Pan Yaoguo

I. Feed Grain Is the Primary Challenge Facing China’s Grain Industry

Family-based operations in the agricultural industry has led to a new mechanism of grain supply and demand in the country, i.e. the "safety mechanism for family-based operations in the small-scale peasant economy". Real consumption of food grain of 768 million people in rural areas in 2003 was only 185 million kilograms since food grain produced by family farms called "economic cells" was supplied for the rural population in general and only a small amount was exchanged between farmers. Thus, grain safety in a real sense only refers to the risks of food grain supply facing urban residents, translating to the bottom line of 41.4 billion kilograms or a conversion of 50 billion kilograms of unprocessed food grain. Now, expenditure for dinners in restaurants is increasing year after year. Besides, 235 million kilograms for aggregate direct consumption of food are mainly processed food from grain and basic foods only accounts for a small proportion with a downward tendency.

The situation of feed grain is hard to explain. In fact, with a slight decline in food and seed grain and a sustained increase in industry grain, grain consumption of the country has relatively stabilized at a balance point in recent years.

1. Proportion of feed grain to overall grain output

In 2002, among the per capita grain consumption in the rural areas, feed grain accounted for 136.39 kilograms. Rural households, with the total population of 782.41 million consumed 106.7 billion kilograms of feed grain. In the same year, purchased quantity of feed grain per household was 404.06 kilograms, of which 250 kilograms was for feed grain. The rural population, with the total amount of 190.83 million peasant households, purchased 47.7 billion kilograms of feed grain. Thus, self-supporting and purchased feed grain in the whole year amounted to 154.4 billion kilograms, accounting for 33.78% of the total output of grain of 2002. As to the 560 kilograms of grain for consumption, and the 250 kilograms of grain purchased for feed grain per household, whether there is point of intersection, or even overlap, can be set aside for further study and confirmation. But the total amount agrees with the universally recognized consumption structure that feed grain accounts for one third of all grain.

As to certain annual consumption of feed grain of the country, no one can tell the accurate figure. There are two figures in the agricultural statistics in 1996: one is 213.7687 million tons for real consumption of feed grain in rural areas and the other is 11.8059 million tons for real consumption of feed grain in pastoral and semi-pastoral areas, which totals to 225.5746 million tons accounting for 44.71% of the total grain output of 504,528,100 tons of the same year. Although many people do not recognize the figure, experts conclude that grain used for feeding animals accounts for half! This conclusion can be true provided that the rate close to 45% is reliable, in addition that bran in used for feeding is taken into consideration. However, collected figures cannot be found in the subsequent statistics concerning feed grain due to the issue of balance facing grain consumption.

Feed grain will become the most important item in the grain consumption of the country in the next 15 years. In 2002, self-supporting consumption per capita of feed grain of the country was 136.39 kilograms, of which 353.77 kilograms were for Tianjin, 323.69 for Mongolia, 308.82 kilograms for Liaoning, 225.71 kilograms for Jilin and 222.64 kilograms for Heilongjiang. However, basic food grain of farmers in the five provinces was respectively only 160.09, 223.54, 216.68, 216.46 and 232.81 kilograms. Thus, we can conclude that feed grain consumption was generally higher than the consumption of basic food grain. As to the development in the next 10 years, the proportion of feed grain to basic food grain in the grain consumption of rural households will become larger. Feed grain consumption will be the most essential issue facing grain consumption of the country in the next 15 years.

2. Increasing demand for corn

Annual corn consumption per capita is one of the standards for measuring the development of animal husbandry and the living standard of a country. The United State is a major corn production country in the world. With a population of 260 million, its annual corn consumption per capita is 770 kilograms while the per capita annual consumption in China is less than 90 kilograms with the annual corn output of 120 million tons. Corn is the major grain feed and 70% of the corn output of China is used for feed grain. With growing quantity demanded for feed grain due to population growth and improvement of the living standard, the quantity demanded for feed is correspondingly increasing. Similarly, feed grain consumption is growing with the increasing total output of grain and the proportion of feed grain to total output of grain tends to increase, i.e. from 20% in the 20th century to the present level of over 30%. Besides, the demand for feed grain has also increased with the development of animal husbandry. It is estimated that the shortage in concentrated feed in the future will be approximately 50 million tons. However, 360 kilograms of grain per capita in China will continue for several years, which is far away from the 800 kilograms of grain per capita in some countries and areas where grain is the main feed. It is obvious that the shortage in feed grain is a big issue of the country. Actually, feed grain demand for livestock breeding is crucial in the grain industry of China in the 21st century. Feed grain, which is principally supplied by domestic production, is the primary challenge in the grain industry of China.

Experts predict that corn output of the country will be about 120 million tons in 2004, of which 7 – 8 million tons for food grain, 90 million tons for feed grain, 15 million tons for industry grain and 1.8 million tons for seed grain. The approximate expectant overall consumption level of 122 million tons will keep a weak balance of supply and demand in general.

At present, average per capita grain of the country remains at a low level and it is not practical to develop animal husbandry simply by relying on grain production. In addition to food resourse, China produces about 16 million tons of bean dregs, 30 million tons of bran, 40 million tons of distillers’ residuals and 500 million tons of crop stalks. Strengthing the exploits and use of all kinds of feed resources will remain the important path of sustainable development for livestock farming in China.

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