Most parts of the developing world are facing a food crisis. How can China, as the most populous country, remain unscathed by the rising tide?
Unless two things are done, officials cannot convince the public that there is no need for fear. On the short term, the first task is to provide the actual figure of the country's grain stocks, and to guarantee a good harvest of the new crops in 2008.
The other is a long-term task. Since farm products have become more expensive, the government has to come up with a program to give the right incentives to farmers, and to cushion consumers at the same time.
Two weeks ago, the Chinese-language press questioned, and as in some opinion pieces, practically ridiculed a national grain administration official for saying that seeing no grain in the State grain storage can be a normal thing. That, as some critics said, was a tongue-twister similar to "we don't know what we don't know".
Well, it is time to know. Sources close to the State Administration of Grain are now saying that all its key officials are on inspection trips in different places of the country, following dispatches from the premier..
This is a necessary first move whenever alarm is heard, whether from inside or outside China, about the food supply. A considerable part of China's anticipated stock of 50 million tons of rice, among other staples, is usually kept in small farmers' barns rather than in the State's large storage centers. The figure is only a rule of thumb but it gives an idea of the range of the total quantity available in an average year.
How much the government can depend on that figure when it comes to planning for contingencies would require a double check. In a week or so, one would assume, the inspecting officials would come back to Beijing with the more accurate numbers about China's grain stocks.
But the grain storage officials should not be the only ones making inspection rounds. In one and half months, farmers will begin to harvest their first crop of the year.
Will there be a normal output? And will the nation's total summer crop, which makes up one-third of its yearly supply, remain at the same level as last year's? People can feel more reassured if these questions are properly answered.
However, even if these questions are satisfactorily answered, the world food price level will continue to rise - due mainly to the increasing use of land for biofuels, and the dampening effect of rising prices of inputs of farm production . These are long-term factors and are likely to push up the food price level even higher.
If an increasing share of the world's energy is to be provided by farms, then sooner or later, the general price of farm produce will edge toward, if not exceed, that of oil products. And, not many people are prepared for that kind of "new equilibrium", as economists would call it. Between now and then, as the World Bank has warned, some countries may even go through social unrests. With or without social unrests, in no country will farm sector and the food market remain unchanged.
By contrast, not a single official economist has offered to talk about the future changes in that perspective. Officials tend to imagine that the current inflationary cycle is only temporary, or to leave such an impression on their audience, while in fact, this can hardly be the case.
A more realistic way to prepare for the future is to offer higher prices to encourage farmers to produce more, while develop some strategies to help low-income groups. Instead of a general ration, coupons on certain designated items may be a practical solution.
But of course, the key is to increase production and productivity.
E-mail: younuo@chinadaily.com.cn
(China Daily 04/21/2008 page4)
