The World Grain Crisis And China's Countermeasure

Since the outbreak of US supreme lending crisis, the globe is facing another escalating food crisis. According to statistics, the average rich price has increased nearly 3 times in less than half year in 2008 around the world. In India, every ton of rice costs up to 1000 US dollars; the global benchmarking, Thailand medium quality rice's index quoted price is 950 to 1000 US dollars per ton. While before March this year, this price was only around 330 US dollars. While wheat price has increased by 2 times last year, and in Feb. 2008, the price increased by 25% just in one day. The fast increase of food price has been stunning, and the foot shortage around the globe has gone from bad to worse. When you look at the relationship between demand and supply, the soaring food price seems to attribute to the imbalance between demand and supply. The global food production is far below the demand from the consumers from the world, and that causes the food price increasing sharply. Under the influence of such harsh market rules, the people form poor regions are the more vulnerable to be excluded by the soaring food price, and they can not afford to buy food for survival. According to the estimation of UN Food and Agriculture Organization, if this wave of food shortage can not be solved, there will be at least 100 Million poor people trapped in survival crisis. This wave of food crisis outbreaks at the same time with the oil crisis, and this certainly makes lives of the people from poor countries even more miserable.During this crisis, the Chinese food price has not experienced big changes, which thanks to our good food safeguard system. Even though, some experts believe that China may have gone through this wave of food crisis, when facing the next wave of food shortage crisis, China has absolutely no reasons to remain optimistic. We must enhance our preparation for such even worse crisis, and positively adapt to any changes and speed up our improvement towards our systems, therefore enhance and develop our good agricultural situation in the rural regions. All the regions, all related government organizations should continuously adhere to our policies of maintaining domestic self supply, and therefore enhance our organization of agricultural production and firmly hold on the initiative of solving any food shortage problems. Every food crisis was caused by the natural disasters which were caused by the unusual climate changes in history. However the causes of this crisis are multiple, including irrigation water shortage, food crops used for fuel production and the increase of demand due to rising population. All these factors attribute to this complicated crisis. The food price on the market is at the beginning of increasing period just like the oil price.The consequence of food crisis leads to the instability of the society and politics in the countries facing food shortage. Those developing countries that rely on food import but can not afford the soaring food price are facing the biggest impact of the crisis. It may lead to food nationalism, which could cause worldwide trade protectionism.Under the influence of the global food crisis, Chinese food production currently can maintain the basic supply and demand. China has contributed tremendously to the global food safety, not only feeding 1.3 billion people, but also exporting to other countries. Since China's reform and opening up to the world, our food production also adhere to the guidelines and policies of positively utilizing international and domestic markets, two resources, and self supply, more focus on domestic market to ensure food safety. According the related information from National Development and Reform Committee, due to 4 consecutive years of good harvest, Chinese food supply and demand remain balanced, and our food storage is abundant, and can ensure the basic stability of domestic market supply and food price. Even though domestic food production can maintain the balance of supply and demand, there are still some issues that we need to pay special attentions to. Our arable land has been decreasing due to the increase of the population, the deteriorating environmental problems, and other problems. For a long period of time, China had been executing the policy of having agriculture to support the industrial development, which causes the limited investment into agriculture. The agricultural infrastructure is limited and farm irrigation systems are worn out and lack of proper maintenance, the effective irrigation coverage is less than 45%. With the deteriorating environmental problems and the serious shortage of water resources, China's technology advance to grain yield is less than 49%, which is far lower than 70% of developed countries'. All these affect our food production and safety.With the influence of food production price factor, agricultural production material price index, labor price, land cost, climate changes, policies changes and other factors, China's planting land acreage appears to first decrease and then increase. In the long run, it is unrealistic for China to increase food production by expanding arable land acreage, the stable food planting acreage is the foundation to ensure and enhance comprehensive food production capabilities.In fact, China has neither suffered from obvious food shortage, nor from the impact of global foot shortage. This has clearly been highlighted by the high inflation rate in China. The increase of food crops prices directly cause the rise of food prices, and therefore increase the prices of pork and other meat products. Thus, one the one hand, we need to fully motivate farms to produce more crops by increasing allowance, raising food production prices, etc, and effectively protect and increase the production incentives of farmers. On the other hand, focus on some food crops'self-support ratio. When facing a crisis, the food safety should be held as the priority. Arable land and water resources are the important foundation for food production, therefore protecting arable land and water resources are the vital factors to the development of food production. We must strictly protect our arable land and increase our comprehensive food production capabilities. In China, it has been clearly stated in regulations that'cherishing and properly utilizing every inch of land and effective protecting arable land is the basic state policy, which requires establishing arable land protection regulations in a fixed period of time. In addition, strict water resources protection policies must be implemented. Water resources are another fundamental element to our comprehensive food production capabilities. Strong and effective policies must be undertaken to ensure the safety of agricultural water safety and conserve agricultural water usage, and prevent the pollution to agricultural water.Enhance the construction of agricultural infrastructure, improve agricultural production conditions, and enhance the anti-natural disaster capabilities of our agriculture production. Open up new funding channels in order to effectively support food production and economic growth and the increase of farmers'income. For a long period of time, farmers have not actually gained obvious benefits form the huge national allowance, therefore preferential policies must be made to encourage food production, and therefore to increase farmers'incentive to increase crop production. Full push of food allowance directly to farmers should be implemented, and let farmers enjoy 100% of the benefits of the allowance, and make them actually benefit from increasing crop production. Enhance technological training and promotion. Promote the major superior agricultural product projects and the training scale and investment for young farmers, and promote major key technologies in the high production regions for corn, wheat, beans and rice, etc. Introduce the latest agricultural technological achievements to actual production activities. In the meantime, focus on the process of crops to food products to increase bigger production efficiency. Establish more effective food storage regulations, maintain appropriate food storage, and ensure the stabilities of our society, and therefore promote the well development of our economy. For the free market economy, it is very important to establish a highly effective, flexible food market macro-control system, in order to ensure the food market safety and protect manufacturers, consumers and distributors'interests, and at the same time protect and enhance our comprehensive food production capabilities.