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Rule on Grain Reserves to Ensure Food Safety

The nation's first regulations on management of central grain reserves will lay a solid foundation to ensure China's food safety, experts say.

The State Council issued the regulations - which contain detailed clauses on the planning, stockpiling, usage and supervision of State grain reserves - over the weekend, a move widely believed to be a crucial step in building up a sound food security system.

They also clarify responsibilities and duties of related departments, such as the finance departments, the development and planning departments, the Agriculture Development Bank of China, and local governments, in supporting and coordinating the management of reserves.

Grain reserves can be used only under the following circumstances and only with the authorization of the State Council:

Obvious supply shortage or sharp price fluctuation in the national or regional markets;

Occurrence of major natural disasters or unforeseen events; and

When the State Council believes it is necessary.

Analysts say that by clarifying that only the State Council can authorize the use the reserves and by defining the preconditions for using them, the regulations can play a fundamental role in ensuring food security.

The regulations were released at a time when China has more than sufficient food stockpiles.

Although the exact quantity is not known, insiders say a "huge amount" of grain stocks is currently held by government bodies, commercial businesses and by farmers.

"This proves the State Council is far-sighted," said Lou Yuangong, director of the grain economy institute at Zhengzhou Engineering College.

The regulations further improve the vertical management system in this field, under which the State Grain Reserve Management Corp manages the grain reserves through its branches and warehouses across the country.

China began to establish State grain reserves in 1990 when the grain administrative departments entrusted grain departments in provinces, municipalities and autonomous regions to manage the reserves.

Later, these departments entrusted warehouses at county levels to manage the reserves themselves, which resulted in chaos in management.

In 2000, the State Council decided to establish the State Grain Reserve Management Corp, which is responsible for purchasing, stockpiling, transporting, selling and exporting and importing of grain reserves.

Analysts say the State grain reserves have in the past years played a big role in protecting farmers' interests, balancing supply and demand, stabilizing market prices, and dealing with unforeseen events.

With a population of 1.3 billion, China is the world's largest food consumer; which has led some foreigners to even question how the country could feed such a huge population.

Chinese agricultural officials and experts reaffirm that China's huge stockpiles and its growing production capacity mean that the country's food security is under no imminent threat.

But they also noted that consumption has been outpacing production and the gap between supply and consumption will gradually widen.

Minister of Agriculture Du Qinglin said earlier that China's grain consumption outpaced production in 2000, 2001 and 2002; and experts say such a situation should not be neglected or allowed to evolve into a long-term trend.

(China Daily September 3, 2003)

China Adopts Grain Reserve Regulation
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