Trade, Fluctuation, Accessibility And Food Security

Food security is a strategic issue seriously considered by all nations. It matters not only economic growth and the stability of the government and the society, but also the life of the people. The food security issue is consisted of four main aspects: 1) if the total food supply meets the basic demand; 2) if the food supply is evenly distributed in times and locations; 3) if all people have easy access to basic food supply; and 4) if the food obtained is consistent with safety, nutritional and health standards. Under current situations facing China, this study focuses on the fluctuations in grain production/supply and the accessibility of targeted people to food. As grain production is strongly influenced by weather, yields fluctuate widely among years and locations, the long-run equilibrium in grain supply and demand, even surplus in supply, does not necessarily imply supply meeting demand in all times and locations. Therefore, how to smoothen the fluctuations in grain production to provide even supply is a major aspect of food security issue. On the other hand, poverty alleviation is not only one of the major goals in China抯 economic and social development, but also one of the solemn commitment made by the Chinese government to the world. As accessibility to basic food supply is the first step towards poverty alleviation, how to increase food consumption in the poor and grain-deficit rural areas will not only improve food security in those areas, hut also bring people in those areas prosperity. As such, its significance can not be over-estimated. The overall objective of this study is to explore possible new approaches in strengthening food security in China, especially how to smooth grain supply facing production fluctuations and how to increase grain consumption in the poor and grain-deficit areas, through market mechanism, in order to achieve food security goals. The significance of this study is to deal with the food security issues from a new angle according to changing grain supply-demand situation and the overall objective of further pushing market-oriented reform in China. The tentative conclusions of this study are: 1. There does not exist significant and positive correlation between China抯 total grain production, outputs of major grain crops, and those in the world, major exporters, and major importers. Some of the relationships are even negative. Therefore, it is quite likely that utilization of the world market may be beneficial in smoothening domestic grain supply and achieving food security goals. China will not face shortage in international payment due to grain imports, or the danger of grain embargo. 135 2. Keep large grain reserves require huge investment in infrastructures and operation costs, in addition to significant losses in quantity and quality. Establishment of unified national grain market and partial utilization of the world market will greatly reduce the costs while maintaining the same level of food security. As a matter of fact, following the reduction in policy-led costs, the policy itself will be carried out easier, hence the policy goals of food security is more likely to be achieved. 3. Under current situation in China, the food consumption level of poor farmers in the grain-deficit areas is strongly linked to their income level rather than their own grain production. As the share of grain production in...