However, China still has 70 million impoverished people according to its own standard, and 200 million impoverished population according to the World Bank standard, most of whom are resource poor small farmers living in remote areas.
III. In view of actual trade growth, China's domestic agricultural support does not impact U.S. large-scale commercial export
China's agricultural support is subsistence support, which mainly aims at improving farmers' livelihood. At the same time, China's agriculture bears multiple functions, to realize which efficiency is sacrificed. China's agricultural support has the distinguishing feature of compensating for the positive externality of agriculture, while the U.S. introduces support policies for the competitiveness and commercial interests of farm owners.
In recent years, China's grain production has made some progress. The main reason, however, is that many farmers have no choice but to grow wheat, rice and maize, as soybeans and cotton they formerly grew were negatively impacted by continuous influx of imports. With regards to real market share, although production of China's three main grains has increased, the current degree of self-sufficiency has decreased to below 87%, if we take soybeans into account as a main grain following China's practice.
This clearly indicates that China has not overly stimulated grain production, China's agricultural support constitutes no obstacle to normal international trade and does not impact on U.S. agricultural export to China. The U.S. claimed that China's domestic support exceeded WTO accession commitments in 2012-2015. While it was during this period, China's imports from the U.S. reached a record-high of 108.97 billion dollars, an increase of 38.53 billion dollars (up by 55%) from 70.44 billion dollars during 2008-2011. Despite slight fluctuations in 2015, the imports from the U.S. accounted for 21% of China's total agricultural import value, with sorghum, DDGS and soybean accounts for 83.8%, 83.7%, 34.8% respectively, and for cotton and livestock, more than 10%.
IV. From the perspective of sustainability, the process of trade liberalization must take into account the need of developing members for food security and livelihood security of small farmers.
The U.S. challenge against China's grain support policy is, in a matter of fact, the reflection of conflict between trade liberalization doctrine and real need of developing members to safeguard food security, which had once happened in the 9th WTO Ministerial Conference in 2013, where developing members and developed members had a dispute over public stockholding for food security purposes. Global cereal trade volume accounts for less than 15% of its output, more than 85% of cereal demand is met by domestic supply. The only way for developing members to have a stable food supply thereby ensuring food security is to increase investment in agriculture and food production, and support small farmers in particular, thus enhancing food production capacity. This is the reason why developing members reiterated in Doha negotiations that food security which is of paramount importance to developing members is not negotiable.
In fact, WTO has its answer to the conflict between trade liberalization and food security: food security must be fully taken into account during the process of trade liberalization, commercial interests cannot be obtained at the expense of small farmers' livelihood security and rural development need. Sufficient Special and Differential treatment must be provided to developing members, which is the underpinning principle of WTO and has been specified in Doha round negotiations. Uruguay round Agreement of Agriculture stipulates, "commitments under the reform programme should be made in an equitable way among all Members, having regard to non-trade concerns, including food security and the need to protect the environment;"
Eliminating poverty, ensuring food security and small farmers' livelihood security, are the common goals of all nations, but particularly important and arduous for China, a developing country with a huge population. Development of agricultural trade should be conducive to the attainment of those goals. Any trade liberalization ignoring China's circumstances and development is morally untenable, and is doomed to failure. Any trade growth ignoring the food security of 1.3 billion people and livelihood security of 620 million farmers is not healthy, nor sustainable.
Tang Zhong, School of agricultural economics and rural development, Renmin University of China
