Miller Magazine Issue: 152 August 2022

91 COUNTRY PROFILE MILLER / AUGUST 2022 gies, such as genetically modified (GM) seed lines, all in an effort to bolster food security. Recognizing its challenges, China has also gone abroad to address its needs through investments and acquisitions of farmland, animal husbandry, agricultural equipment, and intellectual property (IP), particularly of GM seeds. NEW GRAIN PRODUCTION SUPPORT POLICY SYSTEM Despite the profound transformation in the ag- riculture sector over the past forty years, China’s agricultural production and operations still rely extensively on smallholders’ participation. It is estimated that there are still more than 200 mil- lion smallholder farmers in China. Although the increasing costs of production and the lack of suf- ficient scale to be competitive make the smallhold- er model unviable, and certainly unsustainable, in the long-term, it is likely that a full transition to a large-scale and mechanized agriculture will take some time, and that smallholder production will remain an important feature of China’s agriculture sector for still some time. At the same time, the rising demand for high-value agricultural products from an expanding urban middle-class, the rapid transformation of the agrifood value chains, and the spread out of technological innovations open up opportunities for smallholders, as high-value products are more labor-intensive to produce and generate a higher return per hectare. Ensuring high grain production and a high self-suf- ficiency rate has long been the primary objective of China’s agricultural policy, and the focus of its regu- latory objectives and domestic agricultural support policies. The grain price support policy has been among the important and effective policy tools in China’s agricultural policy system over the past de- cade. However, as the integration of domestic and international markets has deepened in recent years, the pressure for “non-essential imports” of grain has intensified. The price support policy has not only posed certain challenges to the effective operation of the domestic grain market, but has also left room for other countries to question, or even sue, Chi- na for distorting the international market. In order to adjust and improve its “amber box” measures and expand the application of “green box” mea- sures, China has been implementing a series of ini- tiatives since 2016 to explore the construction of a new grain production support policy system. These pilots include “market-oriented purchase” plus “di- rect subsidies” under its corn policy; adjusting the minimum purchase price policy for rice and wheat; and transforming and upgrading policy-oriented ag- ricultural insurance. As the world’s most populous developing country, the current exploration of Chi- na’s agricultural support policies, while adapting to international rules, including whether they can safe- guard the interests of domestic farmers and balance grain supply and demand and what adjustments and improvements will be needed in the future are im- portant issues that deserve an in-depth analysis.