China’s drive to modernize its agriculture and food industries presents immense opportunities for investments and cooperation, according to experts at the Pinduoduo Food Systems Forum.
Less than 3% of venture capital deals in China from 2010 to 2018 were in the agri-food industry, said Professor Jia Xiangping of the Chinese Academy of Agricultural Sciences. More deals are taking place in agriculture and food technology and services, compared with earlier investments into mostly marketing applications, he noted.
The use of blended finance, an approach that attracts commercial capital toward projects that contribute to sustainable development while providing financial returns to investors, is a global trend and can be promoted in China, he said. The untapped social finance opportunities are worth $93 billion to $208 billion in the country, according to his estimate.
“We’re fortunate to be living in an era with many inspiring innovations that are changing our lives,” Jia said during the panel discussion titled “How China is Sowing the Seeds for a More Sustainable Food System.” “We need to go beyond planting seeds, because it’s relatively easier to have innovation but it’s very hard to have innovation survive. Scaling matters.”
In May, China issued a guideline to encourage social investment in 13 agricultural and rural sectors, as part of the country’s efforts to boost the rural economy and spur agricultural modernization. The sectors include modern planting and breeding, farm produce processing and circulation, agricultural technological innovation, smart agriculture, nurturing agricultural talents and rural infrastructure.
Speaking on the same panel, Zhu Jing, a professor at Nanjing Agricultural University, discussed China’s 14th Five-Year Plan, the central government’s economic masterplan for the period 2021 to 2025. She highlighted new areas of priority in agricultural modernization, such as building a strong seed industry and upgrading cold-chain storage and transportation facilities.
China’s agricultural modernization drive presents opportunities for both developing and developed countries. For instance, developing countries could learn from China’s experience with balancing food security objectives with the need to protect the environment. For developed countries, China offers investment opportunities in terms of technology and a big market to sell their agricultural and food products, Zhu said.
China Agricultural University Professor Fan Shenggen, also on the same panel, said the COVID-19 pandemic has made global food systems even more vulnerable, as millions more people cannot afford healthy and nutritious food. Zhu and Fan are co-authors of the 2021 China and Global Food Policy Food Report, which laid out recommendations for rethinking agri-food systems for the post-pandemic world.
Priority should be given to the development of sustainable, intensive and nutrition-oriented technologies, such as the selection and breeding of high-yielding, highly nutritious crop varieties with biofortification technologies and the adoption of clean agricultural production technologies, the report said.
“We need to work together to avoid a perfect storm from climate change, from health crisis, from broken supply change, and from shrinking economic growth,” Fan said, referring to the state of hunger in the world. “With the rapid deployment of vaccines, sooner or later, probably by the end of this year, the situation will become much better.”
“Then the question will be how can we rebuild our food systems, not simply recover? Recovery is not good enough. We need to build back better, for human health, for planetary health,” Fan said.
Pinduoduo Chairman and CEO Chen Lei echoed this sentiment in an earlier fireside chat at the Food Systems Forum.
“We need to put our heads together to think about solutions to benefit people,” he said. “If we look at every point of the agri-food system from growing to distribution and to consumption, we are seeing technology can really help to create better resilience over all kinds of difficulties and challenges.”
For that to happen, “we really need to involve all the stakeholders, and that will include local governments, agricultural experts, and all the farmers,” he said.
Since its establishment in 2015, Pinduoduo has focused on agriculture and has connected some 16 million farmers to its user base of more 820 million users. By facilitating sales to a nationwide pool of consumers, Pinduoduo has helped to improve the livelihoods of growers by diversifying their channels for selling their produce.
“What Pinduoduo has done to improve agriculture in China will give hope to many people in developing countries,” said George Yeo, Visiting Scholar at the Lee Kuan Yew School of Public Policy and an independent director of Pinduoduo. “That agriculture in their countries can also upgrade, that their fate is not to be bought over by multinationals, but by people farming more intelligently, with more technology, with better logistics.”