1997 Volume 39 Issue 3 Pages 1-14
The sky-high prices of Chicago Futures Market for grain from spring to summer of 1996 seemed that the new era of grain shortage has come and the era of surplus typically found in 1980s had already passed. So, the new scheme of WTO resulted from the GATT Uruguay Round Negotiation started from the late 1980s and finished in Dec. 1993 aiming so called 'Free Trade' based on the large U. S. and EU grain surplus, must face big issues of shortage, especially for the country heavily dependent on imported foodstuff like Japan. The change seen in the wild fluctuation of market prices may have resulted from destabilized supply due to the expected increase in abnormal weather, export regulations in response to shortage of grain like EU export tax introduced in 1995 autumn, growing demand for feed seen in the developing countries like China and other East-Asian countries and the expected population explosion taking place in the less developed countries, as lots of analysts say. Surely these factors explain partly the recent change of future market. However, the new situation that the large U. S. grain surplus and huge stock, which had eased the influence of large swings in annual harvests exerted upon the market, can no longer be counted because of U. S. farm policy change, should be pointed as the main factor. Due to my judgment, after the Soviet Union Block collapsed U. S. has not take the role of food security for her allied countries by stocks held in government and she can not afford financially to have huge stock, resulting in policy change to little stock. What I should emphasize is that the subsidy cut for the policy measure to more domestic production requested to all party country by WTO must make the supply-demand imbalance more trouble. For a country depending on importing farm products, the view of food security should be taken into consideration in farm policy, especially for Japan with the exceptionally low level of food self-sufficiency rate among the developed countries.
