China has set modernizing farms and improving food safety as key priorities this year, and analysts say this could open up the mainland's agriculture sector to additional US exports.

China also will seek to protect farmland and lend more to farmers to help narrow the income gap between rural and urban areas this year, state news agency Xinhua reported on Feb 1.

Fred Gale, an agricultural economist at the United States Department of Agriculture (USDA), believes that an increased emphasis on food safety and a push to update agricultural facilities and practices will help US companies export more to China.

"China has become the largest export market for US agricultural products," he told China Daily in an e-mail on Monday. "One of the reasons for China's urgency for "modernizing" agriculture is to counteract the effect of rising input costs by raising productivity (the output of farm products per unit of land and labor). High-income Chinese consumers buy imported infant formula and rice if they can afford it because they don't trust Chinese products. The increased attention to food safety and environmental impacts of agriculture in China will increase the demand for imports."

Dermot Hayes, holder of the Pioneer Hi-Bred International Chair in Agribusiness at Iowa State University in Ames and professor of economics and finance, said calls for market reforms "could lead to enormous imports of value-added food items."

Hayes wrote in an e-mail to China Daily that many of the country's food safety problems occurred because someone in the food chain cut corners. "This caused the Chinese consumer to lose faith in the quality of domestic food and encouraged them to look at imported food. China does not seem to have a way to stop these problems from occurring because those in charge if implementing food safety rules lack a way to track food back to the original producer. Corruption may also be an issue."

Gale said food safety is having a profound effect on Chinese agriculture.

"There are stricter regulations on the use of pesticides, requirements for treating animal manure, and dairy and meat companies are increasing the degree of vertically-integrated links with farms. With stricter requirements and a squeeze on prices, "backyard" dairy, hog, and chicken farmers are dropping out. More companies are starting large-scale capital-intensive farms, breeding stock is being imported, and the quality of feed and fodder is being upgraded," Gale said.

Food safety emerged as a major concern in China in 2014 as Shanghai Husi, a division of OSI Group that supplied meat products to McDonald's and other fast-food restaurants in China, was investigated by Chinese officials who suspected it of distributing expired meat and doctoring production dates.Wal-Mart Stores Inc said it would triple spending on food safety in China by the end of 2015 after criticism of its operating procedures and a reported mislabeling of donkey meat.

paulwelitzkin@chinadailyusa.com

(China Daily USA 02/03/2015 page2)