Giving Responsible Soy a Fighting Chance in China
How large is the soy production in China and what are its future prospects considering China is the now the largest importer of soy in the world?In recent years, we have witnessed a steady decline of China’s domestic production, from 15 million tonnes per annum (late 2009) to 12.8 million tonnes (in 2012). The root causes of this decline are:
- Domestic production is primarily achieved by smallholders with an average land holding of less than 1 hectare per farmer. As a result, average production costs and productivity levels in China are not competitive at all compared to average levels in the Americas.
- Though Chinese soy production is 100% non-GM, soybean price in the domestic market is heavily influenced by the international market price for GM soybean (or imported GM soybean to Chinese ports). This is not fair but it’s the reality.
Currently, China is importing about 60% of the global soybean trading volume. Such momentum will be maintained, as long as the national economy keeps its current pace: steady growth in demand for meat & dairy products among Chinese consumers will lead to steady growth in demand for feed and soybean imports, as China doesn’t have the resources such as arable land and water to ensure sufficient domestic production of soybean to meet this huge demand.
Domestic soybean production is going to decline unless the Chinese government intervenes with better enabling policies such as more subsidies, if not increased tariff (currently only less than or equal to 3%).
What specific aspects of soy production practices in China is Solidaridad trying to change?A chronic problem among soybean farmers, either large scale or smallholder, is the heavy amount of agrochemicals used such as pesticides and fertilizers, which leads to soil and water erosion, and pollution. Among smallholders, big problems include the lack of access to technical support, little or no mutual support mechanism, and little or no knowledge of the need for sustainable production. In the end these probems lead to low productivity and poverty. The fundamental goal of the Solidaridad /CSIA project is to change producers’ mindsets, so that they can eventually adopt and benefit from more sustainable practices.
What are the specific challenges that NGOs face in improving the livelihoods of farmers (including soy) in China?Firstly, NGO development in China is still at its nascent stage. It is ten time more difficult to register a NGO in China than registering a regular business. Among the existing NGOs or quasi NGOs (those doing NGO work but registered as business), the vast majority are primarily doing work in the manufacturing sector, such as running CSR initiatives among China’s factories. So in general, sustainability and responsibility in the agricultural sector is largely ignored. For example, as far as we know there is not a single local NGO promoting sustainability in Northeast China, the nation’s soybean basin.
Secondly, as China is now the world’s 2nd largest economy, even for a limited number of international organizations which are indeed dedicated to sustainability in the agricultural sector, it is getting extremely difficult to secure international development funding for sustainability or poverty alleviation in the country. This is despite the fact that China still has more than 120 million undernourished people, primary in rural areas.
What is the Farmer Support Porgramme and what are you aiming to achieve?What were the selection criteria for choosing the Sinograin North and Nenjiang farm for the RTRS pilot?
As China imports about 60% of global soybean trading volume, it’s safe to say that without China, any global initiatives (such as RTRS) to promote sustainability and/or responsibility in soybean sector would be incomplete. So the key purpose of launching a pilot project with Sinograin North and smallholders in Nenjiang was to explore and secure China’s contribution to the global efforts of promoting sustainability. Sinograin North is a well-know flagship soybean producer in China, so we hope to develop business cases with Sinograin North first, then we will work with them to influence smallholders in Nenjiang county. Eventually we would like to demonstrate that RTRS is a well developed system which can benefit large-scale plantations and smallholder farmers.
This project officially started in May 2012. We have offered a series of baseline assessment and training sessions (benchmarked against RTRS principles and criteria) at Sinograin North (with 26,000 hectares of harvest area). Our efforts so far have already helped Sinograin North to improve its internal management system, overseeing both productivity and sustainability. Hopefully by 2013, we can help Sinograin seek China’s first RTRS certification.
In addition, we are working on developing a programme for smallholders located around Sinograin. Hopefully, by 2015 up to 30,000 smallholders can also benefit from improved organizational capacity, productivity, and expertise to access markets, which eventually will lead to better incomes and livelihoods.
With regards to the Project’s 2015 goal of "A better market price as a result of the introduction of better soy variety and (higher level protein)", how are the new varieties responding at the farms?CSIA realizes that at this point, it’s impossible to expect a decline in imported soybean. To help millions of smallholders in China to survive, the only way out is to adopt a differentiation strategy: i.e., Chinese soybean farmers focus on producing non-GM, and high-protein level soybean used for food and human consumption, while keeping imported soybean for the feed industry. CSIA, with support from Solidaridad and other organizations, will keep on lobbying the Chinese government to offer more favourable policies in support of such an initiative.
Based on your experience so far with the first 2 farms, what are the prospects of scaling up the transformation process towards RTRS standards across China?Favourable market linkages will be the key to RTRS’ scaling up in China. CSIA and Solidaridad strongly believe that Chinese producers can make anything so long as there is well defined market demand. To promote RTRS in China, it is not enough to work with producers at the upstream level only. Major efforts by stakeholders in China and beyond should be made at the mid and downstream level as well, so that key stakeholder in the soybean value chain, including producers, crushers, traders and retailers, reach a balance in terms of various interests and defined responsibilities. This is a necessary condition to see RTRS fly in China.
What are your expectations for the RT8?The RTRS principles and criteria represent progressive global concepts, which are also in line with China’s national policy on future economic and social development. RT8 will offer, maybe for the first time, a very rare platform to gather leading soybean stakeholders in China and beyond to jointly work out a common strategy and effective solutions to address challenges such as sustainability, food security and food safety around the globe.
We understand that to achieve such a goal, one conference won’t be enough. We hope RT8 will open a window of opportunity so that leading soybean actors around the world can make continuous and concerted efforts to create a more sustainable and responsible global soybean value chain.