GHI Member Companies and Private-Sector Voices at the OECD-China Meeting

Posted by on November 20th, 2013 | 0 Comments »

At the recent OECD-China meeting, GHI member companies DuPont, Monsanto, Elanco and John Deere made presentations on the role of the private sector in the future of Chinese agriculture. GHI Executive Director Margaret Zeigler also presented the findings from GHI’s annual GAP Report® and their relevance to China. William (Bill) Niebur, DuPont Vice President and Pioneer Northern Asia Leader; Yong Gao, Monsanto Director Corporate Affairs, Asia; Ya Qung Song, John Deere Manager of National Accounts for China; and Dr. Margaret Zeigler (representing Elanco) each emphasized different aspects of the role of the private sector in enhancing productivity for Chinese agriculture.

William Niebur of DuPont, Mr. Yong Gao of Monsanto, and Mr. Ya Qun Song of John Deere

(left to right) Mr. William Niebur of DuPont, Mr. Yong Gao of Monsanto, & Mr. Ya Qun Song of John Deere

Mr. Bill Niebur, DuPont
Policies must support a new generation of Chinese entrepreneurs.

Mr. Bill Niebur of DuPont spoke of the need to nurture the entrepreneurial talents of the next generation of Chinese farmers. “What happens in China has global implications, and this is especially true for the sector of agriculture and food demand.  Over the past several years I have visited over 34 provinces in China.  I have witnessed an emerging group of entrepreneurs that have not previously farmed, but these new farmers see great opportunity to create dynamic centers of growth in agriculture to feed the Chinese people.  The new agricultural policies of China must move us together into a new frontier of opportunity.” Mr. Niebur hopes that DuPont Pioneer and other private sector companies will continue to support and promote this enterprising spirit.

Mr. Yong Gao, Monsanto
China should streamline its registration requirements for new seed varieties.

Monsanto is a leader in agricultural research and development, devoting close to $1.4 billion to R&D spending. Mr. Yong Gao noted that the private sector as a whole is investing heavily in products that have the potential to dramatically improve yields. China’s registration requirements for new seed varieties, however are too complicated and slow. It can take 7-8 years for new seed varieties to become available for use in China, whereas in the U.S. and Brazil, it takes at most 4-5 years.

Dr. Margaret Zeigler, speaking on behalf of Elanco
Already existing technologies can be applied to ensure an adequate supply of milk.

Elanco, by improving the health and performance of animals, seeks to promote a safer, more affordable, and more abundant food supply. Today, the global average is about one, 8-oz glass of milk (or dairy equivalent) available per person per day. From a nutritional perspective, we need two glasses a day. In order to meet this gap, even in the face of rising future demand, it would take only a 4.75-oz annual increase in daily milk output per cow. Many countries are already exceeding that rate of productivity growth, and some of the fastest growing countries are increasing daily milk production at more than 22 oz per year. Simple access to proven practices and innovations can easily achieve this increase. Fresh, clean water, improved nutrition, better vaccines, disease control, improved housing and cow comfort and other readily-available technologies can be better applied to meet the rising demand.

Mr. Ya Qung Song, John Deere
Mechanization empowers farmers, reduces poverty, and raises productivity.

Mr. Ya Qung Song emphasized that mechanization is the way out of poverty, and especially important to China. John Deere is committed to those working the land in China, many of whom could benefit enormously from basic mechanized farm machinery. Working fields by hand is far less efficient than with mechanized equipment. For example, plowing without a tractor can only prepare 50 MU per year, while with even a small tractor, 50,000 MU per year can be plowed (6 Chinese MU = 1 acre). Subsidies for mechanization are good policies to help improve productivity and allow farmers to lead better lives. Mechanization, as well as better education and extension services, can also lead to environmental improvement and better resource conservation methods.

Dr. Margaret Zeigler
Productivity Growth with a focus on Efficiency across Agricultural Value Chains.

According to the 2013 GAP Report®, rising incomes in China will drive very fast growth in food and protein demand, and China will only be able to meet 72% of this demand by 2030. GHI believes that this demand can be met by increasing total factor productivity (TFP) growth, as well as by facilitating trade and imports.

China Food Demand Compared to Ag Output from TFP Growth [GRAPH]

Click to view a larger graph.

In order to increase productivity growth in China, Dr. Zeigler noted that China must increase its government and private sector investment in agricultural research and development and infrastructural improvements. GHI advocates taking a value chain approach to agricultural productivity. This means that instead of simply focusing on farm output, policymaker should be aware of other, possibly easier ways to increase efficiency. From transportation, fuel, and storage of grains, to markets and distribution, and even to consumption habits, food can be better managed all along the value chain. Up to 1/3rd of all edible food produced is lost or wasted. While this number seems discouraging, it also represents a tremendous opportunity to increase efficiency.

GHI also believes that China should facilitate the importation of food from regions that are currently or will soon become net exporters of agricultural products. Dr. Zeigler noted that countries like Brazil have achieved great success in increasing agricultural productivity and have become net exporters, and will prove to be essential trading partners for China and other regions with a gap in agricultural output.

« GHI Articles Of Interest: A Jolt to Complacency on Food Supply; India warns US over food stockpiling as WTO deal goes down to wire
Other Perspectives at the OECD-China Meeting »

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