China reported a record corn crop this year and bumper harvests of other grains, but Beijing continues to be concerned with food security, particularly amid rising tensions with trade partners, climate-related disasters and military conflicts.

Record corn production of 289 million metric tons this year was achieved largely thanks to a 2.7 per cent increase in planted acreage, as authorities reclaimed land used for other crops for staple grains.

Speaking at an annual meeting that sets rural policy priorities for the year ahead, policymakers said China will “stabilize” grain sowing area and “promote large-scale increases in grain yields,” the official Xinhua news agency reported late on Wednesday.

It did not outline specific measures to boost yields, but Chinese corn breeders are preparing to plant more than double the amount of genetically modified corn next year than in 2023, as Beijing slowly introduces a technology that typically lifts yields.

Policymakers also said China should “consolidate the results of soybean expansion”, according to state media. China has boosted its domestic soybean production significantly in the last two years by promoting more planting to reduce its reliance on overseas imports.

The policy, however, has resulted in excess production of non-genetically modified soybeans for food use, forcing Beijing to buy up some of the supplies for state reserves.

Policymakers said China should strengthen the protection of arable land, accelerate the revitalization of the seed industry and prioritize building “high-standard” farmland in its bread basket area of the Northeast, famous for its fertile black soil, according to state media.

–Reporting for Reuters by Mei Mei Chu, Chen Aizhu and the Beijing newsroom.

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Specializing in Chinese agricultural markets, the Beijing-based independent analyst veered away from the usual statements that often cast China as the bad guy on the world stage. Also, Li pointed out, Canada has been doing pretty well in exporting to China, despite issues regarding Canadian canola.

Central to Li’s presentation on Wednesday was how China has continued to diversify its agricultural imports as much as possible.

Just over the last year, China has either started importing or increasing imports from several countries — for example, rapeseed meal from India, Kazakhstan and Russia; soymeal from Russia and Argentina; cotton meal from Brazil; and sunflower meal from Russia.

While a lot of attention has been placed on China’s ban on canola seed imports from Canada, particularly through Richardson International and Viterra, all is far from doom and gloom, she said. In the U.S.-China trade war, the latter has increased its wheat imports from Canada, according to Li.

“Just in the first nine months of this year, Canada dominated. It has replaced the U.S. with a 71 per cent market share this year,” she said, adding that China has been buying more peas from Canada as well.

However, Li said, one aspect of China’s trade diversification might not bode well for Canada: flax. That’s because China has turned to neighbouring Kazakhstan for more flax.

As for canola market access, Li believes there are likely improvements ahead. China’s ambassador to Canada has commented there are few obstacles left in resolving the differences between the two countries, Li said.

Among those obstacles is the fate of Huawei executive Meng Wanzhou, whose extradition hearing continues in Vancouver. Meng was arrested by Canadian authorities a year ago at the request of the U.S.

Also, as reports have already stated, some Canadian canola has made it into China via the United Arab Emirates, Li said.

As for how the U.S.-China trade war can be resolved, Li said with a laugh “I don’t know,” adding that Chinese President Xi Jinping and U.S. President Donald Trump likely don’t know as well.

However, she said Washington’s demand of China needing to buy a specific amount of U.S. agricultural products is far from realistic, and that China wants to be free to purchase from whoever offers the best price.

In fact, with Australia’s canola production for this year on the wane, Li said China would merely turn to countries offering a better price.

Also, Li noted, when people discuss China, they need to separate the government from the Chinese Communist Party (CCP). She stressed that the workings of the government are not necessarily at the behest of the governing party.

— Glen Hallick reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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China said last week it wanted the Canadian government to stop allowing meat shipments to China after bogus export certificates were discovered, escalating a dispute that has also involved arrests in both countries of each other’s citizens and a halt in Canadian canola sales to China.

“We proposed a plan with additional measures for the (meat) export system in a way to tighten it and raise awareness so they reopen the market as soon as possible,” Canadian Agriculture Minister Marie-Claude Bibeau told reporters in Montreal after a meeting with pork and beef industry officials.

She did not give details of the plan, which she said was delivered a couple of days ago.

Relations between China and Canada nosedived in December after Meng Wanzhou, the chief financial officer of Huawei Technologies, was detained in Vancouver on a U.S. arrest warrant. She denies any wrongdoing and Beijing is demanding her return.

After Meng’s arrest, China detained two Canadians and later formally charged them with espionage. Canada says the arrests of the two men were arbitrary.

In Beijing on Tuesday, foreign ministry spokesman Geng Shuang said Canada should not “naively believe” that mustering allies to pressure China would have any effect. Canadian Prime Minister Justin Trudeau previously asked U.S. President Donald Trump to raise the cases of the two detained Canadians during recent discussions with Chinese President Xi Jinping.

But Jim Carr, Canadian minister of international trade diversification, said it was not unusual for Canada to seek broader support.

“Who are they to say that there’s no value in Canada talking to its allies about issues we’re having abroad? In a multilateral system, that’s how we do diplomacy,” he told reporters in Montreal.

Bibeau said Canada and China were dealing with the dispute over meat more quickly than the canola issue, which has dragged on since March. She said there was no deadline to resolving the meat issue but that Canadian and Chinese officials were discussing it daily.

It is too soon to consider compensation for the meat industry, Bibeau said.

— Reporting for Reuters by Rod Nickel in Winnipeg and David Ljunggren in Ottawa.

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China halted imports of Canadian meat effective Tuesday, the latest on the list of Canadian products China has blacklisted since the December arrest of Huawei executive Meng Wanzhou.

“The Liberal government has failed on their foreign affairs policies, and because of that we are vulnerable to bullying tactics like we’re seeing from China,” Bergen, a south-central Manitoba MP, told the Global Cash Crop Conference Wednesday in Winnipeg.

China has indicated no interest in coming to the table to talk trade, but has encouraged Canada’s justice minister to immediately end extradition proceedings against Meng, who was detained in Vancouver on a U.S. warrant and remains in that city under house arrest.

“Sitting in the fetal position hoping they won’t hurt us anymore is not a strategy,” Bergen said.

A Conservative government, if elected in October, would “press the reset button” on Canada’s relationship with China, she said, emphasizing China is “not a trusted trade partner.

“When you’re dealing with a partner you cannot fully trust, you have to approach the situation differently.”

Bergen said a Tory government would also launch a complaint against China to the World Trade Organization (WTO) — typically a lengthy, litigious process, which would hopefully result in the WTO finding a resolution between the two countries.

The Tories’ agriculture critic, Quebec MP Luc Berthold, tweeted Tuesday that Trudeau should also “personally raise (the meat trade) issue with (China’s) President Xi Jinping and demand that he remove these non-tariff trade barriers” during G20 meetings which begin Friday in Osaka, Japan.

Bergen and other federal Tories have said Canada could also choose to stop payments on its five-year contribution, estimated at about $500 million, to the Asia Infrastructure Investment Bank (AIIB).

AIIB is a Beijing-based international development bank set up in 2016 to help fund infrastructure work in Asia. Canada today has one of 12 director seats on the bank’s board, where it’s represented by Paul Samson, an associate assistant deputy minister in the federal finance department.

According to the finance department, Canada’s participation in the AIIB has “helped to promote inclusive global economic growth.”

“Being a small country, we have to recognize what our levers are,” Bergen said Wednesday.

She also criticized Prime Minister Justin Trudeau’s foreign policy foibles with other countries, citing Canada’s chilly trade relationship with India and the new North America free trade deal known as USMCA, or the United States-Mexico-Canada Agreement.

“Canada made a lot of concessions, and really got nothing,” she said.

— Marlo Glass writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting. Includes files from Glacier FarmMedia Network staff.

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But after taking samples from some pigs, local officials in the Xushui district of Baoding city, about an hour’s drive from Beijing, said their tests came back negative, said Sun Dawu, chairman of Hebei Dawu Agriculture Group, the farm owner.

As hundreds of pigs began dying daily on the 20,000-head farm, the company obtained a test kit that showed some positive results for the virus. But after further lobbying by Xinda, officials just offered the company subsidies for farm buildings and other investments, said Sun.

Sun’s account of events and pictures taken by farm staff of dead pigs lying in rows and a pile outside the farm could not be independently verified.

Xushui district said in a faxed response to Reuters on Tuesday that it was opening an investigation into the case, adding that it had found some “discrepancies” with the reported version of events.

“If there is illegal behaviour, relevant departments will handle it according to the law,” added the statement from the local government’s investigative committee.

Farmers and other industry insiders told Reuters that China’s African swine fever (ASF) epidemic is far more extensive than official reports suggest, making the disease harder to contain, potentially causing pork shortages and increasing the likelihood that it will spread beyond China’s borders.

“Our full expectation is that the number of cases is under-reported,” said Paul Sundberg, executive director at the Swine Health Information Center in Ames, Iowa, which is funded by U.S. pork producers.

“And if there’s so much of that virus in the environment in China, then we are at increased risk of importing it.”

China does not permit the commercial sale of African swine fever test kits, though many are now available. Official confirmation must come from a state-approved laboratory.

“Public confirmation of disease is the government’s job,” Sun told Reuters at his company headquarters in Xushui in late February.

Frustrated by the lack of action and mounting losses from the disease, Sun eventually published details of the suspected outbreak on China’s Twitter-like platform Weibo on Feb. 22.

Two days later, it became the first ASF case in Hebei province, one of the north’s top pig-producing regions, to be reported by China’s ministry of agriculture and rural affairs, about seven weeks after the company says it had alerted local authorities.

By then, more than 15,000 pigs on the Xinda farm had already died, said Sun, and the company even sold on thousands of pigs — potentially spreading the disease further.

Sun said officials did not explain why their first test had been negative, though he suggested it may have been because they took samples from live pigs on the farm and did not test the dead ones.

China’s agriculture ministry did not reply to a faxed request for comment on the case.

The ministry has warned against covering up outbreaks of the disease, and in January highlighted two large farms that had tried to conceal outbreaks.

Unconfirmed outbreaks

Detailed accounts of unconfirmed outbreaks shared with Reuters by two other farm company managers suggest Sun’s experience is not unique.

In one case in northern China last year, local officials declined to even carry out a test. In another case in Shandong province, official test results came back negative, despite clinical symptoms that strongly pointed to African swine fever and a positive test result obtained by the company itself.

Neither manager was willing to be named because of the sensitivity of the issue.

Once an outbreak of African swine fever (ASF) is confirmed, all pigs on the farm, as well as any within a three-km radius, must be culled and disposed of, according to Chinese law, and farmers should be paid 1,200 yuan (C$239) per pig culled.

For some cash-strapped county governments, avoiding compensation payments could be an incentive not to report disease, said a senior official with a major pig producer.

When the disease hit one of the company’s 6,000-head sow farms in the northeast in November, local authorities did nothing, the official said.

“It was never tested by the government. We couldn’t do the test because we didn’t have the capability. But there’s no question it was ASF, based on the symptoms and lesions,” he told Reuters, declining to be identified because of company policy.

A county official in northeastern Liaoning province told Reuters in January that the local government had poured so much money and resources into preventing and controlling African swine fever that it risked bankrupting the county.

But wealthy Shandong province, northern China’s biggest producer of hogs, has only confirmed one case of the disease, on Feb. 20.

Insiders at one company said four of its farms in the province had suffered swine fever infections, however, suggesting more unconfirmed outbreaks may have occurred.

After the company’s first outbreak in early January the local government tested and the results came back negative, said an executive, who declined to be identified because of the sensitivity of the issue.

Shandong province’s animal husbandry bureau did not respond to a fax seeking comment on unreported cases.

‘Spatial randomness’

There is no cure or vaccine for ASF and it kills about 90 per cent of infected pigs.

Analysts forecast pig production in China, which eats about half of the world’s pork, will fall more than during the 2006 ‘blue ear’ epidemic, one of the worst disease outbreaks in recent years, with some expecting a decline of around 30 per cent in 2019.

That would send meat prices soaring and trigger huge demand for imports.

The agriculture ministry said last week the pig herd in February had dropped 16.6 per cent year-on-year, and sow stocks were down more than 19 per cent.

China also has a patchy record of reporting disease. Details of the blue ear outbreak, which infected more than two million hogs, did not emerge until months after the damage had already been done, and the number of pigs that died is still disputed.

Like blue ear, ASF does not harm people. But it is classified a reportable disease by the Paris-based World Organization for Animal Health (OIE), a global body that promotes transparency, and member country China is obliged to report each outbreak.

“You need to move faster than the virus, it’s a very simple equation of how to control disease,” said Trevor Drew, director of the Australian Animal Health Laboratory at the national research agency, the Commonwealth Scientific and Industrial Research Organization. “If you don’t know where the virus is, you can’t stop it.”

Since August 2018, Beijing has reported 112 outbreaks in 28 provinces and regions. The increase has slowed considerably in 2019 and the agriculture ministry said earlier this month the situation was “gradually improving.”

But some suspect the disease is worse than the official data suggest.

“I am very much hoping that I am wrong, but if I consider the epidemiological characteristics of this virus disease, I would have to be extremely skeptical,” said Dirk Pfeiffer, a professor of veterinary epidemiology at the City University of Hong Kong.

He pointed to the “spatial randomness” of the reported outbreaks, unusual for an infectious disease, which normally develops in clusters.

The high rate of detection of the virus in food products carried from China to Japan, South Korea, Taiwan and Australia, as well as domestically, also indicated a much higher presence of the virus in Chinese pigs than reported, said Pfeiffer and others.

Large farms, large losses

With extremely high density of pigs, raised largely on low-biosecurity farms, tackling disease is widely recognized as a major challenge for China.

But the disease has hit both small farms and large producers, say industry insiders, despite better hygiene and training at factory farms.

“The large producers have not been spared,” said a manager with a company that supplies several of China’s top pig producers. “Everyone is trying really hard on biosecurity, but they’re still getting outbreaks, and they’re frustrated and losing hope.”

He said he knew of eight large breeding farms that had experienced outbreaks, including two on very large, 10,000-head sow farms. None were officially reported.

He declined to be named or to reveal the names of the producers because of client confidentiality.

Beijing has not officially reported any swine fever on the farms of large listed producers, whose shares are trading at record levels as investors bet the big producers will benefit from tighter supplies.

Qin Yinglin, chairman of China’s No. 2 producer, Muyuan Foods, which raised 11 million pigs for slaughter last year, said most large companies were likely to be infected.

“If you checked carefully, testing one-by-one, then for sure everyone has it,” he told Reuters in an interview. “This is a high probability event.”

He said it was “not yet known” if his firm had been hit.

— Dominique Patton reports on China’s agriculture sector for Reuters from Beijing. Additional reporting by Reuters’ Beijing newsroom.

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It was one of those long flights that sometimes do not feel purposeful — until I met a woman I will call Ju. She was a recent university graduate who was going home with mixed feelings. She wanted to see her parents but knew that the minute she landed she would be swept back into a culture that had expectations of her gender.

She was to marry a good man. She would have one child. She was to be a teacher as her father wanted. She would care for her parents and her husband’s parents in their old age. She will dream of Canada all her life, but may never live here unless she marries a Canadian or immigrates. She may forever be in the same community because that is where her family is.

Her city is her home and her concern. As coal is still burned and the winter weather cold, air pollution from heating and the nearly six million cars create dense smog. The government is cutting down on new cars and although Ju’s family has a car, getting a new one will not be easy. You have to win the draw (much like a hunting draw) in order to be allowed to purchase a car.

Ju worked hard to get a chance for a Canadian education as competition is fierce in school. Excellence is expected. Should Ju get a teaching job her salary will be around C$1,500 a month, which she claims is quite comfortable as goods, with the exception of luxury brands, are cheap.

• More with Brenda Schoepp: Don’t get thrown overboard, take ownership

But even though the costs of food and clothing are reasonable, raising a child is expensive, she said. As an only child, she saw her life as quite normal and did not embrace China’s new policy allowing for two children. The cost was only part of her decision as she reminded me that there is the societal expectation that she care for her parents and her husband’s parents. That puts up to eight persons in a very small dwelling.

“My generation,” she said, “is not interested in having two children.”

Elder care in her city of nearly 22 million is very limited and some analysts estimate the waiting list is up to 100 years long. As people live longer, the caregivers may become elderly themselves and have their own health issues. Although health care is available for families, there is a cost, and like Canada, it is determined province by province. Welfare does not exist. Families may employ help that often lives in.

A friend who has lived and worked in Beijing would describe the thousands of house labourers who sat on sidewalks visiting and sleeping on cardboard on their one day and night off. With nowhere to go and little money, these workers live on the street for that day.

This is complicated by the internal Chinese passport, or Hukou, which limits services to those who live outside of the province in which they are registered. So a day off or holiday is often spent on the street.

For Ju, a day off is spent at home and a family holiday is going to another country as she claims one very seldom stays in Beijing. Her family loves to visit Japan and of course, Canada. Sometimes, they visit relatives in the same city, but that is often a logistical nightmare and it is easier to go someplace else.

Ju showed a lot of respect for her family and her culture. I was curious and asked her about her dreams and she replied, “to find a good husband, to have one child.” Her hopes, of course, would be for that to happen in Canada, but that is a huge choice for a young woman who is deeply connected to her family and her culture.

I sensed that this love of both worlds tore at her heart.

As we neared our destination I inquired as to what she would change in Beijing if she could. “Slow it down,” she pleaded.

With the economy growing so fast, she found that even the changes between visits while going to school were overwhelming. The rapid pace stressed her even though she was from a family with financial means.

In China’s rush to ‘catch up,’ the growing pains are hitting all generations.

Certainly there are advantages to opening up the economy of the country, and the opportunity for youth to travel and be educated abroad. It is through this lens that we often view China. But visiting with Ju gave me a different perspective.

Beijing is not alone in facing the social cost of economic prosperity. Perhaps ‘slow it down’ is something to aspire to from a global perspective as we take a closer look at holistic systems in cities to ensure persons of all classes and castes can enjoy the place and space in which they live.

No doubt Ju will be a great teacher, and as a much-loved daughter will always have support. But her social and cultural world is forever structured for her in terms of traditions that even a Canadian education will not change.

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Beijing will subsidize projects upgrading or building facilities to load and receive grains along main railways and ports for major waterways including the Yangtze and Pearl rivers, a document issued by China’s National Development and Research Commission (NDRC) said on Friday.

“Setting up the special funds… will help to reduce the cost of grain distribution and improve efficiency,” the document said.

Inadequate transportation capacity for grain has caused backlog in the north and spiked prices in the past, while poor storage facilities are a major cause of grain losses in China.

China, which aims to improve its grain logistics system and boost grain storage capacity by 2020, will also subsidize grain facilities that offer storage, processing, trading and quality inspection services, the NDRC document said.

These so-called logistic parks must occupy at least 20 hectares of land and have more than 100,000 tonnes of storage capacity, the document said, adding that a single project could receive as much as 100 million yuan (C$19 million).

— Reporting for Reuters by Hallie Gu and Josephine Mason.

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The approvals of new GMO imports follow an agreement on protocols for shipments of U.S. beef to China that was also promised under the broader trade deal last month.

The new GMO varieties are Dow AgroSciences’ Enlist corn and Monsanto’s Vistive Gold soybean, the Ministry of Agriculture said in a statement on Wednesday.

China does not permit the planting of genetically modified food crops but does allow GMO imports, such as soybeans, for use in its animal feed industry.

But getting a new GMO crop variety approved for import by China takes around six years, compared with under three in other major markets, forcing leading ag chemical players to restrict sales during China’s review process.

In May, Beijing promised to speed up the evaluations of eight U.S. varieties of GMO crops by the end of the month under a trade deal with the United States.

Industry comments suggest Beijing could issue additional product approvals in coming months.

“We are aware of the latest updates of the approval process and are encouraged by the fast progress that the Chinese government has made,” said a DuPont Pioneer spokeswoman.

“We look forward to more products getting approval.”

DuPont Pioneer is awaiting approval for an insect-tolerant corn while Dow AgroSciences’ Enlist soybean is also pending approval.

The agriculture ministry said it has also renewed import approvals for 14 other GMO varieties including Syngenta’s MIR162 Agrisure Viptera corn, a Monsanto sugar beet and three Bayer rapeseed products.

The approvals are for a three-year period lasting to 2020, the statement said.

— Reporting for Reuters by Dominique Patton and Hallie Gu.

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Starting from Thursday and lasting until July 4, the Beijing municipal government will sell 50,000 kg of pork each day to 121 supermarket chains in Beijing, the Beijing Municipal Commission of Commerce said in an announcement on its website.

In addition, the government will provide a subsidy of nine yuan (C$1.78) per kg to incentivize supermarkets to cut pork prices for consumers, the statement said.

China’s raw pork prices have jumped 50.6 per cent month on month in April, the official Xinhua news agency said, citing the Beijing municipal government

Millions of small pork farmers quit the industry last year after two years of low prices and the introduction of tough new environmental rules. Their exit has reduced the number of breeding sows and curbed China’s ability to quickly rebuild its herd.

— Reporting for Reuters by Sue-Lin Wong.

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