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Friday, January 03, 2014 3:56 PM


8 Million Acres of China's Farmland is Too Polluted to Farm; All Farm Products From China Suspect; Iceberg Principle


At the end of 2013, China reported over 3 mln hectares of land too polluted to farm.

About 3.33 million hectares (8 million acres) of China's farmland is too polluted to grow crops, a government official said on Monday, highlighting the risk facing agriculture after three decades of rapid industrial growth.

China has been under pressure to improve its urban environment following a spate of pollution scares.

But cleaning up rural regions could be an even bigger challenge as the government tries to reverse damage done by years of urban and industrial encroachment and ensure food supplies for a growing population.

Wang Shiyuan, the vice-minister of land and resources, told a news briefing that China was determined to rectify the problem and had committed "tens of billions of yuan" a year to pilot projects aimed at rehabilitating contaminated land and underground water supplies.

The area of China's contaminated land is about the same size as Belgium. Wang said no more planting would be allowed on it as the government was determined to prevent toxic metals entering the food chain.

"In the past there have been news reports about cadmium-contaminated rice - these kinds of problems have already been strictly prohibited," he said.

This year, inspectors found dangerous levels of cadmium in rice sold in the southern city of Guangzhou. The rice was grown in Henan, a major heavy metal-producing region.

State researchers have said that as much as 70 percent of China's soil could have problems.

All Farm Products From China Suspect

The last sentence above says all you need to know.  It's unsafe to trust any farm products from China.

Woefully Inadequate Response

The vice-minister of land and resources, said China committed "tens of billions of yuan" a year to pilot projects aimed at rehabilitating contaminated land and underground water supplies.

How uncomforting! The cleanup bill for air pollution alone is $290 billion. Given that State TV amazingly promotes the "Benefits of Smog" one has to wonder how many acres of China's farmland are really polluted, and what a proper cleanup job would actually cost.

Iceberg Principle

I speculate the cleanup cost will be in the $trillions, if done properly (but likely it won't).

One thing we learned from the financial crisis in the US, and continued bank problems in Europe is the biggest portion of the mess is continually hidden.

Call it the "Iceberg Principle" where politicians only reveal a portion of the problem with each admission.

Recall the initial estimates of the Greek bailout was something like €40 billion. In May of 2010 the Troika committed a €110 billion bailout loan. A second bailout loan a year later added another €100 billion. Talk is now underway regarding a third bailout.

Questions of the Day

  1. How many acres are really polluted?
  2. How safe is the food?
  3. What about pet food?
  4. What about toxic toys, paint, etc.?
  5. What's the real cost of cleanup?
  6. Taking into account the negative effects of pollution, how fast did China's GDP really grow?

One thing is for certain: China's growth at any cost policy came at an enormous price.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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