Just recently ChemChina applied for a $35 billion loan to finance its purchase of agrochemical giant Syngenta in the country’s largest acquisition of a foreign company ever. Mega buyouts are a quick solution for growing pains in industry, but this one in particular speaks to a palpable fear of famine and hunger down the road. Rising incomes and a growing population are putting more pressure than ever on Chinese farmland to produce, yet 40% of that land is degrading. The threat of food shortages is a real possibility, and the Chinese are clearly taking this situation seriously as they plan for the next two decades.
The Chinese appetite for American-grown wheat, soybeans, and other grains is seemingly insatiable. A growing middle class, increasing preference for wheat over rice products, and improvements in living standards are outpacing the nation’s ability to feed itself. In fact, a 2015 study commissioned by the United States Department of Agriculture projected that Chinese demand for agricultural products will continue to rise for the next twenty years. Additionally, the Chinese livestock industry, which survives largely on imported grain, continues to expand, while available arable farmland is disappearing faster than ever. It appears that despite their best efforts, the Chinese simply cannot meet their needs alone.
Queue U.S. opportunity. In recent years, the United States has been trying to meet China’s growing demand for agricultural products. U.S. agricultural exports to China rose from more than $5 billion in 2005 to nearly $26 billion in 2013, while the Chinese have dramatically increased their own imports following accession to the World Trade Organization in 2005. It’s safe to say, that the United States has been their premier supplier since then, providing 24% of China’s agricultural imports in 2012, the highest of any country.
In particular, Washington state is in a unique position to capitalize on this once in a generation opportunity. The ports of Seattle and Tacoma, Washington’s largest and some of the biggest in the country, already export more grain and agricultural products than anything other bulk commodity by a significant margin. Highways and railroads run from the Dakotas, Minnesota, Illinois and other grain producing states all over the country straight to Washington. Moreover, Washington itself is a tremendous grain producer, and the state even has a dedicated ‘grain train’ network exclusively for sending grain to Northwest ports. This system has moved more than 1.2 million carloads since 1994.
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Between Chinese demand and Washington’s ample access to America’s breadbasket, the state is teed up for success. And yet, an onerous and unpredictable review process continues to impede the state from standing out against the competition. . The regulatory and permitting processes in Washington pale in comparison to the expeditious, industry-minded systems being mobilized in California, Canada and other places in North America. Two terminal projects in Washington have even been waiting for approval for four years and counting. A record as poor as this does not make a strong case to domestic grain producers who are looking straight past the West Coast to China, with an apathetic attitude towards the middle man.
The Chinese will find a way to feed their people and satisfy industrial demand. Whether the grain is from Canadian, Californian or Washington ports, it is all the same to them. There is no California or Washington, only fast and slow, here and now. Let’s beat the competition to the punch, and make regulatory certainty a reality in Washington state.""
James Alford is the President of the Franklin County Farm Bureau and in addition to the numerous other committees he serves on, he also farms potatoes and seed crops north of Pasco and is a father to three young children.