QUEBEC CITY – On a weekend when a United Nations agency warned of a potential grain supply crisis, two of the world’s largest grain exporters began to discuss how best to “manage” supplies at a time of declining stocks.
United States agriculture secretary Dan Glickman and Canadian agriculture minister Ralph Goodale raised the issue when they met privately Oct. 14 in Quebec City.
Goodale said talks will continue and be expanded. They will include the issue of whether there should be an internationally funded grain reserve.
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“The world supply situation is so much on the knife edge that one year of bad production somewhere could have very serious consequences,” Goodale said.
He said he and Glickman spent much of the meeting talking about the need to “manage” the supply and demand dilemma.
And they want to expand the discussion to include other exporters, as well as importers.
How to manage system
Goodale said the two ministers agreed a key issue is how to operate an increasingly lucrative commercial grain market, as well as ensure that grain is available for hungry nations that cannot afford commercial prices.
“We did not talk about a grain reserve in those words but it’s another way of talking about a reserve,” he said.
Meanwhile, the UN Food and Agriculture Organization warned 1996 is looming as a pivotal year for world food supplies.
It said tens of millions of poor people are at risk in countries hit by drought, poverty or war.
In a production outlook released Oct. 15, the FAO said the 1995 cereal harvest will be 11 million tonnes lower than it predicted just a month earlier.
“Next year’s cereal harvest will be crucial for world food security,” said the Rome-based UN agency that last week held a 50th anniversary meeting here.
“With the safety net provided by carryover stocks now largely eroded, global output must increase by some five percent or 95 million tonnes just to meet the requirements in 1996-97.”
An even sharper increase would be needed if grain stocks, now totalling little more than a month’s requirements, are to grow.
Meanwhile, millions of people are in desperate need of emergency food aid, including 10 million in drought-wracked southern Africa.
FAO analysts said smaller than expected feed grain harvests in the United States and the former Soviet Union mean world cereal production this year will be 1.891 million tonnes, down 58 million tonnes from last year.
The FAO said that by year-end, world inventories will fall to 265 million tonnes, down 30 percent over three years.
“High cereal import prices couple with reduced food aid availabilities … could have serious consequences for the food security of low-income food deficit countries,” said the FAO analysis.
