Welcome to the One CA podcast. This is your host, Jack Gaines.
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show notes. China has a longstanding
tradition in where their ruling class is always held
accountable. And it's one of the few reasons
that justifies the population to revolt and impose and really
buy. This is the second in a two-part
series on agriculture and national security.
Captain Gustavo Ferrera talks about China's food stocks in
peacetime and forecast supplies in conflict.
Ferrera is an agricultural economist for the 353 civil
Affairs command, FXSP. And also for.
The US Department of Agriculture.
He and his 38G agriculture team research consult globally on
food, stocks and stability. Additionally, Ferrara discusses
the 38G program and now it brings in specialists to help
civil affairs consult agency leaders and partner nations.
So stay tuned. So the the ruling class is
always very sensitive. There is a cultural tradition
that the ruling class must always ensure, at the very
minimum food security. Right.
And even today, that reflects a lot in the policy and narrative
of the current ruling class. In China, it's.
If they have history with accepting that the population
will rise up, it's not like North Korea where you can starve
your population and build a nuclear program and accept that
they will behave properly. Correct.
Yeah. They're extremely sensitive to
that. Plus it's still pretty fresh and
in some segments of population, population, memory, the Great
Famine. Declined to kill 10s of millions
of people in the 50s. Well, they still have living
memory. Right, right.
So they. Have grandparents and great
grandparents are like you don't know what it was like to starve
on water. Yeah, and they have those eating
habits. They still reflect those
struggle times. So anyway, that is just a recent
event that guarantees so those events do not happen again.
It was all based on bad policies, Sure, plain and
simple. It was all ill advised
government acts. And with dire consequence today
the population has adopted more western lifestyles to include
more protein rich, dairy rich diets.
They consume luxury goods such as imported European wines.
So more than ever now the population has achieved A
threshold of the security that it will be hard to imagine then
going back to. To a rice.
Yeah. And we type of diet.
So it's going forward I think that this.
Sensitivity. It's only getting more
preeminent than than before because like they did it
comfortable, they enjoy a much better, more balanced eye.
So do you think that as they consider operations or decided
to blockade Taiwan or if they decided to go into Myanmar, this
is a real consideration for them is how much they can ensure they
feed their military as they are Expeditionary?
Not only the military, it's just in general the the overall
population, right? Well, and that's what happens,
right? If you go Expeditionary, you've
got to feed that army and that Air Force military and that
comes out of your surplus that would go into the population.
Correct. China has some significant
national stock reserves of key agricultural commodities.
Just go on. So it be in wheat and rice,
right? And how much is on those?
How many? Millions of metric tons are in
those stock. Stock like it's a state secret
nobody knows. And all US and analyze for
commercial purpose. They always try to assess and
try to estimate what were the volumes of those stocks because
that determines trade, export, imports.
Sure, they can always release those stocks when needed, right?
But there's even speculation that some of those stocks are.
Tunnels underground, under the mountains, and again, a lot of
secrecy, right? But to maintain those stocks,
especially in commodities such as corn and soybeans, they're
not self-sufficient. China must import very, very
large volumes of those. Products, right?
And those imports come strictly for a handful of countries, to
include the United States, Brazil, Argentina and Ukraine,
and Russia now, right? You were talking about soybean
as being a critical crop that they rely on for food stock for
their animals. Correct.
So as as food production became more industrialized and diet
habits evolve in China, now China is the world's largest
pork consumer. So China adopted this
industrialized massive pork production.
They're vertical farms. Some of them are 10 stories
high. They contain.
Thousands and 10s of thousands of animals like you said, that
requires a lot of feed, and soybeans is always considered to
be one of the best alternatives. Does it create problems with the
animals if they're constantly eating the same diet?
Not necessarily their balanced diets, I mean their rations,
they're being used, even United States are used constantly.
But the problem is that it puts a lot of pressure on domestic
agriculture is incapable support that growth.
And therefore they do have to import food.
It is an interesting image in my head of A10 story pig farm.
A pig high rise basically right? Or a condo for pigs so they
don't get out of their trough. They don't.
And in fact, they dealt with a major African swine fever that
decimated their big farms, right?
And it forced them to call 10s of thousands of animals.
It was it was a massive outbreak.
Again, it causes food security concerns and where all of a
sudden the price of pork meat, which is just skyrocketing, they
handle they they getting better in terms of phytosanitary
measures. They're getting much more
sophisticated and realize the risks right, but but it keeps
bringing back the same thing with their dairy They're
increasing dairy production, but again, it goes back to the same
problem. China is constrained in terms of
farmland and water resources. So even though there is
political backing for more food self-reliance, they still do not
have the natural endowments you. Mean like healthy soil, water.
Correct, correct. They just don't.
It's between contamination, organization, lack of even farm
labor. I mean it's been this for
decades. It's been massive migration
towards the coastal parts of the country, farming, families
moving to the city looking for better economic opportunity.
Right. In your paper, you had some
projections about if China went on a wartime footing and they
were disconnected from the global economy.
I think it was what, two years before they go into a crisis
conserving type of mode, right? Right, that's that's the common
wisdom that it states that those reserves will probably sustain
China for two years. However obviously things have.
Shifted and Russia probably could now become a backdoor type
of supplier and where he could probably redirect some of those
needed grains through mainland rather because all the trade,
all this massive trade that happens between China and and in
the US and Argentina and Brazil happens mostly by sea, right.
Thousands of Panamax vehicles loaded with bulk commodities
that unload into Chinese ports every day.
Well, if that trade gets disrupted for whatever reason,
you got those national strategic reserves by sometimes in
Chinese, but it's unknown how long two years is.
It's a mark that people have in the industry.
Right. Then you have potentially Russia
try to apply some of those things.
Staples that you can see. And there's no alternative.
Russia care supply some wheat. But China's stuck, right?
It's by trade, by necessity is stuck with South America and
United States, right? Let's say.
You know, there's a grantation between China and the US only.
But China maintains good trade relationships with Brazil and
Argentina, right? Because of the the geographic
location of those farms, there's a the cycle, right, a farming
cycle in another another atmosphere and the southern
atmosphere. So what happened US and
Brazilian, they split the year in two.
Basically there's a exporting soybean season and corn season
for the US which starts in September and goes all the way
to February roughly and all the sudden.
Brazil and Argentina take over because that's their time for
harvest. Until the late summer, they take
over the export market. So China would not have the
ability to just flip because there's this seasonality
component that keeps that dependency going across
different atmospheres. The Global Commerce Center
connectivity creates the dependency.
And it's just a lack of, I mean, there's no other countries that
can produce that much, right? Not only quantity but the
quality because there's there's always the quality like
Argentina typically produces a lower quality soybean with less
protein but but they they're good at producing meal So
there's all this technical considerations that makes very
difficult for China to try to outsource alternative there's
there's no such alternative I. Don't mean to change the topic,
but you garnered this from your work at both.
US AG and from civil affairs. If a soldier or a diplomat or an
aid worker or field operative working with a partner nation,
how do they plug in AG to build estimates of stability or
development and growth? Because people do go out to
these partner nations and do estimates work with the partner
nation on their on their systems.
So the USDA, and this is going back to a major event that
happened during the the height of the Cold War.
The Soviet Union that time had a major series of crop failures.
Before this, there was no monitoring, no tracking, proper
tracking, how much grains and and agricultural products were
being produced, trade and consume around the world.
There was not a. A proper assessment and
monitoring of those flows, right.
So there is no understanding of like which country were missing
or which country were had a deficit, which one of the
surplus and where those surplus were moving around.
So what happens, because there was nobody assessing this and
with with severe implications in a possible famine.
So what happens? They end up through the back
door channels buying all the weeds they could get their hands
on from the US. And before they realized in the
US actually was running low on their own stocks of wheat and
how did they end up selling it to our Cold War main opponent.
So there was a source of consternation and less sense of
humiliation that we end up selling such a key resource to
our enemy. So, So from that point on, the
USA create this, this group called the WASI and it's a
report is World agriculture and Supply Demand Estimation and
it's a report that's published every month.
Which I'm part of it in my USDA capacity as an agriculture
economist. It's a large body of profession
all over the world. And the USUSDA employees, some
they are embedded in embassies after shares, and some are
experts here in Konas. Every month they monitor
production, supply, demand, stock levels for every country
for every major commodity. Which is a good predictor of
stability. It is, it is.
And you can identify what countries are struggling.
Would you expect trade to move from what place to what place?
So now we are much better position to identify what the
true situation is in the global bank market.
Which also helps with forecasting future risk.
Correct. Exactly.
Like with Ukraine, you know, the Ukraine war, there's.
Obviously there had to be major adjustments to those estimation
because you know, all of a sudden there was a major
disruption in the key AG region of the world.
So all those estimates had to be readjusted and figure out how
the other countries will react to it.
You know how things get redirected from one market to
the next. But again, in the case of China,
right, there's a lot of energy and effort that goes into figure
out how much China will import. From the United States and other
countries because it is the leading customer of those key
commodities. So it's truly is all eyes on
China, right, which again from a commerce perspective and even
for national security perspective, it's good that we
tracking that, It's good that we have a finger on the pulse to
understand what kind of policies did they implemented.
Where they're strong, where they're weak, where where
there's needs. If there's a strong demand from
China, I mean it comes down to basic economics, right, That
will mean large volumes exported to China, high commodity prices
for US farmers, which increase the overall financial health of
our farming community. And and we have seen this in the
last 2-3 years, you know, with between COVID and and the war in
Ukraine. Global food prices have reached
historical highs recognized and while this has been extremely
problematic for net importing countries.
I saw a lot of news of concern in the Middle East and North
Africa as like Egypt, because they use so much of that.
We. Correct.
So there was really an immediate concern about it, but for the
net exporting countries like the Brazil, the Argentina, the US
and probably why? That was was good news.
I mean in fact we like you know the profit margins, the farmers
were you know really healthy in 2022.
So, right. So it depends on what side of
the the store you're looking at for places like China and they
end up paying a higher price for for those imports.
Your USDA and you're you're an agricultural economist, so
you're part of a team of 38G agriculturalists.
Who? Often go out and consult
globally on these very issues. Our job is to provide insider
expertise or any agricultural issues that may impact, you
know, either national security or even in terms of nation
rebuilding or reconstruction. Get a stable food production
right? Correct.
Restore the food supply chains back to some sense of normality.
Try to improve the markets. Reinstate the previous markets
that were in place. So that's typically our role is
that is just provide the expertise to the commanding
officers they look it says once kinetic operations start to
seize and we start shifting towards reconstruction and
stability and governance, how can we restore all those key
governance functions. So we are the subject matter
expert when it comes to agriculture and food and food
security. Right.
So if when Ukraine finally completes this conflict?
And they need reconstruction. They need to pull in folks like
you, both in the suit aspect as well as in the uniform, to make
forecast, to do assessments on ground of what's already
destroyed, what can be repaired, and then funnel those
reconstruction dollars towards rebuilding Ukraine to be a
vibrant food producing country again.
Great. And that's the way the timeline
that follows you know, obviously.
That mission is is to be shared with multiple government
agencies, State Department, USID which you know the well trained
well equipped for that mission. But the 38 gulfs and the the
Civil Affairs and the US Army Reserve, they typically tend to
be the leading party in this when the instability situation
is not good enough for those civilian agency.
Should be doing their work. Plus, you're supplemental.
I mean, they have great people, but it's nice to have a few
extras to come in and help with the paperwork on all the site
visits and their. Help in this you can assist them
with the expertise and some of the connections we already have
established with the local leaders and national government
agencies so we can start those conversation and once all these
apparatus move in with, we can help to facilitate that
transition. And help make those connections
so those agencies are set up for success, so.
Right. Matter of fact, you had a paper
that went to the Moldova embassy and was read widely about
Moldova agriculture. You've gotten papers in South
America, Africa, Asia, same thing where you've done research
projects and putting together white papers to kind of just
expose some of the conditions and either add.
Way to needs. Or reinforce good supply lines
and things like that, right? Yeah.
And we try to foresee potential either opportunities or think
that might be problematic. We try to identify some factors
or events secured lead to intersect between full security
agriculture and national security.
Right. And in the case of this Moldova
research that we did, we tried to draw lessons for what we
observed in Ukraine. You know, right.
A key major. Agriculture exporter who saw his
production in trade severely disrupted by the conflict.
Right There's still a lot of agriculture going on, no doubt
still exporting thanks to the Black Sea grain initiative which
is up for renewal this month. It's still under negotiations,
so to be seen if this is to happen, the similar situation is
to happen to another nearby countries such as Moldova.
Are we going to see some similar patterns events or is going to
be a very different picture. For instance the agriculture in
Moldova, it's it's quite different, right?
It's it's much more focused on fruits, more high value
products. Yeah compared to the just bulk
grains like Ukraine like. Yeah, I don't want to over focus
on Moldova, right. These are the kind of products
that you have sent out and have reached embassies, right?
And you've gone to embassies and consulted on these things,
right? Once we finish our research and
we do disseminate this to to what we think will be the key
stakeholders and and primary consumers of this information,
which embassies will be obviously because they're the
equipment they have AG attaches, they got military attaches,
right and and obviously the State Department's mission
often, you know, overlaps with some of our work.
Yeah, we, we shared our work with the European command user
wrap. We always try to identify.
Who will benefit the most from learning this information?
And probably civil affairs teams that are out in the.
Field as well. Say you by the way, you know.
Consider this when you're also dealing with.
These thanks for bringing that up.
So we had developed what we call it's a basic country
agricultural assessment tool which trains a civil affairs
team. They may go on a mission and it
can be both in continental Europe or can be a rural part of
Africa, doesn't matter. But that assessment goes over a
battery of questions that we think that any CA officer should
be very aware of nuances and those factors that could really
shape the environment in that region.
And I give you an example, right.
So if you think about farming in any Western country, you know
you have a well developed banking system upfront provides
the money to the farmers to buy the seeds and fertilizers.
And then once they harvest, they repay back.
In parts of rural developing nation, you might have a village
where one family is the one that provides who supplies that
function, right, is the one that all the farmers go to get their
money. So as a civil affair officers in
that area, you should know that that's a key stakeholder that
holds a lot of power, a lot of gravitas in that region because
all farmers had to rely on his funding every year.
But again, we lay out all these key questions that we think
we're gonna shed light on issues that probably otherwise will be
overlooked. So we want you to make sure that
you know the key players and want to make sure you don't make
mistakes or actions that might be counterproductive from the
agriculture point of view. Do you have links to that?
Paper online. We produce that internally.
What we do is once we identified CA teams are about to deploy, we
link up with their team leader and we go over product and we
discuss and give you the examples.
All right. Once that introduction is done,
we act as a reach back capability.
So we had some of those civil fair team reaching back to us.
Look, I have some question about this now I know you guys are the
Ed guys. But we stumble across this
particular issue. What's your thoughts on this?
OK, so when people reach out to this show?
I'm going to be emailing you. Well, because that's the key
thing is you know that the civil affairs study you go provides
that rich back capability just like you know we have obviously
we just add guys, but there's a functional specialist with a
great deal of expertise and the other thing that makes our
service very specific, very unique in the Army is our.
Civilian professional network. Oftentimes I don't have the
direct answers right to some of those specific questions, but I
do know within the USDA or an academic who are the experts and
I've done that multiple times where I would just just grab a
phone or send an e-mail. In case in point, for for
Ukraine, UCOM have really specific questions about
Ukraine. I would develop this partnership
with a colleagues at USDA Foreign Agricultural Service.
Who are happened to be the experts on Ukraine.
And you were able to cut through the bureaucracy and get right to
the right person so they can get the answer.
Well, I got two options. I can try to get these answers.
It might take me two days. Or I can just ask this person
and within within 4 hours this information was back to
Stuttgart. Did you just, like, pull out a
hat and reach into it and say here's your answer?
Yeah, but it was a beautiful process in the sense that we
connected the need with a source of knowledge really efficiently.
He made it to the the right person at the right time.
And those USDA officials, they routinely send me updates if
they see there's something they may merit airing.
With the econ user wrap, they do it.
And I always, you know, I filter, I go through it and make
that decision. And if it is, I'll send it
because often times they have access to sources on the ground
that even the US military doesn't have.
They actually understand the problem, I mean.
But yeah, like it's it's being a very fruitful relationship.
That's fantastic and that that really calls to them.
Have a good network, yeah, and a good reach back.
Because you never know. What crazy question.
You're going to get on the ground and suddenly have to find
the right person. And yeah, it's fantastic you're
able to reach out to the exact right person.
Yeah, absolutely. And academics too.
I mean, we have some partnership with some strong ag program and
they understand the military there might be.
Some initial concerns that what was the nature of this question
but we have developed key partnerships and where they
understand the mission we had to kind of do a little bit
education right had to introduce ourselves to.
Get through the mansplaining right.
Well, it's just like saying we not your typical military you
know like say you know I was an academic myself you know in you
know you know I'm an Ag economist by trending.
So it's that kind of breaks a lot of that initial
reluctancies. OK, so now you now you speaking
my language. And I think that that's a
strength because and the same thing goes for the some of my
colleagues, they have years of industry experience.
Right. So they can reach right into the
commercial sector. And pull the doors of the makers
that they understand, you know, the minutiae of what it takes to
rebuild a dam, right. And you might have this, you
know, work experience in an engineering structure,
engineering company, right. So you understand those those
key issues. That your typical civil affairs
officer may you know, may not be familiar.
With right and I've found often with commercial contacts is that
when you can't get access to a country or an issue and the
academic and the and the former military or governmental process
doesn't work, that commercial sector person usually has access
and make at least get you an introduction get you in to talk
to someone. So it's it's yeah it's critical
to have that triad of people. Or resource networks in order to
get things done. Right, I agree.
But do you have any other last thought?
Anything you want to pitch vacation at Disneyland?
I don't know about that, it's, but honestly, I think one thing
that this recent conflict Ukraine has highlighted it's the
issue of global food security front and center.
Again, DoD is not paying close attention to this issue because
I mean if you start thinking about pandemics.
Global warming, military kinetic conflict, all those are not
throwing shock waves into the global supply chain.
But I'm also would like to caution because this happened
before in the 2010, 2012 crisis for different reasons.
But we experienced a similar spiking in global food prices,
which in turn trigger the air spraying and another sources of
political stability just because of the high food price back
then. The military was really
interest, but once the supply demand took care of that in the
years later. That obvious way, there's no
problems. Right, right.
There's other priorities. So hoping that what's seen now
will become part of the recurrent priority, not just a
temporary crisis. Right.
But it can also be a really good part of the response to the
Global Fragility Act, the Congress.
Right, correct. Right.
That passed. You're right.
We've seen the right policy that we the narratives there, There's
a. An acknowledgement this, this
issue is a really problem, right.
And yeah and the supply chains and all this vulnerabilities
that were exposed during the COVID and that's that's all
happening. It's just for the national
security perspective. I think it's imperative that the
DoD continues to put resources and eyes on this and incorporate
this food security consideration into their planning operations,
right. It is going to be a key driver
to a lot of the. Events, they're going to shape
out the environment that ails, right.
So it's it's it's good for the for us as agriculture office to
give the heads up, yes, to the planners.
Look, you might not be looking at this, but this is going to be
a major driver of political instability in this region and
you need to take that into account.
They add weather in there now they might, you know, food
security and stability would be a A+ as well.
I agree. Alright, well I think that's it,
unless you have anything else. Now that that.
That will do it. Okay well.
Appreciate your time, man. Thanks again for listening to
the One CA Podcast. Our show is a production of the
Civil Affairs Association. If you are interested in coming
on the show or guest hosting an episode, e-mail us at
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And to all our folks in diplomacy, development, defense
and operations working on ground to build those relationships
with partner nations and their people, thank you.
For all you do. This is your host, Jack Gaines.
Until next time, have a great week.