Huge demographic change in rural China is set to lead to higher costs of seafood shipped from China and will create a need for scale to replace the smaller players who currently produce the vast bulk of China’s aquaculture output. That’s according to a leading agronomist in Beijing, speaking to SeafoodSource. An aging and scarcer rural population, means China faces some key policy crossroads in the coming decade which will ultimately decide the scale of its meat and seafood production and imports, according to Dr. Kevin Chen, director of the Center for Agricultural and Rural Development (ICARD), jointly established by the Chinese Academy of Agricultural Sciences and the International Food Policy Research Institute (IFPRI).
Policy makers here are expected to announce reforms to China’s Soviet-era residency card system at an October meeting of the Communist Party hierarchy, which could allow at least half of China’s 600 million peasants to formally exit villages and become urban residents. This would lead to a new wave of small-scale players to exit the fish farming sector, which has this year already seen small-scale pig breeders and maize growers exit their respective sector during a current trough in China’s highly cyclical farm gate prices.
Chen believes the current average size of Chinese farm holdings — 0.6 hectares — means farms are also less attractive propositions for rural dwellers with increased access to opportunities in cities. The average monthly income of rural dwellers taking urban-based jobs was CNY 2,477 in the first half of 2013, a year-over-year increase of 12.6 percent, according to National Bureau of Statistics (NBS) data. That’s almost twice the average income of farmers in many Chinese provinces.
Reform of the residency system will speed up rural demographic changes already at play, said Chen.
“The average rural farmer is 55 so in 15 years they’ll be out of the sector, and in most cases their children are not interested in rural work,” Chen said. He believes this means there won’t be the same pools of low-cost workers for labor-intensive types of production, such as aquaculture. Yet it also means that there will also be more space to increase the “scale and mechanization” of fish farming operations, given that a previously abundant supply of cheap labor will have dried up.
“It’s the right time to achieve mechanization and scale,” said Chen. “But for this to happen we need more investment in research and development (R&D) and currently Chinese investment in agricultural R&D is below western averages.”
A key factor facing China’s aquaculture sector is the relative absence of job skilling. A 2012 report compiled by NBS shows only 10.7 percent of China’s transient rural work force received agri-technology-related training while 69.2 percent of workers received no training of any kind. The National Fisheries Technical Extension Station nonetheless claims to have more than 15,000 stations nationwide, dispensing advice to fish farmers.
Fisheries (including aquaculture) are worth USD 45 billion (EUR 33.8 billion) a year and 21 million jobs to China, according to the country’s agricultural ministry. However, aquaculture output, which grew at 5.4 percent a year in the last decade, is set to slow to 2.4 percent annual growth in output over the coming decade, according to the UN-run Food and Agricultural Organization, which cited growing environmental challenges to expansion of output.
