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Food Production Systems, Trade, and Transnational Corporations: - page 12 / 29





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facilities. Local supply chains are typically augmented by imported inputs that go into a wide array of food products. The cases of soybeans in China, overall food trade in Trinidad and Tobago, and corn in Mexico illustrate this phenomenon.

Trade liberalization and China’s accession to the WTO have had a profound impact on China’s agricultural system and domestic food supply. Soybeans are emblematic of the modern redefinition of Chinese agriculture. Soybeans, along with grains and sugar, are land- and labor- intensive crops grown in the western and northern regions of the country. Exports of these commodities have fallen while products of higher value, such as horticultural and animal products in the eastern and southern regions of China, have increased. While soybean exports have decreased, China has imported large quantities of soybeans rather than use its domestic supply. Before 2000, the soybean tariff rate was as high as 114 percent, but it was lowered to 3 percent and then 1 percent. In 2007, soybean imports were estimated at 31 million tons, and up to 50 million tons if you include oil made from soybeans (Xinhua News 2008).

Imported soybeans have altered the food value chain in China. The sharp increase of imports spurred by liberalization is a response to rising demand for soy-based oils and animal feed based on soy (Tuan et al. 2005). Imports are highly sought because imported soybeans are cheaper and contain higher oil content, partly due to the bioscience techniques employed by foreign growers. Soybean oil is replacing traditional rapeseed oil in China. The crushing of soybeans has become a profitable segment of the value chain. Crushing creates numerous fat products that are integral to many styles of cooking. Partially and fully hydrogenated soybean oil are used in pan frying, deep frying, and baking. Soybeans are also crushed into soymeal, which is fed to animals in China’s booming livestock industry. Cooking techniques have changed with the use of soy oils, and soymeal has made livestock cheaper and more abundant.

There are soybean processors in Heilongjiang, Shandong, Jiangsu, Guangdong, and Sichuan provinces. Xinhua News (2008) estimates that 80 percent of soybean processing facilities in China are subsidiaries or joint ventures of foreign firms. Archer Daniels Midland (ADM) is the largest soybean processor in China. ADM Hong Kong/Shanghai is a wholly foreign-owned subsidiary that engages in import/export trade and wholesale distribution, while ADM Tianin provides vegetable oil concentrate and ADM Dalian creates soymeal.

Soybeans as an input commodity have led to FDI in manufacturing and the adoption of foreign food-processing practices, and they have impacted several food supply chains, especially


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