Within this framework, the current rice scandal is especially noteworthy given that China is the world's largest producer and consumer of rice. Government officials in the city of Guangzhou found that eight out of 18 samples of rice (which originated in Hunan province) had high cadmium levels. Although recent government reports downgrade the severity of the contamination, uncertainly remains.

The loss of trust among consumers could significantly drive up demand for rice imports. Given China's large appetite for rice, a shift in demand from domestic- to foreign-produced rice could have a significant impact on the international rice market.

Going forward, a number of actions are needed so that the expansion of China's economy and population does not come at the cost of food safety.

First, legal, regulatory and institutional frameworks need to be upgraded. Regulatory reforms to improve food safety should cover the entire food supply chain, from production all the way to processing and marketing, accompanied by strict criminal penalties. These reforms need to be implemented within a streamlined institutional framework that clearly defines the distribution of responsibilities among government levels and agencies. And technological innovations - such as biotechnology - need to be supported by transparent and scientific regulatory systems, so that opportunities to use these technologies are not lost.

Second, food safety monitoring has to be improved. The effectiveness of food safety regulations hinges on the capacity of food safety officials to monitor compliance along the entire food supply chain. Increased resources are needed to hire and (continuously) train highly qualified inspectors. Focus should also be placed on developing and providing cutting-edge technologies and facilities to test food, soil and water for potential contamination. Local communities and consumers can play a role in improving food safety by forming local and regional organizations to monitor food quality. Online platforms can be an especially useful tool in this endeavor.

Third, stakeholder capacity to meet food safety regulations should be increased. Institutional innovations for vertical and horizontal coordination should be promoted to help smallholder farmers and other participants in the food production system meet food safety standards. Examples of innovative institutional arrangements include public-private partnerships, rural marketing cooperatives and producer associations. These platforms can, for example, be used to provide smallholders with information and training on food safety.

Fourth, there is need to help stakeholders manage risk. More productive and better-targeted social safety net programs and innovative insurance schemes are needed to cushion smallholder farmers, agribusinesses and traders against food safety shocks. Such instruments can be used to compensate farmers who lose business and revenue during the outbreak of disease and food contamination scandals.

The current rice contamination scandal, which is a staple for the majority of Chinese people, will hopefully serve as a catalyst for the implementation of these actions to improve food safety in China.

The author is director general of the International Food Policy Research Institute.