The United States China Commission (USCC) on Thursday released a report regarding China’s increased involvement in the US’ agriculture sector. The document argues that food security challenges and related vulnerabilities have pushed China to make more investments in the US. It also looks into the possible security implications of Beijing’s moves.
The findings of the report are outlined in three parts: China’s food security challenges and related policies, how US agricultural assets assist China, and the risk of Chinese acquisitions of such assets.
China has gone abroad to address its growing food security needs through investments and acquisitions of farmland, animal husbandry, agricultural equipment, and intellectual property (IP), particularly of genetically modified (GM) seeds. (1/2)
— U.S.-China Commission (@USCC_GOV) May 26, 2022
China’s Food Security Challenges
The report identifies three main issues that are at the core of the country’s inability to ensure universal food security. Firstly, the report notes that China’s lack of arable land is at the heart of its food security woes. “Although the United States and China have roughly the same amount of land mass, China’s arable land is shrinking,” it adds.
Per the report, China has only 7-9% of the world’s arable land, despite housing almost 20% of the global population. This loss of cultivable land has spiked over the last decade due to rapid urbanisation and industrial growth, which have “encroached onto farmland, displaced agricultural workers, and reduced land that communities are dependent on for agricultural work.”
Furthermore, these rapid developments have led to widespread soil and water pollution that has made once fertile land uncultivable. As a result, 15.5% of China’s groundwater is considered unsuitable for any use and almost 20% of the country’s agricultural land is contaminated.
Some U.S.-China trade is up.
— U.S.-China Commission (@USCC_GOV) May 27, 2022
In 2021, China imported more than 30 million metric tons of corn, used mainly for feed, from the United States, a substantial increase from the less than 5 million metric tons of corn in 2019.
Secondly, increased migration from villages to cities has increased the demand for food and is straining farms across China. “Chinese families with small-scale farms struggle to pass down their way of life to the next generation as more working-age individuals travel to the larger cities hoping to find higher paid jobs or pursue education,” the report notes.
Per Chinese figures, as of 2021, 64.72% of China’s population lives in urban areas, compared to just 37.09% in 2001, highlighting the scale of migration that has taken place over the last two decades.
Additionally, the rapid rural-urban migration has moved many workers from farms and created massive labour shortages.
Finally, the document blames livestock diseases, pests, and extreme weather conditions for worsening China’s land scarcity. The report notes that China witnesses frequent disease outbreaks, which affect livestock and farmers. For instance, it says that the outbreak of African swine fever across pig farms killed hundreds of millions of hogs.
Furthermore, pests like the Fallen Army Worm, which feeds on over 80 crop species, have devastated fields and plantations across the country. Similarly, intense flooding in many parts of China has affected more than 14 million acres of cropland and destroyed farms and infrastructure, and displaced millions.
Chinese Agricultural Asset Holdings in the US
The report claims that despite a plethora of initiatives aimed at improving domestic agricultural productivity, climate change and urbanisation-induced food security challenges will persist. Against this backdrop, China is interested “in an array of US agricultural assets” and has been making investments in land, livestock, seeds, and supporting infrastructure in the US.
It notes that by owning these assets Chinese agricultural producers are diversifying their supplies and as a result are mitigating risks from events like natural disasters. For instance, Chinese investments in the agribusiness sector have grown recently. It gives the example of one particular Chinese agribusiness investment in a small plot of land in North Dakota for a corn mill. The report says that the land is located near a US Air Force base, which houses some of the country’s “top intelligence, surveillance, and reconnaissance capabilities.”
Moreover, companies with links to the Chinese Communist Party (CCP) are investing billions of dollars in multiple areas in the US agricultural sector. According to the Agricultural Department, Chinese investor holdings in US agricultural lands increased from 13,720 acres in 2010 to 352,140 acres in 2020
The report says the property is "about 12 miles from the Grand Forks Air Force Base, which houses some of the United States’ top intelligence, surveillance, and reconnaissance capabilities."
— Eamon Javers (@EamonJavers) May 26, 2022
Risk of Chinese Acquisition of US Assets
The report claims Chinese acquisitions will severely impact local communities due to their environmental impact. For example, it notes the case of a Chinese company called Smithfield, which has been expanding its ownership of hog farms in order to “offshore some of the environmental impacts of hog farming.”
It also posits that “raising hogs is an environmentally impactful practice, as hog waste fills acres of open-air lagoons or pits that have been found to emit toxic chemicals.”
Simultaneously, China has been pouring a lot of funding into the development of its domestic seed industry and as a result “Chinese nationals have smuggled seeds out of the United States to China to be replicated,” according to the study. “There are no clear estimates on the scale of commercial losses due to agricultural Intellectual Property (IP) theft, but losing these seeds to China is certainly costly for the US,” it notes.
“For example, creating a single hybrid seed, the typical subject of theft, requires breeding two inbred seed lines. Each inbred seed can cost up to $30 million to $40 million in lab costs, field work, and trial and error, not to mention the time spent completing this work,” the researchers found.
The report claims that China has been increasingly involved in “agricultural espionage,” which has become a “convenient way for China to improve its agricultural output and become more competitive in global markets.” “Chinese scientists have in certain cases chosen to simply steal U.S. agriculture IP and technology rather than try to research and develop them themselves,” the report asserts.
At the same time, China could use the theft of IP for military applications, and “the potential weaponization of agricultural IP” has raised serious concerns in Washington. “Agricultural genetic technologies present unique dual-use potential that may attract further economic espionage,” it adds.
“Similar to hacking a computer code, Beijing could easily hack the code or DNA of US GM seeds and conduct biowarfare by creating some type of blight that could destroy US crops,” it warns.
The complete report can be accessed here.