Despite three consecutive years of bumper crops, China's grain production continues to fall short of demand. Although the gap between grain supply and demand has been shrinking, anxieties about the national grain security remain due to China's huge population and scant arable land.
Figures show in 2005, the per capita arable land and water resources in China was only 40 percent and 28 percent of the world's average level. If one percent of China's domestic grain supply depends on imports, it will use two percent of the international grain trade. The increase of China's grain imports may cause significant price fluctuations on the international market.
Recently in many Chinese cities, the price of major grain products, including rice, flour and cooking oil has surged, arousing the close attention of the public and the government. China auctioned 833,000 tons of its wheat reserves this week, the fifth such auction since November in a bid to halt rising prices on the domestic market.
Chinese experts attribute the price rise to the sharp increase in global grain prices, mostly caused by droughts in the United States and Australia. China's own grain supply can now meet 97 percent of demand but with the rapid development of Chinese economy, the grain consumption will keep increasing.
The situation in the production of wheat, rice and soybean is especially severe. According to the 2006-2020 outlines for China's grain production, the country will adhere to the self-dependence policy and use administrative, legal and market means to spark farmers' enthusiasm to farm grain.
The government will improve infrastructure, irrigation and farming techniques in rural areas. China's grain prices have been low for many years, curbing the enthusiasm of farmers to grow grain.
Some of China's coastal provinces began to use their arable land for industrial use to develop more profitable industries in the 1980s. To protect Chinese farmers from artificially low grain prices, the government set a minimum sales price for grain last year. The central government has again ordered local authorities to protect the arable land from being occupied for other purposes.
Source:佚名