Fruit and vegetable growers always earned a living by providing neighbors with healthy foods. Today, those neighbors are spread throughout the world, presenting the once-simple fresh produce trade with vast and extremely complex new opportunities and challenges.
In a January 2023 report by The Global Coalition of Fresh Produce — an international alliance of industry associations — the organization states: “Among many other positives, the fruit and vegetable sector is playing an increasingly important role in many developing countries due to its economic potential and its relevance for food security.”
The economic and strategic benefits are certainly apparent to national leaders, such as Zippy Duvall, president of the American Farm Bureau Federation, who in late February testified before the U.S. House Committee on Agriculture. “The country that cannot feed its people is not secure. So, the strong farm policy that supports a strong food policy is truly a part of a smart national security strategy,” he said.
Optimistic about the future of a well-fed global population is Allen Featherstone, who is department head of the College of Agriculture and Agricultural Economics at Kansas State University in Manhattan, KS. As global incomes rise, he foresees improved and diversified diets. At this moment, “We may be in a recession, or we may not be in a recession. But if you look at the long-term trend, per capita income is increasing. So, with increasing incomes, people tend to diversify their diets.”
For the regions that have primarily relied on grain-based diets, fresh produce and proteins would be the two big categories that people could add to what they eat regularly, says Featherstone. Those regions already high in fruit and vegetable consumption will likely demand more proteins and grains in their diets. Increased dietary diversity can come from products within a country or benefit from food imports. Either way, he says, “Food is going to be much more important as we go forward.”
Global produce industry consultant Alicia Adler, who is vice president of marketing and business development for Bryant Christie Inc., an international market company based in Seattle, is also positive about emerging fresh fruit and vegetable trade. To that end, she points to the world’s largest markets, China and India.
Featherstone says that in an increasingly sophisticated culture, “Typically, people just diversify their diet. And that’s not just a phenomenon in the United States. It is a phenomenon globally as people get more income. The ability to experience different tastes and textures is a good thing.” Specifically, he notes, China is already seeing diversification in the diet with the addition of more animal protein.
Adler says China and India both have a rising middle class. For countries with emerging economies and greater purchasing power, she sees a heightened priority for better food quality and specialty fruit. Globalization, with sophisticated media and social media, has created a remarkably connected planet creating a food culture melting pot. She sees the produce industry boosting new opportunities by extending shelf life through genetics and technology. New fruit and vegetable varieties are being bred to taste better, travel well, and ultimately last longer at the point of purchase.
The Global Coalition of Fresh Produce says that international fruit and vegetable trade ensures that a wide variety of produce is available to consumers year-round and reduces the risk of supply chain interruptions. The group notes that fresh produce exports are a critical source of income for many producers and an engine of economic activity worldwide; they generate important foreign exchange and are a major driving force for sustainable development in many low- and middle-income countries.
Ag economist Featherstone observes that countries with the greatest population growth are not where the food is in terms of excess production. “And so, I think governments are going to have to think through what’s less distasteful, trade or emigration? And, unfortunately, policymakers seem to be for neither one of them. But look where the population is and where the food is produced — a lot of the food is produced in the Western Hemisphere, and a lot of the population is going to be in Asia and Africa. So, you’re going to have to move people to areas of food, or move food to areas of people. From a global perspective, I think we’ll be able to meet food needs, but it’s a matter of getting it to where it needs to be.”
Adler, among many other sources, expresses concern that trade barriers are a big hurdle for the future of world trade. When the Trump administration pulled out of the Trans-Pacific Partnership in 2017, Adler notes there was an intention to replace this with numerous bilateral trade agreements. This work was left incomplete with the change in administrations, and now without a national focus on global trade policy, “the U.S. in particular, is falling behind. The Chinese and Indian markets are increasingly difficult to access.”
Produce growers in Australia and New Zealand are among global sources exporting to India, says Adler. Fresh exporters in Chile, Peru and Mexico are undoubtedly targeting India and Europe for trade. Of course these countries also ship heavily to the United States, which is the largest — but also a very saturated — market. It is saturated because a great deal of competition is vying for shelf space.
Meanwhile, U.S. exporters face regulatory trade barriers which ultimately represent “a huge threat to global food security. Consumers should have access to year-round supplies. It is becoming harder and harder to export,” notes Adler.
China and India each have a desire to regulate trade and protect their own industry concerns. “That’s valid if it’s based on science, but that is a huge barrier to exporting. The two countries are increasingly difficult for reliable market access.”
Adler, who has a background in the U.S. specialty crop business, says U.S.-grown fruit products, such as apples, pears, cherries and blueberries, are being exported to serve India’s growing demand. India is starting to grow its own specialty crops, including fruit, but there is nowhere near the volume needed.
An Uncertain Food Security Outlook
Featherstone notes that the global population will approach 10 billion by 2050. With this, “A couple of places are pretty important. One is China. One is India.”
Bloomberg reported on Jan. 17, 2023, that India’s burgeoning population has topped 1.417 billion, just nosing out China’s 1.412 billion. This, of course, now places India as the world’s most populated nation. Other sources show the total global population is now 7.9 billion, illustrating that 35% of the world’s population lives in two countries. With 336 million people, the U.S. ranks as the world’s third-most populous country, with 4% of humanity.
In cooperation with other organizations, China Agricultural University’s Academy for Global Food Economics & Policy (AGFEP) released the lengthy 2022 report: China & Global Food Policy. It notes that at the National Committee of the Chinese People’s Political Consultative Conference in March 2022, President Xi Jinping emphasized the need for a ‘Big Food Concept’ to ensure the effective supply of meat, vegetables, fruits, aquatic products and other types of food, while sustaining the supply of staple grains.
“To establish and apply this Big Food Concept, a shift in the focus of food security is required, that is, from ensuring the supply of staple grains to the adequate supply of diversified food products.”
AGFEP also reports that China punches above its weight, feeding 18% of the world’s population with 9% of the world’s arable land and 6% of the world’s freshwater resources. This contributes to “the global goals of hunger eradication and food security,” it says. “However, due to improvements in people’s living standards and the upgradation of the food consumption structure, the total food consumption and the total food supply in China reveals a gap, and certain foods are particularly undersupplied.”
Regarding the potential of internal production in China and India, Featherstone says the latter is on par with the U.S. in terms of the amount of arable land. But in India, almost every available space is used for production. Some regions have large-scale commercial farms, but elsewhere Indian farm parcels are very small because land is subdivided through family inheritance. “Dividing is problematic for efficiency,” he says.
Meanwhile, India’s government is very aware of the struggle for sustenance and of the need to provide cheap food. Ag policy encourages domestic production and subsidies for commodities like rice. Last year, India shut off wheat exports to keep domestically produced supplies in India after Russia interfered with Ukrainian wheat exports. While India has been restrictive with its internal food policy in order to gain food diversification, the country needs to become more open to international trade, says Featherstone.
China Buying Global Ag Assets
Featherstone reports that a recent food security report shows China has recognized it may struggle to feed its population. In two steps toward that end, state-owned ChemChina in 2017 purchased Swiss pesticides and seeds group Syngenta for a landmark $43 billion, while just a few years earlier China’s WH Group purchased U.S.-based Smithfield Foods, the world’s largest pork producer, for nearly $5 billion.
It’s no secret that China over the past decade has addressed its food sustainability with agricultural land purchases around the world. Chinese acquisition of U.S. farmland — “all over the country and certainly in the Midwest”, says Featherstone — increased quite substantially. Between 2010 and 2021, Chinese farmland ownership in the U.S. leaped 455%, from 69,000 to 384,000 acres.
One purchase recently set off alarm bells in Washington D.C., when in 2022 the Chinese agricultural company Fufeng Group bought 300 acres of land and set up a corn milling plant last spring in Grand Forks, N.D. The plant is a 20-minute drive from a strategic Air Force base.
Featherstone notes that in the past decade, there has been a six-million-acre increase in all countries owning farmland in the U.S. The rise went from 14 million to 20 million acres. He adds these numbers are skewed upward because Italian companies purchased a great deal of land to build wind farms in the U.S. Nonetheless, just in this century, the amount of U.S. farmland owned by other countries has gone from 1.2% to 3%. These purchases are viewed in different ways. “If the buyer is from a friendly country there is less concern than if they are from a foe.”
Featherstone notes that people are becoming more concerned. A challenge to addressing the topic is that data is not publicly available. “But with geospatial information, we can look where there are holdings in relation to other things people might be concerned about.” A widely reported purchase “in North Dakota certainly was close to a military base. There are places in Kansas that could be sold to a foe, and people really wouldn’t care.”
In November 2022, Texas State Senator Lois Kolkhorst filed Senate Bill 147, which would ban citizens, governments and entities from China, Iran, North Korea and Russia from purchasing Texas land. By March, she softened the bill to protect innocent immigrants in Texas from the initial broad legislative swipe. But she defends the intent of the bill, which aims to “secure national security for our state and our country because of the role that Texas plays in national security with all of our military bases and strategic refineries and different things we have here.” Texas Governor Greg Abbott reportedly supports the bill.
Featherstone notes that in Africa too, there are worries about Chinese investment. “The big concern is essentially that China realizes it can’t produce the food it needs for its people — so the strategy is encouraging conglomerates to gain greater control of the country’s food supply chain, and that is something that certain individuals are concerned about,” he says.
It is a world of subtleties. What might be considered OK in western Kansas is not OK in some parts of North Dakota. Some trade barriers are fair. Others threaten consumer well-being. Trade policy changes don’t translate from one U.S. administration to the next. Meanwhile, innovative technologies widen doors to tastier fruit varieties, better transportation, improved communications, logistics, cultural sharing, health and a higher quality of life. As populations expand by the billions, producers around the world have new opportunities to feed their neighbors, wherever they may be. These changes will alter life in many quarters, but evolutions in India and China will drive a revolution in the global food industry.