[This post was first published in the Fairfax NZ Sunday Star Times on 25 May 2014.]
Last week I wrote about one specific region in China’s pastoral zone, high on the Qinghai Tibetan Plateau. This is just one part of China’s pastoral zone which extends for thousands of kilometres from Inner Mongolia across to Xinjiang and down through the western provinces of Gansu, Qinghai and Tibet. The precise numbers of sheep on these lands is unclear. It is not because the Chinese Government hides the correct numbers, but because pastoral farmers keep the numbers to themselves. The United Nations FAO agency estimates that in 2012 there were 187 million sheep in China, but no-one really knows.
What happens in China’s pastoral zone is important to New Zealand for two reasons. The first is that we are all part of a global environment, with sustainability a global issue. The second is that China is now New Zealand’s most important market for lamb and mutton; the gap between local demand and supply in China is the key driver of sheep industry profitability back here in New Zealand.
The problems of China’s pastoral zone are huge. The human populations that depend on these lands for their livelihoods have been increasing but the capacity of the grasslands has been declining. Sandstorms and dust storms are common. In some areas, such as parts of Inner Mongolia, livestock have now been totally removed from vast areas. But in the western provinces the specific human issues make that far more challenging.
Just as in New Zealand, there are diverse political perspectives. There are strong environmental lobbies that argue for ecological sustainability, and linked to this there is a particularly strong lobby for organic farming systems. However, the science behind these organic systems is very limited. Rock phosphate, which we use in organic systems in New Zealand, is totally ineffective on the high alkaline soils which predominate across much of the Chinese pastoral zone, and that creates fundamental issues of sustainability.
No pastoral system can be sustainable without nitrogen fixing plants, and these systems require a supply of phosphorus, potassium and trace minerals. It is possible for small areas to be sustainable through ongoing introductions of dung-based organic fertilisers, but over whole provinces this is impossible. There is simply not enough dung. As long as livestock products are going to be removed from the pastoral zones to the cities, then there has to be a return of nutrients from other sources.
Chinese farmers receive higher prices for their sheep than New Zealand farmers. Sheep are typically sold on a liveweight basis, currently at about $6 per kg. This is about 2.5 times what New Zealand farmers receive. Within the pastoral zone, bone-in cuts of mutton sell in the local shops for about $9-$10 per kg. The off-cuts which we throw away are what brings the overall liveweight return to $6 per kg.
Back on the farm, high protein supplements cost about 60c per kg, and this can be economic if it results in lambs reaching a slaughter weight before their first winter. However, the long term solution has to be the introduction of nitrogen-fixing plants such as clovers and other legumes. Even then, current stocking rates will almost certainly be non-sustainable.
Mutton is hugely important for China’s Muslim communities, who do not eat pork. There are at least 23 million Muslims in China and this population is increasing. Also, mutton is important for at least five million Tibetans. And then there are some hundreds of millions of northern Chinese of Han ethnicity (China’s major ethnic group) who also like to eat mutton. In the supermarkets of the major cities, mutton sells for two to three times the price of pork and chicken.
Back here in New Zealand our meat companies are nervous about the amount of lamb and mutton that is going to China. As one meat company CEO told me recently, his Board had instructed him that no more than 35% of total sales should go to China. However, product always flows to where the prices are best, and he now has to tell his Board that 50% is going to China.
If the New Zealand industry understood more about the dynamics of the China market, they would be more relaxed about the increases that are occurring in the China trade. The Chinese are not going to restrict the volumes coming from New Zealand, as it is not in their interests to do so. That would only increase the shortage of mutton in the market place, and be a potential source of unrest. Therefore, if problems do occur in the lamb and mutton trade to China it will only be because we in New Zealand have messed up in some way. Our focus needs to be on making sure we do everything by the rules, and that we are not our own worst enemies.