Agriculture in the Soviet Union and China: Implications for Trade: Discussion

Abstract

reforms makes for a far more dramatic subject than a poorly performing economy with systemic inability to change. Therefore, even if I possessed more than a vague understanding of Soviet agriculture, the temptation to devote most of my comments to China would be irresistible. And the most relevant question to address concerning the Soviet Union is why can not they do the same? Sicular' s paper captures the essentials of the grain-meat-trade nexus in China. In particular, she notes the shift in emphasis from direct grain consumption to indirect consumption through meat and egg production which is underway in China, driven both by rapid increases in grain supply and differential income elasticities of demand. This is accompanied by changes in meat production technology from traditional, apparently grain-saving techniques, to more concentrate-intensive techniques; however, the effect of this change should be to increase feeding productivity, i.e., to improve feed conversion ratios. Even so, the shift from a diet based on vegetable protein to one more dependent on animal protein likely will lead to increases in total demand for grain which in the long run outrun supply. Hence Sicular's projection of a continued net import demand for grain is well justified. However, through an understanding of some developments which she has ignored, the meat-grain-trade nexus can be further clarified, and our ability to predict future trends sharpened. To be specific, the amount of grain marketed is at least as important a variable as the amount produced, and the analysis of trends in official procurement prices should be deepened to consider changes in the relationship between free market prices and official procurement prices as well as the proportions of marketings sold at each price. Finally, growth in stocks has been more important than growth in feed demand in absorbing increased output in the last few years. Let me reinterpret recent trends with emphasis on these aspects of the analysis, for some of which little or no official documentation exists.