World Grain - April 2013 - 10

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Cargill executives speak
about food security
BEIJING, CHINA — In a panel discussion about food security
at the China Development Forum on March 23, Cargill Chairman
and Chief Executive Ofﬁcer Greg Page said Cargill believes there
is no need to fear a food crisis if the industry acts collectively and
reacts wisely.
Page emphasized ﬁve areas that are critical to achieving a wise
food security policy.
“The ﬁrst is a better appreciation of the role of price. Too often
price is talked about simply as a potential contributor to inﬂation.
Too little attention is given to the role of price in incentivizing the
world’s farmers to produce the calories in grains and protein that
we all need. Meanwhile, governments are faced with the challenge
of balancing the cost of food for urban consumers with the need to
ensure that farmers receive the right signals from the marketplace in
terms of price,” said Page.
He believes using price to incentivize farmers while still meeting
the need of urban consumers is the key ensuring there are sufﬁcient
quantities of safe, affordable food for all.
“The second is that we need to separate the conversation that we
have about smallholders from subsistence farming,” Page said. “The
signals that one would respond to as a commercial smallholder and
the policies that they need to thrive are quite different from the ones
that are required for subsistence farmers. So we can’t talk about them
from a policy standpoint as a single entity if we are to have the ability
to feed the world.”
Third, Page stressed that the world needs to have a very good
conversation about the role of science, especially the acceptance

of science in the production of food.
He said, “The world must produce the 70%
more calories by 2050 on the same or less land
while making food safer, generating less greenhouse gas, using less water and using fewer
chemical inputs. All those achievements are
available to us, but only if we gain the permission of the society to use science.”
Page used China as example in his fourth
Page
point — the criticality of comparative advantage.
“The experts in China smartly exploit the country’s comparative
advantage. They strive to optimize the use of China’s soil resources
for the production of starch that is produced from corn in which
China enjoys a comparative advantage, and to import soybeans from
Brazil, whose soil resources are better suited to soybean production,”
he said. “Both countries win. The producers in both countries win,
and the consumers in both countries win.”
He also stated that trust-based trade is critical if the world’s
producers and consumers are to realize the full beneﬁts of comparative advantage.
“The ﬁfth element of a wise global food security policy is that we all
need to collectively assist Africa. If we are going achieve grain-based
food security in the world, you can’t do it without Africa. The resources
are there, but challenges remain in terms of the right policy environment,
the rule of law and the rule of private property. If the right policies and
institutions are in place, all nature’s gifts are there for Africa to turn from
an importer of calories to an exporter of calories,” Page said.

Ukraine to export 4 million tonnes of grain to China
KIEV, UKRAINE — Ukraine plans to export 4 million tonnes of
grain to China in 2013 as part of a $3 billion loan agreement between
the Export-Import Bank of China and the State Food and Grain Corporation of Ukraine (SFGCU), said Robert Brovdi, deputy chairman
of the State Food and Grain Corp. of Ukraine on March 6.
The contract between Ukraine and China, which was signed in
July 2012, stipulated the supply of Ukrainian grain during the period
of 15 years. The volume of annual grain exports to the Asian country will be determined by the supply plan with bringing the absolute
delivery volume up to 6 million tonnes per calendar year, Brovdi
said. The counterpart on the Asian side is China National Machinery
Industry Complete Engineering Corporation (CMCEC).
Out of 4 million tonnes which are to be exported to China in 2013,
2 million tonnes will be purchased directly on the Ukrainian market while the remaining 2 million tonnes will be procured through
forward contracts, according to Brovdi. This will also include the
purchase of the 2012 harvest.
Ukrainian parliament provided state guarantees for the $ 3 billion
10

loan taken out by SFGCU from the Export-Import Bank of China,
stipulating that the funds are to be used for projects in the ﬁeld of
agriculture.
The loan is set to increase trade volume, raise productivity and
stimulate equipment modernization in the Ukrainian agricultural
sector. The money will ﬁnance Ukraine purchasing crop protection
agents, seeds, and equipment from China, land cultivation, as well as
the construction of a plant for organic fertilizer processing and cropprotection agent production.
Aside from the loan, China perceives Ukrainian agriculture as an
investment opportunity. In 2013 alone, the volume of Chinese investment is set to reach $600 million, said Chi Kin Fung, the executive
director of the China-Ukraine International Engineering Cooperation
Association.
Just as in agriculture, China looks to increase its investments in
infrastructure (railway between Kiev and the country’s largest airport
Boryspil), energy (combined heat and power plant construction),
coal industry, and car manufacturing.
April 2013 / World Grain / www.World-Grain.com

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World Grain - April 2013

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