Agri-food opportunities in China

Over the last two years I have written, together with my colleague Xiaomeng (Sharon) Lucock,  a series of six articles on various aspects of China’s  agri-food industries. They have been published in the Journal Primary Industry Management, which is the quarterly journal of the New Zealand Institute of Primary Industry Management.

The first article, attached at the bottom of this post, was written in late 2012.

Some things have moved on since then – for example we reported in that article that New Zealand’s exports to China in the year ending 30 June 2012 were $NZ6.1 billion, which was a three-fold increase in only five years. In the two years since then to 30 June 2014 they have almost doubled again to $NZ11.6 billion. However, the key drivers of change as we set out in that article remain the same.

These key drivers are increasing wealth, urbanisation, changing cuisine, food safety, agricultural production constraints, and associated food security issues.

Since we wrote the article the growth in the Chinese economy has declined from a long-term rate of about 10% per annum down to about 7% or a little higher. However, the Chinese economy is also transitioning from investment driven economy towards a consumption economy.  In that environment the agri-food businesses continue to boom.

We reported in that paper that China has no difficulty in producing the major grains of rice and wheat required for human consumption, but that it is struggling to produce the animal feed to meet the increasing demand for milk and meat products. The challenge relates not just to a shortage of land and water, but also to labour.

In many Chinese villages there are now very few people under the age of 45. They have all gone to the cities where wages are higher. Mechanisation of agriculture is also constrained by much of the land being very steep, and the terraces are too narrow for tractors.

The pdf of the paper is here:
Woodford &Lucock NZ’s Agri-food Opportunities in China PIM Dec 2012