"Since it is an open audit, they (granaries) might have been prepared and borrowed grain from others. As a result, inspectors will be cheated."

Yuan suggests secret investigations and more spot checks. He said that's what helped "catch two big fish" last year -- one in Northeast Heilongjiang Province and the other in Anhui.

The Heilongjiang scandal, which was exposed last May, involved one of China's largest granaries, Fujin No. 90. Its managers stole then sold grain that was supposed to be stored there. They lied about stock volumes to get government subsidies. The corruption resulted in public losses of more than 100 million yuan.

The same thing happened in Anhui, where granaries of several state-owned companies were found empty last April.

That's not the only problem with China's reserve food system.

Companies have been reluctant to store grain because its become more costly. They have to purchase grain from farmers based on set government prices. For example, white wheat is fixed at 1,740 yuan per ton this year. Prices to sell that grain in the Chinese market, however, are much lower than that, so companies end up illegally re-selling state-owned stocks to private buyers at higher prices.

The result is that there is no concrete number for just how much grain China really has in national reserves.

Zheng Fengtian, an agricultural scholar with Beijing-based Renmin University of China, said the latest audit reflects concerns within the leadership over the real figure.

"There is a big difference between official statistics and private calculations," Zheng told Xinhua.

Reserved for food security

Wrong figures pose a big threat to China's strategic policy of grain self-sufficiency and food security.

"Grain is a strategic material. In case of natural disasters, what can you do if you don't have grain? You have to store reserves," Yuan said.

The country set up a grain reserve system in 1990. Reserves are divided on their importance into four categories: central, local, national temporary and commodity.

According to the State Administration of Grain, China's 1.3 billion people use approximately 500 million tons of grain annually, or more than 300 kilograms per person. Of that, China produces nearly 95 percent of the grain it consumes.

Lester R. Brown, known for his book "Who Will Feed China?", which was published in 1995, said food security in China is a highly sensitive issue.

During 1959–61 when China was hit by a severe famine, 30 million Chinese starved to death.

"This is why Beijing has worked so hard in recent decades to try and maintain grain self-sufficiency," Brown wrote in a statement emailed to Xinhua.

He warned that aquifer depletion is now a particularly serious threat to grain production in China since about 80 percent of its grain harvest comes from irrigated land.

Yuan, the 79-year-old rice scientist, echoed Brown's view.

"In 1959, a severe drought hit China and badly damaged grain yield," he said. "I saw five bodies of the starved besides farm fields and roadsides. It was really miserable."

Yuan called on the central government to ensure more grain reserves and to make them last for at least 100 days at China's consumption rate. That's 30 days more than the minimum 70 days of consumption set by the UNFAO.

"Currently, we don't know how many days our grain stocks can sustain.That's why we need such a nationwide audit," he said. "The best target will be 180 days given China's population."

The entire national grain audit is supposed to be completed by the end of June. Then a final report will be submitted to the State Council, or cabinet.

(Xinhua News Agency April 14, 2009)