2010-09-04 15:02

The world grain market has been witnessing speculative fluctuations these days.

Russia's decision to extend its ban on wheat exports from end of this year to virtually the end of 2011 to tide over the severe crop loss and the reported panic hoarding of staple foods is causing global food prices to rise further.

There's more bad news: farm outputs in other countries across Europe and Asia (and in Australia) are declining.

The UN Food and Agriculture Organization has called a special meeting in Rome later this month to discuss how the global food supply problem should be addressed.

Given the global situation, the Chinese government had to act fast. That is precisely what the State Council, or China's Cabinet, has done. Earlier this week, the State Council vowed to strengthen regulations to control food and grocery prices. This is a welcome move to help consumers, especially during the festival season.

In all likelihood, the government plans to take further action, if needed, at least till the beginning of next year. Such actions could include financial commitment.

Besides, lawmakers are expected to urge the government at their national session in March to intensify its efforts further.

Earlier this year, the government took the very important decision to import more grains. From January to July, the overall trade in farm products showed a deficit bigger than the previous year's. Much of this, however, should be seen as a precautionary move to capitalize on generally low food prices rather than an emergency measure to meet any shortage in the domestic market.

China, as a matter of policy, has basically relied on its own resources for staple food supplies. The country's agricultural specialists usually pride themselves for being able to feed more than 20 percent of the world's population despite having less than 10 percent of its arable land. To be precise, the country meets about 95 percent of its food demand from domestic sources.

China cannot shirk its responsibility simply because there is no alternative. And the responsibility to stabilize the domestic and global markets has increased manifold because of climate change and freaky weather.

According to forecasts, this year's global grain output is likely to fall by more than 5 percent from last year's 681 million tons to 646 million tons.

In contrast, China's summer crop this year, which mainly comprises wheat and makes up roughly one-fourth of its total yearly farm output, was 123.1 million tons, slightly less than last year's 123.5 million tons. But National Development and Reform Commission officials say that wheat production this year was actually 1 million tons more than last year.

As for the autumn crop, specialists have said corn production could increase by 4 million tons from last year's record output to 168 million tons this year.

This year's food security may be ensured, but it would take much greater efforts to ensure food security in the coming years. The national grain reserve system has to be strengthened and, hopefully, expanded to cover some non-staple but financially important products.

New investments have to be made to overcome the devastation that floods in the last two months have caused. The waters have not only washed away crops, but also destroyed farm waterworks across extensive areas.

China cannot yet afford to relax in its efforts to ensure its food security.