natural scientific solutions to agriculture and food industry challenges). Lyons adds, however, that the Chinese are also looking to buy or lease land in places such as Africa for crop production, and possibly also for livestock production. “They have bought into some genome companies overseas as well, to look at improving genetics,” he says.
Pork is still the preferred meat by far in China, with about 50 million tonnes of pork consumed per year. “This is compared to 16 million tonnes of poultry and six million tonnes of beef,” notes Lyons. “The only other protein source that rivals this would be [various products from] aquaculture, and eggs, both around 50 million tonnes. There are also 16 million tonnes of fish caught per year and 30 million tonnes of milk produced.” This year, China had a deficit in pork production due to some disease outbreaks, and has been importing some U.S. pork. It also imports some chicken, but groups such as the National Chicken Council (NCC) would like to see more of this occurring. The roadblock relates to trade issues, says NCC director of communications Tom Super. China has imposed tariffs on a number of imported food products including poultry, and poultry imports from China have not been permitted to enter the U.S. since 2007. The NCC has voiced concerns over the situation and its support for freer trade.
At the same time that almost all meat consumed in China is produced domestically, however, domestic grain production is comparatively quite low. Lyons says annual meat, milk, and eggs production totals 158 million tonnes, while corn production only reaches 162 million tonnes, wheat 115 million tonnes, rice 134 million tonnes and soybeans 15 million tonnes. “Another very interesting factor is where these animals are actually produced,” he notes. “They are very close to [highly populated areas], which is a stark contrast to most the other parts of the world, where animal agriculture has migrated to areas that are less inhabited.”
Lyons thinks China will “go to all efforts” to avoid importing meat – and food security concerns aside, he believes food safety is one big reason for this. China has had a number of disease outbreaks, as well as food safety crises such as the melamine contamination in milk, that have led them to value food safety much more than ever before. Lyons says imported milk from countries such as New Zealand fetches premium prices. But Lyons concludes that above all, the Chinese “will certainly make whatever decisions are necessary to keep food prices low and food available, as this is critical for social stability in China.”
Indeed, Lyons believes the bigger world food question going forward will be what happens with India. “Relatively small changes in Indian meat consumption could drastically change the dynamics of meat globally,” Lyons says. “Also, both China and India have very high labour force connected to agriculture and, as both countries become more modernized, this may come under more pressure.”
Kentucky Fried Chicken in China
While pork is China’s preferred protein, fast food giant Kentucky Fried Chicken (KFC) is boosting consumption of chicken. To date, KFC has opened more than 1,200 restaurant locations in every region except Tibet, dominating even McDonald’s. Yum Brands Inc. (the Louisville, Kentucky-based parent company of KFC) has itself predicted that its total number of outlets in China will someday surpass that of the United States. “KFC has done an excellent job, not only building their infra-structure system and logistics system in order to get food to all their restaurants, but they’ve also utilized this as a marketing and brand-building exercise,” notes Lyons. “In that respect, they are very well thought of as a corporate citizen and also as a safe place for food. They are sourcing most of their products locally and so they have been very important for the entire Chinese food industry in terms of improving food safety standards.”
Lyons says some of their products are very similar to things that can be bought on the street, but are traded at a much higher premium. “This is widely believed because of the brand being so closely linked to food safety,” he notes. “They focus on having great-tasting and safe food that is very high quality and served in a very speedy manner.” He says that instead of marketing food in North America, in China, “they want to offer a balance in nutrition and a healthy lifestyle. They branched out far beyond regular chicken offerings and provided other options and are continually innovating new food products, with roughly 70 coming out each year . . . all uniquely suited to Chinese taste.” Menu items include seasonal vegetables such as bamboo shoots and lotus roots, and in colder months, things like rice porridge and soup.