Managing domestic trade for food security with environmental and economic equity in China

Grain production is critical for national food security, yet it significantly contributes to greenhouse gas emissions, nitrogen pollution, and substantial water resource consumption. Achieving both food security and environmental sustainability locally necessitates coordinated national regulations and compensation frameworks. Using data spanning from 1980 to 2020 in China, our analysis demonstrates that inter-provincial grain trade in wheat, maize, and rice increased over fivefold, rising from 22 to 128 million tonnes. Grain production in China has progressively shifted from southern to northern regions, resulting in pronounced spatial spillover effects. This transition led to a 196% increase in cropland displacement, a 606% surge in virtual blue water consumption, and a 213% rise in nitrogen pollution embedded in interprovincial grain trade. While this reallocation intensified water scarcity and nitrogen loading in northern provinces, it unexpectedly contributed to a 41% reduction in net greenhouse gas emissions. This outcome highlights a critical climate co-benefit, driven by the emergence of northern croplands as a regional carbon sink under the new agricultural structure. To mitigate these environmental impacts and ensure national food security, our analysis suggests an annual subsidy of approximately US$81 billion from southern to northern provinces by 2060. This is vital to fostering sustainable agricultural development while also supporting equity of economic activities in China.