China's grain reforms will affect global agriculture

Subject

Grain pricing reform in China.

Significance

China's grain output fell for the first time in 13 years, government data showed on December 8, following the announcement in April of the abolition of price floors. China has committed to a more market-oriented approach to agricultural pricing, and is redefining its understanding of food security.

Impacts

• Price reform of rice and wheat will be slowest, given perceived higher social costs.
• China will align agricultural subsidies better with WTO rules, favouring subsidies for environmentally friendly products.
• China will seek greater international cooperation on agriculture as it moves away from self-sufficiency.