Global Stocks Of Grain: Implications For U.S. Policy

Grain stocks held over from one crop season to the next provide vital insurance against future crop failures. The size of that stock and how it is controlled long have been global concerns. In recent years - a curious pattern of global interdependency evolved where the United States held much of those insurance stocks and most other countries held relatively little. From a global perspective, the size and location of grain stocks in recent years seem to be approximately optimal'. But that interdependency is fragile. For the United States and other countries, the quantity of stocks onhand appears to be an unintended byproduct of domestic grain policy. U.S. grain policy has led to the accumulation of stocks well beyond what the private sector would carry. Any future change in U.S. policy that affects stock levels will have an impact upon the rest of the world'. This interdependency needs to..be taken into account as new policy alternatives are examined.