At a briefing in May, Japan’s agriculture minister quantified the illicit Chinese farming of Shine Muscat grapes — a preposterously expensive fruit engineered by Japanese breeders over 18 years. The rights holders, he said, were losing more than $70mn a year to grape bootlegging; China, as the prime villain of viticulture, had 30 times more of the fruit under illicit cultivation than Japan’s legally grown acreage.
Tokyo’s immediate chances of redress are slim. The greater question is how assertive Beijing will be in treating these grapes as a bigger long-term strategic crisis for China than for Japan. President Xi Jinping has deliberately conflated food security with national security and his government has pointedly labelled seeds the “chips of agriculture”.
China’s issue, framed in the rhetoric of self-reliance, is its increasing need for a food revolution. The seed industry will be central: the potential for efficiency gains is vast but the incentives for innovators are weak. China has a history of offering questionable protection on intellectual property — living it down is urgent. Now that the Swiss seed giant Syngenta is Chinese owned, Beijing must convince both its own industry and the outside world that it now supports the interests of the innovator alongside those of the farmer.
Climate change, extreme weather, urbanisation, demographics and shifting diets have long cast a shadow over China’s food system: food security has been a stated policy priority for years. But the focus, along with the recognition of the role that corporations will have to play in this revolution, has intensified since 2020.
Trade war with the US, Russia’s invasion of Ukraine, the narrative of economic nationalism and other factors remind China how much it relies on imports and how much more efficient its food production — from grain fields to pig farms — needs to be. China, said Xi in March, must rely on itself to feed its people. “We will fall under others’ control if we don’t hold our rice bowl steady,” he said, echoing the thinking that is propelling the country’s broader “Made in China” push for industrial self-sufficiency.
The obstacles are significant. Corn output per hectare in China, according to a new Goldman Sachs report, is 40 per cent lower than in the US, and it takes Chinese farmers between 6 and 26 per cent more grain to produce a kilo of pork or chicken than it does their American counterparts. Low yields, rising land prices and high use of pesticides and herbicides now put China’s grain production costs about twice as high as America’s, though roughly similar in 2007.
The offset, in the face of China’s rising demand for meat and other foods, has been a structural increase in imports of grains, soyabeans and animal proteins. Goldman Sachs estimates that if current imports are translated into arable Chinese land equivalent, they represent 71mn hectares, or 68 per cent of the country’s total arable land.
The involvement of state-owned and private Chinese companies has been substantial. Overseas purchases — of farmland, food production, agritech and other parts of the supply chain — have targeted the expected long-term profitability of food production and security of available supply to China. But Xi’s language suggests that acquired supply lines are being excluded from Beijing’s evolving definition of self-sufficiency.
If so, the corporate role envisaged for both domestic and foreign companies in realising China’s food revolution becomes even more critical. Much of the necessary boosts to efficiency — consolidated farms, precision farming methods, greater use of autonomous drones, planters and harvesters, animal vaccination programmes and more — are known but still some way off. But the “seeds as chips” rhetoric has a more urgent ring.
In March, a revised Seeds Law came into effect. It aims to toughen protections for crop and plant-related intellectual property. Expanding the commercial claims of the plant breeders — and extending rights to harvested material as well as the original propagating material — is designed to incentivise anyone breeding higher yield, climate-change-proof varieties for a Chinese market that has frustrated both foreign and domestic players for decades.
The value of the law lies in the deeply tricky issue of enforcement. On the face of it, the law implies a higher seed price for Chinese farmers; the offset comes when the seeds deliver the much higher productivity or market value their engineers promise. The test of Xi’s stridency on food security will be in the fields and the IP courts.