ACCORDING TO AN ARTICLE TITLED "THE NEXT SUB LOAN CRISIS MAY OCCUR IN THE FOOD FIELD" PUBLISHED ON THE WEBSITE OF THE FINANCIAL TIMES ON SEPTEMBER 13, THE DAILY NEWS OF THE REFERENCE NEWS NETWORK REPORTED THAT THE COVID-19 EPIDEMIC MAY CAUSE FOOD PRICES TO RISE, TRIGGERING THE FOOD CRISIS. THE CONTENT EXCERPT IS AS FOLLOWS:AMONG ALL THE PROBLEMS CAUSED BY THE COVID-19 EPIDEMIC, THE MOST NOTICEABLE THREE ARE FOOD INSECURITY, THE DEMISE OF SMALL ENTERPRISES AND THE TURBULENCE OF THE ASSET MARKET.DUE TO SIGNIFICANT UNEXPECTED CHANGES IN THE FINANCIAL SECTOR, THE ABOVE SITUATION MAY BECOME EVEN WORSE. LARGE BANKS INCLUDING DUTCH BANK, DUTCH COMMERCIAL BANK, AND BNP PARIBAS HAVE EITHER WITHDRAWN FROM COMMODITY TRADE FINANCING OR REDUCED THEIR FINANCING SCALE. THIS WILL LEAD TO FUNDING GAPS FOR SOME FARMERS, AGRICULTURAL PRODUCT PRODUCERS AND DISTRIBUTORS, FOOD CHAINS, AND OTHER SMALL AND MEDIUM-SIZED ENTERPRISES, ALL OF WHOM ARE IMPORTANT COMPONENTS OF THE GLOBAL FOOD SUPPLY CHAIN.MICHAEL GREENBERG, A PROFESSOR AT THE CAREY SCHOOL OF LAW AT THE UNIVERSITY OF MARYLAND AND FORMER HEAD OF TRADING AND MARKETS AT THE U.S. COMMODITY FUTURES TRADING COMMISSION, SAID THAT THIS ISSUE IS LIKE A HUGE ICEBERG BENEATH THE SURFACE OF FINANCIAL MARKETS. WE MAY NOT SEE IT YET, BUT WE ARE MOVING TOWARDS IT.HE IS CONCERNED THAT IF SECOND - AND THIRD TIER AGRICULTURAL ENTERPRISES - WHOSE TRANSPORTATION OR MANUFACTURING BUSINESSES RELY ON THE AFOREMENTIONED FINANCING AND HEDGE AGAINST PRICE RISKS IN THIS VOLATILE INDUSTRY - CANNOT OBTAIN FUNDS OR ARE FORCED TO BORROW FROM SHADOW BANKS AT HIGHER INTEREST RATES, THEN GRAIN PRICES MAY SOAR. HE POINTED OUT THAT WE MAY ALSO SEE AN INCREASE IN CORPORATE CONCENTRATION AND MARKET RISKS IN THE COMING MONTHS.GREENBERG SAID, "EVERY COMMERCIAL PRODUCER MUST HEDGE RISKS BY PURCHASING FUTURES CONTRACTS." HE POINTED OUT THAT CROP PLANTING CYCLES TAKE SEVERAL MONTHS, DURING WHICH PRICES MAY FLUCTUATE DRAMATICALLY. TO HEDGE RISKS, THEY MAY REQUIRE SHORT-TERM TRADE FINANCING.IF BANKS ARE ONLY WILLING TO PROVIDE LOANS TO LARGE AND WELL-KNOWN ENTERPRISES, THEN SMALL AND MEDIUM-SIZED PRODUCERS WILL BE FORCED TO SEEK HELP FROM SHADOW BANKS, WHICH IS ALREADY A COMMON PRACTICE. IN ADDITION, SUCH TRANSACTIONS LACK TRANSPARENCY DUE TO THE ABSENCE OF A SINGLE CLEARING HOUSE, MAKING IT ALMOST IMPOSSIBLE FOR LENDERS TO KNOW ABOUT SITUATIONS SUCH AS BORROWERS PLEDGING THE SAME COLLATERAL MULTIPLE TIMES.THERE ARE ALREADY SIGNS THAT RISKS ARE APPROACHING. LAST SPRING, A SERIES OF COMMODITY TRADING SCANDALS OCCURRED IN SINGAPORE, INCLUDING THE CONCEALMENT OF A LOSS OF $800 MILLION BY THE FOUNDER OF XINGLONG TRADING COMPANY. THIS NOT ONLY REFLECTS WIDESPREAD FRAUDULENT BEHAVIOR, BUT ALSO HIGHLIGHTS THE OPACITY, HIGH LEVERAGE, AND VOLATILITY OF THE COMMODITY INDUSTRY, MAKING IT A HIGH-RISK AREA FOR LARGE BANKS TO OPERATE IN.GIVEN THE PRESSURE THAT BANKS HAVE ALREADY FACED, INCLUDING THE HIGHER CAPITAL ADEQUACY RATIO REQUIRED BY INTERNATIONAL LAWS AND REGULATIONS, AND THE NEW CAPITAL PRESSURE BROUGHT BY THE COVID-19 PANDEMIC, IT IS NO WONDER THAT MANY BANKS HAVE DECIDED TO WITHDRAW FROM THIS MARKET OR ONLY DO BUSINESS WITH BIG CUSTOMERS.THIS EXACERBATES AN EXISTING TREND: THE STRONG ARE STRONGER. EVEN BEFORE THE OUTBREAK OF THE EPIDEMIC, THIS TREND HAD ALREADY EMERGED IN THE AGRICULTURAL SECTOR, JUST LIKE IN MANY OTHER SECTORS. HOWEVER, THE COVID-19 EPIDEMIC HAS EXPOSED THE VULNERABILITY OF FOOD MONOPOLY, RESULTING IN OVERSUPPLY IN SOME AREAS AND SHORTAGES AND PRICE INCREASES IN OTHERS. A FEW LARGE COMPANIES CONTROL AREAS SUCH AS MEAT PACKAGING AND GRAIN PRODUCTION, AND OFTEN ONLY DO BUSINESS WITH ONE TYPE OF DISTRIBUTOR - RESTAURANTS, BUT NOT FOOD STORES. THIS UNDOUBTEDLY CREATES AN ECONOMICALLY "EFFICIENT" SYSTEM, BUT THIS SYSTEM IS QUITE FRAGILE.IT IS EASY TO IMAGINE THAT IF THE SUPPLY CHAIN IS INTERRUPTED AGAIN LATER THIS YEAR, IT WILL CAUSE EVEN GREATER CHAOS AND FOOD INSECURITY. IF A LARGE NUMBER OF HIGHLY LEVERAGED AGRICULTURAL ENTERPRISES GO BANKRUPT AT THE SAME TIME, IT MAY ALSO TRIGGER MARKET TURBULENCE.THE EXTINCTION OF SMALL FARMERS WILL NOT ONLY HAVE A CHAIN EFFECT ON OTHER INDUSTRIES SUCH AS PACKAGING, MANUFACTURING, AND TRANSPORTATION, BUT THEIR DEBT (ESPECIALLY IF PACKAGED INTO HIGH-RISK SECURITIZED PRODUCTS) MAY BECOME A GREATER MARKET RISK.AT LEAST, GIVEN THE RISING LOAN COSTS OF A LARGE NUMBER OF PRODUCERS, THE RISE IN GRAIN PRICES IS ALMOST A FOREGONE CONCLUSION. FOR MANY UNEMPLOYED CONSUMERS STRUGGLING TO MAKE ENDS MEET, THIS IS NOT GOOD NEWS.