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Today's Top News
World's Giants to Alter Food Equation
As China and India Rise, Diets Change and Demands Soar
BEIJING - Nothing about the lunch rush at a McDonald's in China would feel out of place in America: Students huddled around video games and fries; a computer salesman scarfing a chicken sandwich; a teacher lingering over a hamburger and coffee. And in that all-American scene lies the next great challenge to the world's food supply.
"It was impossible for my parents' generation to have meat all the time," said 42-year-old teacher Xue Wei, polishing off a piece of pie. "Now, we can eat meat every day."
The roots of today's food crisis span the globe, from sky-high oil prices in the Middle East to the diversion of crops from food to biofuel in the U.S., to drought-stricken harvests in Australia. But the crisis also has focused attention on a longer-term trend: the growing, evolving appetites of developing giants such as China and India.
"Population is increasing, and the income of the poor is increasing, but production is not increasing," said Usha Tuteja, head of the Agricultural Economics Research Center at the University of Delhi.
Rising consumption in China and India is not the prime cause of today's food-price shocks; both countries are largely self-sufficient in rice and wheat, staples that have fallen short in other developing countries and triggered riots.
But experts see milestones on the horizon: Sometime in the next year, for instance, China's growing consumption and shrinking farmland are likely to turn the country into a net importer of corn, a major source of animal feed and an ingredient for many of the processed foods cropping up on the nation's supermarket shelves.
Likewise, India is on track to become a grain importer thanks to a fast-growing middle- and upper-class minority that demands a diet diversified beyond the traditional staples of grains, legumes and vegetables. Dairy products are in particular demand in a country where at least 70 percent of the population counts itself as vegetarian, or eats meat no more than occasionally.
"You can pretty much see India is going to be an importer of grain," said Arif Husain, a senior food policy analyst with the World Food Program in Rome. "Increased demand is one of the top reasons why prices of food are going up. And India is a large player in that sense. It's about China and India, basically."
The issue hinges not simply on how much a country is eating but on what it is eating. After struggling for centuries to feed its population, China has succeeded in lifting 400 million people from poverty in the past generation. That achievement has triggered a fundamental change in the country's consumption of resources.
"A 6-year-old boy in China today is 6 kilograms (13.2 pounds) heavier and 6 centimeters (2.4 inches) taller than he would have been 30 years ago," said Anthea Webb, director of the World Food Program in China. "That's a strong indication that people are much healthier and better-nourished. For the long-term picture, it does present a challenge."
Meat consumption spikes China's per capita annual meat consumption has more than doubled since 1980, to 110 pounds today. That has created unprecedented demand for animal feed. Producing 1 pound of chicken, for instance, requires nearly 2 pounds of corn and soybean meal. A pound of pork requires 5 to 7 pounds of feed; beef needs more than 8 pounds.
But China and India are wary of being portrayed as culprits behind a global shortage. When President George W. Bush told reporters May 2 that the rise of India's middle class fueled price spikes, Indian officials struck back, pointing to their grain surpluses. The Indian defense minister called Bush's comments "a cruel joke." Likewise, Chinese Vice Agricultural Minister Niu Dun declared that "developed countries should bear the main responsibility" for the global food crisis because of policies that have diverted crops for biofuel.
Though China is a top consumer of commodities worldwide ranging from timber to copper to oil, it has long stockpiled grain at levels higher than the standard suggested by the UN's Food and Agriculture Organization. Indeed, David Dollar, the World Bank's China director, said China's role in the food crisis, to date, is "a small part of the picture."
By attributing too much of today's price spikes to Asian demand, policymakers could be underestimating pitfalls ahead, analysts say. A report on global food trends, released by UBS economists in September, found that "Asian affluence" is not yet a dominant factor in global food prices but that long-term trends in Asia "seemingly pose a change in food demand of proportions unlike those previously recorded in human history."
Southeast Asian nations briefly proposed forming a rice cartel akin to OPEC, the alliance of oil-producing countries, to give producers greater control over market swings. But Thailand's foreign minister withdrew the idea last week amid criticism from importers and exporters.
While China and India have imposed export curbs on some grains as a short-term attempt to control their supplies, James Rice, chief of China operations for Tyson Foods, the world's largest meat producer, said his industry is bracing for a long-term change.
"When China becomes a net buyer of anything, it causes the price to go up. Look at steel and oil. The big question is, what happens when China starts to buy corn?"
India's changing diet Though India is home to the world's largest malnourished population, its growing middle class is transforming the nation's diet. Those changing appetites, combined with population growth just under 2 percent a year and agricultural productivity increases of only about 1 percent a year, mean India could soon begin using its substantial foreign exchange reserves to buy food on the international market. That would further drive up world prices, analysts say.
India may be able to meet some of its growing demand by increasing agricultural productivity at home. Today it produces only half the yield per acre China has achieved, mainly because of differences in irrigation, experts say. M.S. Swaminathan, an Indian agricultural scientist who helped guide that country's Green Revolution in the 1970s, said India's agricultural production today is only about 30 to 40 percent of its total capacity, compared with China, which has hit 95 percent capacity.
Rising demand and rising food prices have "made Indians realize we have to build our food security with homegrown food, not imported food," he said. "Once you have that realization that you need to plan for 1.2 billion people by 2010, then your attention turns inward."
That realization, which is hitting home in China as well as India, has resulted in boosted budgets for agriculture in both countries this year. China's budget has risen by 20 percent for 2008, and India's by 30 percent, said Joachim von Braun, director general of the International Food Policy Research Institute in Washington, D.C. He called the greater investment in agriculture by the two Asian giants "the right move."
For China, a crucial challenge will be preserving its dwindling farmland, which has been steadily converted to industrial and residential use. Last year, China's arable land fell to 470,000 square miles, state media reported recently, edging closer to what the government considers a bare minimum of 463,000 square miles required to feed the country.
A paradox, of course, is that the land has been incorporated into thriving cities. The McDonald's that's home to the busy lunch rush, for example, is in the bustling neighborhood of Huajiadi, a former pepper-farming patch on the capital's northern edge. The fragile balance between China's growth and its agricultural base is too abstract to mean much to 20-year-old college sophomore Guo Meng.
One thing she knows is that her parents hardly ever come to McDonald's, she said while finishing her lunch, but her palate bears little resemblance to theirs.
"I eat sausage in the morning, a meat dish and a vegetable dish for lunch and the same for dinner," she said. "If there's no meat, I won't feel full, but if there's no vegetable, no problem."
© 2008 Chicago Tribune