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Wen Tiejun: Food is not a problem, the financialization of food is the biggest problem!

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The complexity of food security: four key discussions

Food security is a complex and long-term issue involving the intersection of factors such as agricultural policy, economic globalization, land use and food production. Over the past few decades, we have witnessed four important discussions on food security, all of which reflect the diversity of food issues and their close links to macroeconomic factors. In this article, we will review these key discussions, highlighting their relationship to the issue of food production.

Wen Tiejun: Food is not a problem, the financialization of food is the biggest problem!

First discussion: rural reform and development in 1985

In 1985, there was a discussion about food security in China. At that time, China was implementing the household contracting system, rural township enterprises were growing rapidly, and farmers left their homeland to work in these rural enterprises, and their incomes increased significantly. Suddenly, however, in 1985, food production declined because of the increased incomes of urban dwellers, which led to an increase in demand for non-staple foods. In order to meet market demand, farmers have spontaneously reduced the area planted with grain, while some sectors have adopted policies of restriction and price reduction for grain purchases. This is not caused by the food problem, but by the adjustment of the rural industrial structure.

Second discussion: the impact of globalization in 1995

Around 1995, China began to integrate into globalization, and a large number of foreign-funded enterprises poured in, which promoted the outflow of labor. At the same time, rural enterprises fell into a serious recession, and farmers went out to work. An American commentator, Lester Brown, argues that if China is to modernize, urbanization will put enormous pressure on agricultural land, because urbanization requires large-scale land occupation. This argument has sparked some discussion in the country. However, China has responded to this challenge by asserting that its grain production can meet domestic demand, emphasizing higher yields per unit area. Although food production did not decline significantly during this period, this discussion made food production a key indicator of food security discussions.

Third discussion: land acquisition in 2003

Wen Tiejun: Food is not a problem, the financialization of food is the biggest problem!

Around 2003, China faced large-scale land acquisition. Local governments occupy agricultural land on a large scale in order to attract foreign investment and promote economic growth. The central government has emphasized the arable land protection system, but the actual rate of land loss is still rapid. During this period, discussions focused on how to effectively regulate land use, rather than food production itself. This reflects the complexity of macroeconomics and the direct impact of land policy on food security.

Fourth discussion: The post-2008 global financial crisis

When the global financial crisis broke out in 2008, China's export-oriented economy was severely affected, and the real economy fell into a serious recession. Money has flowed to the real estate market, while land development still requires the occupation of agricultural land. Local governments began to use farmers' collective construction land for urban construction, and even allowed the adjustment of cultivated land indicators across cities and counties within the province. However, the discussion remains focused on land rather than food production.

The four discussions on food security highlighted that they were not actually caused by food production issues. They reflect more of the direct impact of macroeconomic factors, such as industrial structure, land policy and globalization, on food security. More recently, we have also witnessed the impact of the financialization of food on global food markets, which has forced us to rethink the nature of food security. In future discussions, we need more data- and fact-based analysis to better understand and address real food security issues. The new challenges of food financialization and globalization

As the world continues to evolve and the issue of food security becomes more complex, new challenges have emerged, most notably the financialization of food and the impact of globalization. These two factors have had a profound impact on food markets and pose new challenges to ensuring global food security.

The financialization of food is a new phenomenon that refers to the transformation of food markets into objects of financial speculation. After the 2008 global financial crisis, the ultra-quantitative easing triggered massive liquidity injections that flowed money to commodity markets, including food. This has led to sharp fluctuations in food prices, which pose great challenges, especially for countries that are highly dependent on food imports. This phenomenon calls for a more vigilant focus on the stability of food markets to avoid the impact of price volatility on the poor.

Globalization is also driving the evolution of food security. As global supply chains expand, food markets become more globalized, international trade becomes more intertwined, and food dependencies between different countries become more complex. Relying on imported food can be a double-edged sword for a country's food security. While food trade can provide diversity and economic benefits, it also makes countries more vulnerable, as fluctuations in global food markets have a direct impact on domestic food supplies.

In this new environment, we need to rethink the definition of food security. Food security is not only about domestic food production, but also needs to take into account the impact of globalization and food financialization on supply chains. The rise of food financialization has made food prices more volatile, while globalization has made food markets more vulnerable. This requires closer cooperation by the international community and effective measures to ensure the sustainability of global food supplies and reduce the volatility of food markets to ensure that everyone has access to adequate food.

Wen Tiejun: Food is not a problem, the financialization of food is the biggest problem!

Summary:

The complexity of food security is undeniable, and every discussion on food security reflects its complex links with macroeconomic factors. Over the past few decades, we have experienced four critical discussions, all of which remind us that food is not an isolated issue, but a complex one intertwined with globalization, land policy, food financialization and many other factors. Today, the financialization and globalization of food have created new challenges to food security that require a global effort. Ensuring that everyone has access to adequate food is an urgent task and a shared responsibility.

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