Food Supply and Demand in the Year 2020 and the Necessary Reform in Japan's Agricultural, Forestry and Fishery System
Hiroshi Tsujii
Professor. Division of Natural Resource Economics
Graduate School of Agriculture
Kyoto University
1. The Long-Run Causes of the Grain Crisis in 1996
The world grain stock ratio (ratio of stock volume against use volume) has shown a tendency to fall since 1987, whilst the grain price has risen. According to the data released in August 1996 by the United States Department of Agriculture (USDA), the total grain stock ratio was 13.7% at the end of the crop year of 1995/96, the details of which are shown in Chart 1, such that wheat was 18.9%, rice was 13.0%, and coarse grain (grains other than rice and wheat, such as corn and barley which are mainly used for feed) was 10.5%; they are just around, or much lower than, the 17% mark which is the safety standard of the Food and Agriculture Organization (FAO) of the United Nations. These stock ratios are at the worst level since the war, except for rice, and are lower than the level during the food crisis year of 1974. Estimates for the end of the harvesting season in 1996/97 are nearly the same as the previous season and they are in 13.8%, 19.3%, 12.5% and 10.6% respectively. Mr. J. A. Sharples, a specialist on the world grain market from the United States Department of Agriculture, mentioned in the fourth issue of Choices magazine in 1995 that the falling world total grain stock will reach a very low level in autumn 1996, and 72% of the stock is the pipeline stock in the marketing channel and 27% is the national reserve stock to cover poor harvests in each country such as China and the ex-Soviet Union, etc. Especially he said that the stockpile of major grain exporting countries such as America and Canada, which have played the role of international grain reserve stock holding countries since the war, will be only 1.4% of the estimated low world grains' stock. The world grain market was really near to crisis. The Chicago grain futures price and rice export price in Bangkok have been increasing since the beginning of 1995, with the price of corn reaching $5.48 per bushel on July 12th, 1996, the highest price on record, wheat is around $5 which is a 15 year high, and the price of soya beans also increased approximately 30% since last October in reaction to this situation.
