Growth of rigid demand on feed crops and vegetable oil is the biggest reason for China's imports of corn and soybean. GAC figures showed that among the grain imports in the first half, corn imports stood at 2.41 million tons, a year-on-year increase of 6,535.2 percent; soybean imports amounted to 29.5 million tons, up by 22.5 percent over a year ago.

According to MOA figures, China's corn supply has become increasingly dependent on imports. In 2010, China changed from a corn exporter to a net importer. With growth of breeding of livestock and aquatic products, China's corn demand is growing at an annual speed of 2 million tons.

At present, 65 percent of China's soybean demand is satisfied by imports.

However, supply of basic grain consumption is safe in China. According to figures from the Center for Chinese Agricultural Policy of the Chinese Academy of Sciences (CAS), in the past 10 years, all China's supplies of rice and wheat, major crops to feed the Chinese, have been satisfied with domestic output. This is mainly because of the changes in China's consumption structure. As resident income grows and urbanization progresses, the proportion of meat, aquatic product, vegetable and fruit consumption is increasing, while the proportion of rice and wheat consumption is decreasing. In 1990 the per-capita rice consumption of Chinese citizens was 88 kg, but in 2000, the figure declined to 75 kg and further down to 60 kg in 2009. The per-capita wheat consumption was 73 kg in 1990, but dropped to 65 kg in 2000 and 50 kg in 2009. Such tendency will still go on.

Facing challenges

Although summer grain production has increased for nine consecutive years, the resources supporting grain production are declining, making it more difficult for future grain production to increase.

Among the resources, reduction of cultivated land may become the biggest danger. According to the Rural Development Institute of the CASS, the bottom line of 120 hectares of cultivated land is likely to be broken because of the increase of land for industrial purposes and deterioration of the environment.

At present, the per-capita cultivated land in China is 0.11 hectare, 47 percent of the world's average. In one fourth of China's counties, the per-capita cultivated land is lower than the security line of 0.05 hectare set by the UN Food and Agriculture Organization.

Moreover, as a result of environment pollution and improper cultivation by farmers, the quality of some cultivated land is deteriorating, and the sustainable production capacity of land is affected. In some places, grain production is restricted by serious water shortages.

"China's population growth is expected to remain high for the next few years. Since China has to feed a growing population and improve the people's living standards with a limited amount of cultivated land, the prospect of grain security is not optimistic," said a document of the CASS Rural Development Institute.

In China, growth of grain production cost is higher than that of output value, reducing the yield rate and affecting the future stability of grain production.

According to figures from the Center for Chinese Agricultural Policy, the yield rate of paddy, wheat and corn production in China dropped from 30.6 percent in 1998 to 24.3 percent in 2009, and that of soybean production from 37 percent to 22.1 percent. Among various kinds of farm produce, the yield rate of grain production is much lower than those of cash crops, such as oil- and sugar-bearing crops, cotton and vegetables. Although the government has granted subsidies to grain planting and set minimum purchasing prices for grain crops, the subsidy is still lower than the growth of production costs.

Further, as urbanization accelerates, more young people are apt to leave rural areas and abandon their would-be lives on the family farm. This outflow of agricultural labor is also intensifying the decline in agriculture production.