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Food Economics: Rice
|by Benjamin Gisin, Touch the
Philippines-based International Rice Research Institute describes the
world’s rice shortages as a function of consuming more than we are
producing — drawing down stocks built up by farmers nearly a generation
ago to augment current consumption. The institute reports that
population growth, increases in caloric intake in emerging economies
such as China and India, and urbanization of farmland all contribute to
For nations less affected by skyrocketing rice prices and shortages,
there is merit in being aware of the unusual measures food-insecure
nations are adopting. After two decades of economic globalization, the
rice crisis has precipitated a food-security awareness that is taking
on a “national” character.
Consumers, Soaring Prices
an oil-rich Middle East nation of 3.3 million, is stockpiling rice. The
Gulf Daily News recently reported that Oman was securing 200,000 tons
of rice, enough to feed the population for two years. The action was
augmented by the government — which increased state salaries by as much
as 43% and boosted state pensions by 5% to 35% — to help offset
dramatic food inflation.
In the Philippines, president Gloria Arroyo has implemented a
moratorium on commercial property development, such as shopping malls
and golf courses, that would encroach on farmland. As the world’s
largest rice importer, the government is desperately trying to narrow
the nation’s dependence on imported food, and has earmarked $1 billion
to boost production of rice and other foods.
The Los Angeles Times recently reported that Arroyo went so far
as to suggest that roadside stands and restaurants cut in half the size
of their rice portions as a way to reduce demand. Philippine rice
prices, once 65 cents a kilo (2.2 lbs.), are now more than 90 cents a
kilo. Government rice supports are making rice available to the poor at
37 cents a kilo. China, the world’s most populous nation, has moved to
block an emerging black market that sends rice out of the country
without state approval.
Trying to stay ahead of the “rice game,” Indonesia is expanding its
domestic rice acreage. One of the world’s largest rice consumers,
Indonesia has taken pro-active steps to ward off domestic fears and
food inflation. In nations with limited agricultural resources that
must import rice, civil unrest is growing.
Suppliers Cutting Exports
the world’s second-largest rice exporter, will limit rice exports this
coming crop season by 22% amid spiraling domestic food costs and to
contain domestic fears of a shortage. The
Christian Science Monitor has reported that India, the world’s
thirdlargest supplier, also has limited rice exports to contain food
supply fears and domestic food infl ation. Cambodia, another major rice
exporter, has followed suit.
Thailand is the world’s largest rice exporter. So far, that nation is
not limiting exports, but has taken advantage of skyrocketing rice
prices to bring in badly needed cash. Thai prime minister Samak
Sundaravej recently asked his citizens to eat less rice, so that more
would be available to meet export demands while prices are high.
Thailand has also considered joining a move to create the Organization
of Rice Exporting Countries. This proposed “rice cartel” has prompted
strong criticism from Thai citizens and rice importers worldwide.
at Risk of Starvation
increases in fertilizer and energy costs have placed rice farmers at
tremendous risk. A collapse of rice prices, to levels of just a year
ago, could send the “wrong” signal to rice growers at a time when the
world needs to build up rice stocks. Stunned and looking for answers,
millions of people are wondering why “free” markets sent a signal to
raise more rice only after an additional 100 million (U.N. estimates)
were placed at risk of starvation as critical stocks collapsed.
If the rice crisis does nothing more than raise awareness of the
fragility of global food production, and the lack of dependability of
fi nancial mechanisms to distribute that food, it will have served as a
significant milestone on our path to discovering a more food-secure
|Benjamin Gisin writes and lectures extensively on
the promise of local food systems, agricultural sustainability and food
security. For more information, visit Touch
the Soil magazine: www.touchthesoil.com.
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