Chinese Food Security and the Opportunities of Brexit

The old adage – “the way to someone’s heart is through their stomach” – has never been more pertinent to global security.  With the world’s population now exceeding 7.2 billion (an awful lot of stomachs to fill) we require a mind-boggling amount of food. In fact, farmers will need to grow as much food in the next fifty years as they did in the last 10,000 years combined. And at a time when one in eight people on the planet is already chronically malnourished, this is clearly an issue that isn’t going to be resolved purely by traditional production methods. Resources are particularly limited in high economic-growth regions such as China, a country that has to feed 22% of the world’s population but which is endowed with only 7% of the planet’s cultivable land. With so many increasingly vociferous middle-class mouths to feed, it is unsurprising that food security is rapidly becoming the most contentious issue in Chinese politics.

Inspired in part by India’s “Green Revolution”, China has been keen to expand their area of influence in the agrichemical sector, and have been investing heavily in their own research into genetically modified technologies. As with many aspects of China’s economy, however, their GM industry is dominated by state-owned companies, reflecting the government’s political objective of securing domestic food supply through improving agricultural productivity.

The economic and environmental opportunities that these revolutionary GM foods present are staggering, and potentially unlimited. So far, we have been unable to escape a trade off between the need to ramp up supply – in order to satisfy dramatic increases in demand – and the degradation this inflicts on our planet. Scientists purport that herbicides and pesticides, pumped over crops by farmers attempting to maximise yields, have disturbing environmental consequences and can actually reduce the productive potential of the land over time.

The fragile balance of the ecosystem breaks down rapidly as the concentration of ions (vital nutrients for healthy plant growth) in the soil is dramatically reduced, damaging plants’ immune systems and weakening their roots. The chemicals harm insect and microorganism species that play important, fundamental roles in the ecology of agricultural land: naturally limiting pest populations via the food chain mechanism and maintaining soil condition. Worse still, just as antibiotic resistance is one of the greatest threats to patients’ safety, there are fears that organisms are also developing resistance to certain pesticides – a catastrophe of unimaginable proportions.

However, we are now living in a remarkable reality where it is possible to create pest resistant crops, eliminating the use of herbicides and thus averting the immunity crisis. The devastation to cotton crops as a result of the cotton bollworm is now just a memory to many Chinese farmers; in 2002, half the cotton grown in China was genetically engineered to produce a toxin poisonous to the terrible pest. Research undertaken by Wilhelm Klümper and Matin Qaim, published in the Public Library of Science, has found that, on average, such GM technology adoption has not only reduced chemical pesticide use by 37%, but increased crop yields by 22%. Substantial economic rewards can also be reaped; the study estimates that farmers who grow GM crops harvest profit increases of 68%. Modifications extend the shelf life of products, benefitting supermarkets that currently bin their revenues as a result of overcautious sell-by dates and consumer expectation of cosmetic perfection.

The economy benefits indirectly too, as a healthier workforce is created. Specific nutrients are introduced into crops to supplement paucities in the diet of a local population group. For example, the GM crop known as ‘golden rice’ has been engineered to enhance the levels of ß-carotene to tackle Vitamin A Deficiency (VAD), a condition disproportionately affecting children. Research has shown that in China alone, roughly 13% of children aged 0-6 years old suffer from VAD, severe cases of which can lead to blindness. This field is limitless and we are only just discovering other advantages, such as with new research into creating GM plants capable of producing vaccines.

A clear statement of the Chinese government’s serious intentions in ensuring adequate food supplies for the future is the recent announcement by ChemChina of their $43 billion bid for Syngenta, a Swiss firm, spun out of AstraZenca, a UK-domiciled chemicals corporation, specialising in pesticides and genomic research. If this acquisition gets regulatory approval, not only will it be the largest foreign investment ever made by a Chinese company, it will also mean that the combined ChemChina-Syngenta conglomerate accounts for more than a quarter of the world agribusiness market by revenue.

Since the opening of China to international trade in 1978, the sweeping market-economy reforms that were begun under Deng Xiaoping have successfully lifted 700 million people out of poverty and chronic hunger. The size of the middle class (defined as those with annual household income between $11,500 and $43,000) has grown exponentially from just 5 million households in 2005, to roughly 225 million households. The increasing affluence of China’s population has led to ever-increasing demand for protein-rich, processed-foods. McDonald’s is now frequently the restaurant of choice for Chinese families celebrating a special occasion, reflecting the growing westernization of the Chinese palate rather than any perception of the Big Mac as gourmet cuisine!

The dizzying growth of the Chinese middle class in the past decade has been accompanied by equally rapid urbanisation. Ten of the world’s top twenty fastest-growing cities are in China and the number of city dwellers now exceeds the rural population: a truly remarkable one-generation transformation of a traditionally agrarian society that would have bewildered Chairman Mao. As these cities and factories encroach and then consume the countryside, cultivable land has steadily diminished. This insatiable pursuit of economic growth regardless of externalities has, in places, resulted in environmental catastrophe. By some accounts, one-fifth of the country’s soil is now contaminated by unregulated industrial pollution. This cocktail of shrinking fertile land, increasing urban population drift and the relaxation of the one-child policy is a frightening one for China’s rulers.

As China is starting to suffer from diminishing marginal efficiency gains from its investment, avoiding famine on a scale even greater than that of the Great Famine of 1959-61 (when 14 million people died as a result of the Great Leap Forward) has become a primary objective. Lack of investment now into commercial agrichemical research and development would, Chinese leaders fear, stifle China’s economic growth. By failing to ensure a food supply for the city workers, the modern-day Great Leap Forward will be constrained. A nation, like an army, can’t march on an empty stomach.

Although the Chinese are at the cutting edge of research in agricultural biotechnology, having run more than 130 projects since the 1980s, rolling out nationwide commercial GMO schemes will still take years. Progress is often hindered by dislocation between state-sponsored GM research centres and commercial enterprises. Just as elsewhere in the world, there is vocal public opposition to these “freaky” and “unnatural” foodstuffs. Multiple shocking (and fatal) food scandals, involving everything from exploding watermelons to tainted formula milk, have received sensational coverage in the normally quiescent national media, rightly causing the public to be profoundly sceptical about the ability of food-safety authorities to enforce regulations.

Although public dissent in China towards government policy is traditionally muted, the leadership know that such events make it harder to sell the undeniable benefits of genetic modification. Given the pressure on the government to provide urgent solutions, momentum is growing: recent Five-Year Plans have announced ever-increasing government financial support to commercialise scientific innovation, with a special focus on genetic engineering. The ChemChina-Syngenta merger is only one, albeit highly visible, commitment to the Chinese government’s goal of eventually establishing food security for its entire population. Targeted propaganda campaigns to correct the information failure surrounding the perceived danger of GMOs should help to educate the public about the almost universal undeniably favourable stance on GMOs held by scientists and agencies, including the World Health Organization.

Anxiety about food insecurity in China (and in other developing nations with similarly large populations) could provide a massive impetus to UK agribusiness now it has left the EU. No longer constrained by the Common Agricultural Policy’s protectionist stance towards GMOs, Brexit gives UK scientists and agrichemical businesses the opportunity to become global leaders in this virtually limitless field. When the UK was tied to the EU’s autonomous food security programme, there was little incentive to fund research projects into GM crops. Throughout the EU’s history, there has only been one licence granted to allow the commercial production of genetically modified crops, which was over a decade ago. This anti-GMO stance in Europe resulted in 19 of the 28 EU countries banning their farmers from growing GM crops in October 2015. Even those countries that don’t implement the ban on GMOs are still required to seek the approval of the European Commission before they are allowed to plant any newly developed crop strain, and since the GM-sceptic countries are in the majority, they delay authorisation for years.

The bureaucracy involved in assessing whether new biotechnology practices are environmentally safe has meant that, in the cases of 21 safely tested GM crops, the entry to market of new GMOs has been delayed for a total of 44 years. These unjustifiable delays have been increasing since mid-2013, and are forecasted to have cost the European economy €9.6 billion due to the resulting trade disruptions. Frustrated by this deadlock, many European companies have simply abandoned attempts at submitting crops for review.

But the referendum gives the UK an unexpected opportunity to seize the initiative. Exiting the EU could revolutionise our farming practices and allow us to capitalise on the urgency of the Chinese to secure reliable food suppliers. The recent slowdown in the Chinese economy and the lack of suitable domestic investment opportunities has encouraged Chinese firms to look for profitable mergers abroad. A flourishing British agrichemical sector would be extremely attractive to China, both for investment and for security reasons. Despite having been restricted as a member of the EU from being able to profitably harvest GMO crops on our own soil, Britain’s strong pedigree in agricultural research has attracted all of the industry’s major players – the “Big 6” as they are known (BASF, Bayer, Dupont, Dow Chemical Company, Monsanto, and Syngenta).

Our outstanding reputation in the early stages of the research and development cycle has driven private investment. Syngenta, for example, employs around 2500 people in the UK across 11 sites, in particular investing nearly $200 million per year into their largest agrochemical R&D facility in Berkshire. The company, which turns over $1.25 billion annually, is capitalising on the powerful brains of British plant scientists – some of the best in the world. Although all attention is currently focused on the form exit from the European Union will take, the government should not ignore this immense opportunity, freed from EU suspicion and regulation. Collectively the “Big 6” spend around $4.7 billion each year on R&D, and the government would be wise to encourage greater investment, perhaps through infrastructure projects connecting the clusters of biotech firms that have appeared. The availability of grants for new research projects and the establishment of more dedicated enterprise zones would help Post-Brexit Britain’s standing in the global agriculture sector sprout tall.

Undoubtedly there will be opposition to supporting such a divisive initiative, just as there has been to fracking. But if the government is serious about rejuvenating the agricultural sector, after decades of mismanagement as a consequence of CAP regulation, it should consider how Brexit has freed us to consider radical solutions. Though we may be a long way ourselves from stocking genetically modified food on our supermarket shelves, the necessity to secure a reliable food supply in China is much stronger. Opening our country up to Chinese investment into our GMO trials would be an exciting enhancement of our trade relations with China.

adam smith