Price controls hold China's farmers back
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Zhang Zhongjun |
Editor's Note: The price of agricultural products, both at home and abroad, has been rising dramatically. Many grain-exporting countries announced export bans and there has been global concern around food security. Since China entered the WTO, it has become more and more dependent on the international food market. Under such conditions, how can China protect its food security? Should China reduce its control over food prices? 21st Century Business Herald reporter Sun Chunfang talked to Zhang Zhongjun (Zhang), assistant of the representative of the Food and Agriculture Organization of the United Nations (UNFAO) to China, on these issues.
Q: Why have food prices such as wheat and corn soared drastically? What will happen in the future?
Zhang: The main reason for the recent rise in prices is the food supply shortage. Under such conditions, many major grain-producing countries restricted and even banned grain exports, which further magnified the problem and aggravated soaring prices.
However, generally speaking, the demand and supply of grain is still in balance. Of course, due to climate factors, the production of grain decreased to some extent, but I believe the rise in food prices will not be too violent.
The world witnessed sharp rises in food prices in 2007. That was because the grain production reduction in the previous two years meant grain stocks only took up 17 percent or 18 percent of the consumption, nearly reaching the lowest benchmark set by UNFAO.
Besides, oil prices jumped sharply in those years, from tens of dollars per barrel to over $140 a barrel. People turned to biomass energy instead and nearly 100 million tons of grain has been consumed every year as a result.
