Crops

Perspective: Decades of shady tactics have given China a leg up in the ag industry

jack dewitt

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Is it too late to reform China? China has been stealing technology since the 1980s. Big corporations have been complicit, for the most part. In order to have access to the vast Chinese market, they have been required to have Chinese partners, who then have access to the company’s secrets. And our universities have been eager to accept thousands of Chinese students, students who are smart and make excellent researchers. That can benefit the U.S. as well as China — and that is OK providing that intellectual patents and copyrights are respected.

But China has a poor record in that department. In some cases, Chinese researchers have taken jobs in tech companies and have stolen industrial secrets to benefit Chinese companies.

The pilfering of technological secrets has not been limited to the manufacturing sector. Agricultural companies have suffered thefts of proprietary seeds — GMO seeds that cost millions of dollars to develop. In 2014 an investigation resulted in the exposure of a group of seven Chinese nationals who conspired to steal seeds from America’s largest seed companies, sometimes by surreptitiously digging up freshly planted corn. One was arrested, and the other six fled to China. They were employees of a Beijing technology company, and had been stealing U.S. seeds since 2007.

China aspires to be the world leader in seed breeding, as it also aspires to be the leader in most industries in the 21st century. They may well succeed, even if President Donald Trump succeeds in getting concessions on patent and intellectual protections. They have stolen enough trade secrets in the past 30 years to be well on the way to establishing their own innovative society. It’s too late, in my opinion, to stop their momentum with tariffs and threats.

They don’t have to steal seeds any more to be competitive. When Chemchina, a state-owned company, bought Swiss chemical and seed giant Syngenta in 2017, it gained access to one of the world’s largest portfolios of patented seeds and agricultural crop protection products. Plus a leading edge research and development program in all things agricultural.

China may soon be a leading source of new GMO germplasm. “China’s national agricultural research system is the largest publicly funded and administrated research system in the world,” according to the Food and Agriculture Organization of the United Nations. Chinese President Xi Jinping has “declared GM crops a top national priority.” Their 2011-2015 five-year plan stated they would “speed up the innovation and application of biotechnology breeding in agriculture.” All this while the general population has negative views of GMOs similar to Western democracies. While the democracies of the West can’t ignore public opinion, and as a result must change their breeding tactics, authoritarian governments can, and their research can move ahead at full speed while waiting for the “reeducation” of the public.

So any declared victory over China in the trade war will likely be unimpressive. In the meantime, America’s farmers have paid a steep price, especially soybean growers. Markets interrupted will be difficult to revive, if not impossible. The dependability of the U.S. exporter has been damaged in the eye of all buyers, not just China.

This is the third market intervention by a president that I have lived through. The first was President Richard Nixon’s 1973 soybean embargo. In 1972, Russia surprised the world by buying up cheap, surplus wheat, mostly from the U.S., to feed their livestock instead of slaughtering them as they had done in the past when internal feed was in short supply. Then 1973 brought unfavorable worldwide weather for crops, and the cushion of surpluses had disappeared. Panic buying by importers ensued, and Nixon was afraid the U.S. would not have enough soybeans for domestic consumption. He embargoed soybeans that had already been sold to Japan, our biggest customer. The Japanese were understandably infuriated, and the embargo was lifted five days later, but limits were put on how much could be shipped on existing contracts. Subsequently, Japan decided to never again rely on one supplier, and poured money into Brazil to help them expand their fledgling soybean industry. China is already doing the same, they will likely never buy as much soybeans from the U.S. as in the past, at least not for many years. And the same is true for wheat and other crops to a lesser extent.

Following the 1972 sale of wheat to Russia, yearly exports to that country became an important market for U.S. wheat growers. Then in 1980 President Jimmy Carter embargoed wheat sales to Russia as punishment for invading Afghanistan. Besides that, Northwest wheat growers lost an important white wheat market when the Shah of Iran was overthrown in 1979 and hostages were taken in the U.S. embassy. These were not the only causes of the severe depression the agriculture sector suffered in the 1980s, but they sure weren’t helpful.

I’m not sure what the future brings, but farm bankruptcies are on the rise. Let, hope it’s not 1980s déjà vu all over again.

 

Jack DeWitt is a farmer-agronomist with farming experience that spans the decades since the end of horse farming to the age of GPS and precision farming. He recounts all and predicts how we can have a future world with abundant food in his book “World Food Unlimited.” This article was republished from Agri-Times Northwest with permission.

Any views or opinions expressed in this article are those of the author and do not reflect those of AGDAILY. Comments on this article reflect the sole opinions of their writers.
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