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The Ministry of Agriculture has called on local governments to take steps to ensure autumn grain production in the wake of widespread flooding and draught.

"Stabilizing the autumn grain supply will be a challenging task," the ministry said in an emergency notice released over the weekend.

The combined effects of a decrease in farmland and natural disasters, including floods, drought and pests, pose a grave threat to grain output, Minister of Agriculture Sun Zhengcai said earlier this month.

Severe floods have hit southern China, the nation's main granary, this summer, while northeastern China has experienced a blistering drought, which has in turn triggered an explosion in insect populations.

"The loss in grain output for this year is inevitable," said Chen Sufen, chief of the Liaoning-based Huaihai Farm. "First, it was the persistent drought, and then came the bugs."

Chen runs a 7,000 mu farm in Liaozhong County, one of the nation's major grain centers. Chen said she expected grain output to fall by 20 percent this year, representing losses of 200,000-300,000 yuan ($26,400-$39,600).

Liaoning is one of the main grain production bases in northeastern China, turning out some 15 million tons of grain last year.

The Ministry of Finance has allocated more than 60 million yuan in relief funds to flood-hit areas.

Grain production is not only about food security, but also stability, experts said.

"A decline in grain production will drive up food prices, which will inevitably cast a shadow over the nation's bond market," said Yang Yongguang of Sealand Securities.

However, Huang Jikun, director of the Chinese Academy of Sciences' Research Center of Agricultural Policy, told China Daily that "floods in southern China would not cause fatal damage to the nation's grain output".

"In fact, we need not worry about food security if there are no nationwide natural disasters," said Huang, who is also a top advisor to the nation's leading policy-makers.

The authorities have been increasing fiscal support and production guidance to grain producers in recent years. Statistics from the agriculture ministry suggest that central government subsidies for grain production would increase 63 percent to 42.7 billion yuan this year.

(China Daily 07/23/2007 page3)