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Chinese attack on US beancounters goes far too far

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Enough is enough.

The US Department of Agriculture has been, fairly, flayed by investors for its wayward approach to crop data, such as cutting corn sowings estimates by 1.5m acres on June 9 only to raise it by 1.6m acres three weeks later.

Consistency matters when consumers and farmers, let alone speculators, are making big commercial decisions. The US corn crop alone is worth more than $80bn.

But for the Fei Zhonghai, a senior official at Cofco, China's state food trader, to condemn the USDA data as an "insult" smacks of retribution rather than balanced, let alone constructive, criticism.

Numbers game

Retribution, because it is China which is, typically, at the butt of attacks over the accuracy of official statistics.

That encompasses headline data such as economic growth - which has a history of being at odds with records on the likes of electricity use and air passenger numbers with which there should be a close correlation - let alone statistics such as crop output.

China's harvest estimates have a habit of being swollen by a provincial subsidy system which pays by production. It is not clear, for instance, there has ever been a resolution of the 20m-tonnes-plus gap between official and private estimates of the 2009 corn harvest.

Certainly, what we know of crop prices paid in China, such as the resilient values of Dalian corn, speak of a market far tighter than official data appear to indicate.

Best in class

That doesn't deny Mr Fei the right to criticise the USDA. Cofco appears indeed, like other farm groups, at risk of "huge losses" from volatile statistics, as he says.

But to brand the world's most comprehensive and transparent crop data, for which he has not paid, as an "insult" oversteps the mark by a distance. How does he judge China's statistics – as acts of war?

Mr Fei would do far more good for world data by campaigning to open up and improve China's own grasp of its crop dynamics than aiming brickbats at the best in class.

Follow the leader

Two conclusions come to mind.

The first is that Mr Fei should comply with the doctrine of Wen Jiabao, China's premier, who last week said millennia of suffering had "taught the Chinese never to talk to others in a lecturing way, but to respect nations on the basis of equality".

The second is that France had a point in prioritising accurate data in its recent campaign to curb rising food prices.

The French proposals included dollops of claptrap, such as the tired and misdirected attack on farm commodity speculators.

But better data and increased transparency, from countries including China, would improve crop markets' ability to set appropriate prices, for the good of Cofco, Mr Fei and all.

By Mike Verdin

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