20.05.2019 Author: F. William Engdahl

A China Food Crisis More Danger Than Trade War?

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China faces a threat to its agriculture that could do far more damage to her political stability and economy than the escalating USA tariff war. In recent months cases of deadly African Swine Fever (ASF) among the pig population of the world’s largest pig producer have forced drastic killing off of the pig population since cases were first detected last August. On top of that, more recently, Chinese grain producers have been hit by what can only be called a plague of a dangerous pest called “Fall Armyworms”, that devastates corn, rice and other grain crops. The combination hitting China as its leaders are in the midst of an escalating major trade war with the United States, could affect the world geopolitical map in ways few can imagine.

Officially, the Chinese government appears to be responding with clear determination to take necessary measures to eradicate the deadly African Swine Fever (ASF) outbreak. Beijing authorities claim that more than 1 million pigs to date have been killed. However, that has not prevented the pig contamination from spreading to all provinces of China and even beyond.

In the Chinese diet today pork is the main source of protein. China has the world’s largest pig population, over half, or close to 700 million swine. The problem is that African Swine Fever is highly deadly, almost 100% lethal to pigs, (though not, according to evidence, to humans). The disease is highly infectious which is why entire herds must be immediately destroyed and there is no medical cure known for it. The virus can exist on surfaces or in meat for days, even weeks.

In an April report the US Department of Agriculture predicted that China will have to kill 134 million pigs, equal to the entire US pig production. That would be the worst drop recorded since the USDA began monitoring in the mid-1970’s.

An April, 2019 research report by the Rabobank in Holland, a major world agriculture lender, estimates that actual ASF kills in China are significantly higher than the reported 1 million. They estimate that since initial outbreak in August 2018, deadly ASF has infected between 150 to 200 million of China’s pig population, some 100 times worse than the official numbers and has spread to every province in mainland China. The report states, “In 2019, we expect Chinese pork production losses of 25% to 35% in response to ASF. Reports of extreme losses (over 50%) are limited to confined areas.” The report adds, “These losses cannot easily be replaced by other proteins (chicken, duck, seafood, beef, and sheepmeat), nor will larger imports be able to fully offset the loss…this will result in a net supply gap of almost 10 million metric tons in the total 2019 animal protein supply.”

That is far more than official data suggest and, if true, will have drastic effect on not only animal prices, but could devastate millions of small China farmers unable to survive the losses. Accurate data are lacking as the Chinese pig production is dominated by small farmers where health security measures are more lax and contagion more likely.

Unfortunately, in a clear effort to calm the situation, the China Ministry of Agriculture issued a statement this January that there was no “ASF epidemic,” and that the government was taking adequate measures to bring the situation under control, this, though the disease had then spread to 24 mainland provinces. The suspicious timing of the reassuring statement was two weeks before the Chinese Lunar New Year celebrations, the time of the largest pig consumption of the year. Ironically this year is also the Year of the Pig in China.

The deadly pig disease has also spread to neighboring Vietnam, a major pig producer where Rabobank expects at least 10% of the herd will be destroyed, and to Cambodia. As well it has spread to Hong Kong and to Taiwan and Mongolia. The problem is that the risk of reinfection is large and experts estimate that under best of conditions, it will take China years to rebuild its pig herds.

Then Fall Armyworm Plague

At the same time as China’s pig production is in its worst crisis in decades, its grain crops are being hit by another devastating plague that is every bit as difficult to combat, spread of what is called the “Fall Armyworm,” the common name for the larvae of Spodoptera frugiperda species of moth.

According to a recent report, prepared for the US Department of Agriculture (USDA), the devastating pest, first discovered in Yunnan Province January 29, entering from Myanmar, may have already spread to a range of southern Chinese provinces including Yunnan, Guangxi, Guangdong, Guizhou, Hunan and Hainan. The USDA estimates that the Fall Armyworm, which can travel an astonishing 100 kilometers in a single night, will spread across all of the country’s grain-producing area in the coming few months. A typical Fall Armyworm moth will travel 500 kilometers in its lifespan, laying 1,000 to 1,500 eggs in total. The eggs hatch into larvae within a few days.

Chinese agriculture exports report that the worm has spread much faster than they expected. The worm is extremely difficult to eradicate. The USDA notes that, “The Fall Armyworm has no natural predators in China and its presence may result in lower production and crop quality of corn, rice, wheat, sorghum, sugarcane, cotton, soybeans and peanuts, among other cash crops.” The report adds that, “…most farmers in China do not have the financial resources and training needed to effectively manage Fall Armyworm. Even if a mitigation program is employed, costly control measures (mainly chemical sprays) will drag producer margins into negative territory for farmers of most crops that could be affected.”

China is the world’s second largest corn producer after the USA, forecast to produce 257 million tons of corn in 2018-19, according to the USDA. In the past three years, the Fall Armyworm, endemic to North America, has caused extensive economic damage across Africa, South Asia and Southeast Asia. In just two years the Fall Armyworm colonized three-quarters of Africa, according to British-based Centre for Agriculture and Biosciences International (CABI).

Meanwhile in response to US trade tariffs put in place by the Trump administration, Beijing has restricted purchase of American soybeans, making domestic soy and other grain crops increasingly important for Chinese agriculture. And poor weather conditions have impacted Chinese production of soybeans and corn due to droughts and unusually cold weather.

The double blows from African Swine Fever and the Fall Armyworm, combined with the latest escalation of US tariffs on Chinese imports, amid signs that China’s overall economy is slowing significantly, create a potentially dangerous situation whereby hundreds of thousands of Chinese small farmers are likely economically ruined and Chinese domestic food price inflation rises sharply. That is definitely what China does not need at this point.

F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine “New Eastern Outlook.”


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