World faces challenge of rebuilding grain stocks.

After decreasing for three consecutive years, world carryover stocks of grain in 1996 have dropped to 48 days of consumption, the lowest level on record. As stocks have fallen, prices of wheat, rice, corn, and other grains have risen by 50% or more since late 1994. In extreme cases, such as in some provinces of China, corn prices have more than doubled since early 1994. Within Europe, prices of barley, the leading food grain, nearly have doubled over the last year.

Steep rises in grain prices could lead to widespread political instability, warns the Worldwatch Institute. Among the urban poor--those already spending 70% of their income on food merely to survive--such an increase in grain prices quickly becomes life-threatening. Food scarcity on the scale now unfolding exacerbates ethnic and regional conflicts within societies. It not only threatens the lives of millions of the world's poor, but also the political stability on which future economic progress depends.

The replenishing of stocks to restore a minimal measure of food security poses an immediate challenge to the international community. When stocks dropped to the previous record low of 55 days of consumption in 1973, it took three years of all-out production, planting fence row to fence row, to rebuild stocks to a secure level. To do so in the late 1990s may be far more difficult, given the declining response of grain yields to additional fertilizer use.

The most immediate reason for the sharp stock decline in 1996 was the weather-reduced 1995 harvest. A cold, wet spring in the Midwest delayed planting of the U.S. corn crop beyond the point when maximum yields could be attained. This was followed by crop-withering summer heat waves that reduced harvests across the northern tier of industrial countries. Another summer of record-setting heat waves in the U.S. Midwest quickly could lead to chaos in world grain markets, with prices going off the top of the chart. Altogether, eliminating the deficit from 1995 (65,000,000 tons), covering the growth in global population in 1996 (28,000,000 tons), and rebuilding stocks to 60 days of consumption (58,000,000 tons) adds up to a need to expand the 1996 harvest by 151,000,000 tons, or nine percent. Raising the 1995 harvest of 1,685,000,000 tons to 1,836,000,000 tons is not impossible, but, given the lack of growth in the world grain harvest since 1990, it will take an...