China publishes new draft law aimed at strengthening food security

New Delhi — China has published a draft law, seeking public comments, aimed at ensuring national food security and reforming the management of high grain reserves in the country, according to a report on the National Development and Reform Commission's website Dec. 3.

New issues have emerged in the management of food reserves, posing severe challenges to the security of food reserves, according to the draft report released on the NDRC website.

The draft law comes at a time when China's grain purchases, especially corn, have unexpectedly surged in 2020.

"The goal is to ensure a strong food reserve security management system, promote the complementary and efficient coordination of functions of central, local reserves, and social responsibility (food) reserves," the report said.

The draft law seeks to establish clear guidelines on storage, usage, sales, rotation and supervision of government and social grain reserves.

The central grain reserve can be used for adjusting imbalances in the overall total supply and demand of grain in the country or in some provinces and autonomous regions; in case of major natural disasters and other emergencies, and during abnormal fluctuation in price levels. The local and social grain reserves can be used for similar purposes when it is limited to local or some administrative regional levels, the report said.

The local governments should also establish a moderately large-scale reserve of processed grain and oils in major large and medium-sized cities subject to market conditions, the report added.

China Grain Reserve Management Group or Sinograin, which is responsible for the operation and management of the central grain reserve, should not engage in other commercial business activities except for the policy tasks entrusted to it by the state, the report said.

Government reserve storage enterprises cannot use government reserves as guarantees or repayment of debts and no physical delivery of futures is allowed, it added.

The draft law also specifies the grain reserve rotation principle, the basis for reporting and the deadline for completion of the rotation. Public feedback on the draft law closes Dec. 31, according to the report.