Nevertheless, the associate director of the UC Agricultural Issues Center (AIC) presented a remarkably cloudless picture of what he believes California and the rest of American agriculture could expect from a rapidly evolving China agriculture.
One the world’s leading specialists on China’s agriculture, Rozelle told the 2003 Spring Outlook Forum in Sacramento, Calif., sponsored by AIC and the California Chapter of the American Society of Farm Managers and Rural Appraisers China is quickly moving away from producing commodity crops like cotton, rice, soybeans, corn and wheat to high value crops like peaches, vegetables, wine and table grapes, strawberries — almost all crops produced in California.
China, said Rozelle, is willing to import increasingly more basic commodities and devote land where that once was grown to trees and vines and vegetables.
That would be welcome news in Champaign-Urbana, Ill., and Memphis, Tenn., but it strikes fear into an audience of California agriculturists.
China’s marketing and transportation infrastructure and the quality of its horticultural crops are still fall woefully inadequate by California standards. However, the largest peach producer in the world and home to one of the fasting expanding strawberry markets in the world is catching up quickly in all horticultural crops.
Markets by phone
As rural China modernizes with improved phone and electrical service, the farmers in China are quickly learning the ways of the West. They hang onto cell phones to get the latest market information and the use of on-farm refrigeration is growing.
China represents both a competitor and customer of California products, said Rozelle.
Chinese strawberry and peach producers may not be sending boatloads of fresh fruit sailing into California any time soon, but they are and will be sending more of their crop into markets like Korea, Japan and Taiwan where California also sends its horticultural crops.
More than 5 percent of the farmland in China is planted to orchards. That may not seem like much until you realize that it is a higher percentage than what is planted to horticultural crops in France and European nations. China has almost doubled its fruit production area in the past decade and more than doubled vegetable production in the same period.
Over that period China has basically added the vegetable production equivalent to California every three years, said Rozelle.
California and China produce much the same agricultural crops. Notable exceptions are almonds, milk, walnuts and pistachios, which Rozelle said California will "probably always hold an absolute advantage over China."
"The Almond Board of California has done a remarkable job of promoting California almonds in China," said Rozelle.
California’s vineyard acreage exceeds China’s by a factor of three, but that is changing very fast.
"Last spring I was in Sydney, Australia where I learned that at the end of the spring crush there, almost 60 percent of Australia’s winemakers get on planes and go to China where the Australians are very aggressive in investing in China wine grapes," said Rozelle.
Australia has emerged a major competitor of California wines. Rozelle said the Aussies contend wine from China is almost as good as Australian wines.
While the enormous production potential poses a threat to California in the world marketplace, Rozelle said right now the greater focus is on supplying a rapidly modernizing, urbanizing and westernizing urban population within China. Rozelle said 90 percent of China’s fruit and vegetable consumption is domestic.
About 300 million of China’s 1.3 billion people live in the cities where consumption of fruits more than tripled from 1984 to 2000. As China’s 900 million rural inhabitants continue the migration to urban areas, Rozelle said that should continue to grow.
The remaining 10 percent of China’s production represents direct competition for California in so called third markets. And, Rozelle said Chinese horticultural crop producers are quickly elevating quality to meet the demands of world markets.
China’s more open society is attracting agricultural investments from other countries as well. Rozelle punctuated that with a story about one of his visits to a remote area of China where. He said he heard the unfamiliar sound of a diesel truck and went to investigate.
"It was a refrigerated truck with the name of a Korean fruit importer painted on the side. It backed up to an old barn and when the driver opened the door, inside was a large refrigeration unit," he said.
Apple growers in that small village had been given new varieties by a Korean importer who had taught producers how to grow and pack in Styrofoam cartons apples for Korean supermarkets just a few days from harvest.
Although Rozelle has very solid information, he acknowledged that it is difficult to predict with certainty what China may do, especially now since it is an official WTO member. He suspects China will respond more to open marketing than to a protectionist philosophy like Japan.
The question is what is California to do against such overwhelming odds where workers only earn $1.70 per day. Rozelle said California cannot ignore China nor does it have much chance of winning anti-dumping cases through the WTO.
Rozelle said California can stay ahead by advancing faster than China in research and promote and differentiate California products into the Chinese market. "California continues to have a very large edge in technology, quality and marketing," he said.
And, it may be time for California agriculture to become "investors and partners" with Chinese much like what has happened with NAFTA. Other nations are doing it. Why not California?
"In talking to the ministry of agriculture, he said he hopes China horticultural crop production will expand faster than domestic demand and that China will play a major role in world markets," said Rozelle.
It has gone from exporting about $400 million a year in ag products to $1.5 billion in less than two decades and that trend is not likely to be reversed.