Chinese people are no longer worried about filling their bellies with food; now they want a more diverse diet that's more healthy and with better taste. However, the Chinese government's food security policy still views the population as peasants on the brink of starvation. Their policies focus on maximizing the volume of staple grains without regard to market demand, wasting resources and preventing the Chinese grain industry from becoming internationally competitive.
An April 2015 commentary on a Guangdong grain market web site makes this point by citing the news of failed "super rice" crops in Anhui Province. This "super rice", developed by China's superstar rice-breeder Yuan Longping, purportedly could achieve yields of 1000 kg per mu (but it never produces that much in the field and many farmers got no yield at all when the disease-vulnerable seeds failed to produce). The commentary points out that "super rice" rice was adopted and disseminated based on the quantity of rice it could produce without regard to market demand for it. Since this type of rice doesn't taste good, many Chinese consumers questioned its social value.
The commentary notes that high-yielding "super rice" was first developed in Japan, but it has never been sold for human consumption there. Japan reportedly produced 110,000 metric tons of "super rice" in 2013, but all of it was used as animal feed. Why is China growing a type of rice that is only suitable for animals in Japan?
The commentary argues that maximizing yield is no longer appropriate since China has moved beyond the stage of struggling just to feed and clothe itself. Chinese people now want to eat better: they want variety and nutrition in their diet, not just full bellies. The commentator cites examples of Japan, South Korea, Taiwan, and Singapore where rice consumption fell as diets diversified. China is also in a stage where per capita rice consumption is declining. Notably, corn surpassed rice to become China's largest crop in 2012, a reflection of the diversification of diet to include more meat.
Chinese grain policy has become more and more "detached" from the market, says the commentator. He cites the government's emphasis on early-season indica rice as an example. Like super rice, this type of rice doesn't taste good. The government encourages production of early indica rice because it is easy to store in reserves. The crop maximizes quantity because it is harvested in mid-summer, allowing a second crop to be grown for harvest in the fall. Not much single-season indica rice--that tastes better--is held in government reserves.
The commentator compares the early-season indica rice crop to steel production during the "Great Leap Forward" of the 1950s. The steel produced by melting down pots and pans in backyard furnaces met production quotas for output, but it was not useful for anything. In the same way, the early-season rice crop meets output quotas but has no demand in the market.
This not only wastes resources but holds back the Chinese rice industry's development, argues the commentator. Chinese rice needs to establish brands and reputation for quality in order to be internationally competitive. The focus purely on quantity ignores the market and impedes the industry's progress.
The commentary's arguments can be applied more broadly. Chinese flour millers and textile manufacturers are begging the government to let them import high-grade wheat and cotton to mix with the vast quantities of low-end commodities produced by Chinese farmers in response to quantity-first policies. Chinese policy incentivizes farmers to mono-crop high-yielding but fertilizer-hungry corn to the exclusion of low-yielding nitrogen-fixing soybeans. Corn is in surplus while soybean imports grow year after year.
It's time for officials in Beijing to stop looking backward and join the rest of the country in the 21st century.