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Home >> Business
UPDATED: 08:28, January 24, 2006
Foreigners buy into soybean crop
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With 5,000 years of soybean cultivation, China, the home of the oil crop, now has one-third of its soybean processing capacity monopolized by foreign companies.

Archer Daniels Midland Company (ADM), an agro-giant in the United States, alone controls one quarter of it since it landed in China in 1992, according to Cheng Guoqiang, a researcher with the Beijing-based State Council Development Research Centre.

Coinciding with the rising trans-national control of the country's soybean crushing industry is the skyrocketing import of soybean, dominantly genetically-modified (GM) varieties from the United States, Brazil and Argentina.

The year 2005 has witnessed "very serious" monopolization of China's soybean processing industry by foreign trans-nationals like ADM, who are speeding up their purchasing of Chinese soybean processing facilities on a large scale, according to Cheng.

Meanwhile, 2005 is the third consecutive year in which China's soybean imports topped the 20 million-ton level to reach 25 million tons, well exceeding its domestic soybean output of around 16 million tons a year, according to Cheng.

All this took place without any public hearing, as might be required in other countries. After all, public participation in decision making, even on matters concerning their daily food security, is still alien to many Chinese.

As the world's largest importer of GM soybean, China does not even have a say on the market price, Cheng said.

China used to be the world's largest soybean producer and exporter up to the 1930s, with the United States taking over in the 1950s. The real watershed for China's soybean industry came in 1996 when its soybean imports soared to 1.11 million tons from 290,000 tons the year before, while its soybean exports plummeted from 380,000 tons to 190,000 tons.

That year marked China's shift from a net exporter to a net importer of soybean, said Wei Wei, from the Research Institute of World Economy and Politics of Chinese Academy of Social Sciences.

China opened its soybean market to the outside world long before its WTO entry in 2001, with no quota but a symbolic tariff of around 3 per cent, said Zhu Xigang, from the Research Institute of Agricultural Economy at the Chinese Academy of Agricultural Science.

Zhu said China had to import soybean because its domestic production, though increased in the past few years, could not meet rapidly increasing demand for the oil crop. And the imported GM soybean features "higher oil content, better quality and less transportation cost."

But a professor from the University of International Business and Economics, who declined to be identified, would not buy this view. "It's the demand from the soybean processing industry, not from the consumers," he said. "We were told we were short of 20 million tons of soybean a year, but we don't know where the figure comes from and who has conducted the market survey. We as consumers didn't really feel a shortage when we saw the sudden boost of imports, and of all GM stuff at that."

Environmentalists also doubt if it is necessary to import so much GM soybean even if China does have a shortage. Sze Peng Cheung, a programme manager with Greenpeace China, an environment watchdog, said that China does have its own non-GM soybean strains with high oil and protein content, only it has not developed them into industrial-level production.

But China has exported its non-GM soybean to the European Union, Japan and South Korea, where consumers maintain strong reservations or opposition to GM food. In Japan alone, the price of non-GM soybean can be 5 to 10 per cent higher than that of the GM product, according to Cheng Guoqiang.

That partly explains why endeavours to boost its domestic production of soybean have been among China's policy cards to counter foreign monopoly. In 2003 the Ministry of Agriculture (MOA) announced an ambitious plan to develop China's Northeast into the world's largest non-GM soybean production centre for exports in the next five years. If successful, China can win the Asian and European market with its non-GM soybean products.

Yet the major challenge to this plan is whether China can keep its non-GM soybean clean. With more wild and cultivated soybean varieties than anywhere in the world, China forbids any GM soybean to be grown inside its boundaries, said Chang Ruzhen from the Institute of Crop Germplasm Resources at the Chinese Academy of Agricultural Science. China also has one of the strictest bio-safety regulations in the world, at least on paper, requiring safety certificate and labelling for GM products. But with so much GM soybean imported, it is a question of whether China is able to keep a GM-free soybean zone.

Chang's institute conducted a test by growing GM soybean alongside non-GM soybean in a field to monitor natural pollination. They found that GM soybean could contaminate non-GM cultivated soybeans and wild soybeans through pollination, said the professor.

A 2004 Greenpeace report pointed out that "without effective management, imported soybeans are very likely to enter the domestic soybean cultivation system during transport, storage or processing. Once this happens, contamination may be very hard, if not impossible, to control."

To this Chang agreed. "Those farmers hired at soybean processing factories can easily bring some imported soybean back home to grow," he said.

"If such GM contamination occurs, that will certainly influence our exportation (of non-GM soybean)," warned Zhu Xigang. That is why he and some other experts strongly oppose any future plans to cultivate GM soybean on Chinese soil.

Yet some Chinese biotechnologists have already started their research on GM soybean, in some leading labs including Chang's institute and one in Jilin Province of Northeast China, according to Chang, who added that all the current research is still in the preliminary stage.

Another card to counter foreign monopoly, as some experts and industry insiders have proposed, is to set up China's own soybean industry association, as a Chinese equivalent to the American Soybean Association, to join hands in the battle against foreign monopoly, increase China's bargaining power in the international negotiations, and raise the international competitiveness of Chinese soybean industry. But the proposal is still in the air, partly because of the opposition by those importers. "But such an organization can really protect farmers and the industry at large," said Chang.

Source: China Daily

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