The Bangkok free-on-board (FOB) export price of 100% first grade rice rose to $465 per ton on September 5th, 1996, which was also a 15 year high.
Although some of this reduction in grains stock ratios and the subsequent increase in grain prices are caused by short term reasons, such as reduced production of rice and coarse grains in the 1995 crop year in America, surplus investment funds flowing into the grain futures market caused by a general slow-down in business of high income countries and the increased price of feed grains caused by an increase in the price of American beef due to mad cow disease; basically they are influenced by long term factors such as transformation in agricultural policy during the late eighties through to the nineties in both Europe and America, probable the limits in agricultural technology improvement, restrictions in and degradation of natural resources such as soil and water, a slowdown in the rate of increase of the world grain yield from the seventies to the eighties as a result of the limits of photosynthetic ability of weal plants, the world population explosion and the rapid increase in demand for feed grains caused by the high economic growth in Asia, most notably in China. These long term causes and their influences on food supply and demand in the 21st century are considered in this chapter, along with the supply and demand for grains, and the agricultural policies of China and Japan.
2. Transformation of Agricultural Policies in Europe and America after the Last Half of the Eighties.
Since the last half of the eighties, the food policy in Europe and America has changed from a protectionist, surplus production and export dumping policy to a policy of reduced protection, curtailment of surpluses, correction of inter-regional differences and environmental protection. The EC eariler had achieved increased production, improving its agricultural structure and increasing the income level through variable import levies of the Common Agricultural Policy
