Rice: Grains of hope
Alastair McIndoe, Straits Times 24 May 08;
MANILA - IN A patchwork of rice fields near an expressway on the outskirts of Manila's southern suburbs, billboards advertise a swish property development planned for the area.
It is an apt image of how urbanisation and industrialisation across Asia have cut deeply into farmland: Factories, housing estates - even golf courses - now sprawl across land that once grew rice, the region's staple food.
But the developers' bulldozers are just one of a confluence of factors that have caused global rice production to fall behind consumption over the past several years.
With global buffer stocks running down, and only 7 per cent of the world's rice output traded on the international market, fears of a shortage have driven prices through the roof and triggered food riots in some countries.
That should be a salutary lesson to governments for neglecting their agriculture economies in the rush to industrialise, say rice experts.
'Countries realise they really took their eye off the ball and are desperately trying to turn things around,' said Dr Robert Ziegler, director-general of the International Rice Research Institute (IRRI), which helped spur the 'green revolution' of the 1960s.
So what would it take to put global rice output back in kilter with consumption?
Asia's farmers produced around 90 per cent of the world's rice production of 645 million tonnes last year. China and India accounted for more than half of the total crop.
The IRRI reckons that by 2015, global output must rise to 700 million tonnes to keep up with expected consumption and population growth.
So much rice land has been lost to urbanisation that in most Asian countries, expanding the land for cultivation is no longer an option. In Bangladesh, for example, around 90,000ha a year of farmland are lost to developers.
The IRRI is proposing to the governments of rice-producing countries and multilateral agencies a nine-point plan (see box) to create a second green revolution and restore rice self-sufficiency in Asia.
Massive investments will be needed, particularly infrastructure such as roads and irrigation schemes.
The International Food Policy Research Institute estimates that to revitalise overall agriculture in the region, an additional US$15 billion (S$21 billion) to US$20 billion a year must be invested.
The good news is that the fundamentals underpinning rice production in Thailand and Vietnam - Asia's biggest rice exporters - look sound.
The United Nations' Food and Agriculture Organisation (FAO) noted with approval that Thailand's rice lands are expanding, and yields have been rising at a rate of 2 per cent a year since 1988.
'I see no reason why Thailand should not continue to be a major rice exporter for at least the next five to 10 years,' said Mr Sumiter Singh Broca of the FAO's Asia-Pacific office.
Unlike many of Asia's rice-producing countries, Vietnam has not suffered heavy padi losses from urbanisation or younger members of farming families moving to the cities on a level that could affect production. That is a major problem in rural China.
'Our last harvest was a very good one. The productivity was quite high per hectare. So there will be no rice shortages in Vietnam in the foreseeable future,' said Mr Huynh Cong Thanh, deputy chief executive of the Food Company of Ho Chi Minh City, one of the country's largest dealers.
There is plenty of scope to increase production in India, said the father of the country's 'green revolution', Dr Norman Borlaug.
'The only thing that has held back higher grain production is complacency. New techniques and technology are available to increase food production,' he told the Times of India.
To provide rice security for a population set to reach 1.5 billion by 2025, India's per hectare yields must rise by 50 per cent, and the area of irrigated fields increase 25 per cent from the present 18 million ha, according to government projections.
Improving the livelihoods of Asia's rice farmers will be essential to boosting production in the long term and stopping the drift to cultivating more lucrative cash crops.
In China, where rice production is not keeping pace with population growth, farm incomes - based on 2006 data - are falling.
Studies have shown that in a two-crop year, many small farmers in Asia earn little more than US$1,000 from a hectare of land.
Rice prices have soared - but so have fertiliser and fuel costs. The windfall of higher prices is mainly being reaped by millers and traders.
'The net economic benefit for farmers out of all this has been relatively small,' said IRRI research head Achim Dobermann.
As one Indian politician put it bluntly: 'Padi is poverty.'
Additional reporting by Nirmal Ghosh in Bangkok, P. Jayaram in New Delhi, Roger Mitton in Vietnam, Chow Kum Hor in Kuala Lumpur and Vince Chong in Beijing.
Getting to the root of woes
Alastair McIndoe, Straits Times 24 May 08;
THE International Rice Research Institute (IRRI) has drawn up a nine-point action plan for governments and international agencies to boost global rice production.
Some measures deal with the immediate crisis, others are long-term solutions to prevent future emergencies. They include:
# Boosting rice yields through better crop management techniques, particularly in irrigated paddies. This could raise per- hectare yields by one to two tonnes.
# Reducing post-harvest losses suffered by most Asian farmers from poor storage, drying and processing of rice.
# Speeding up the introduction and adoption of higher-yield rice varieties.
# Increasing funding for rice research programmes. Another US$17 million (S$23 million) a year over a decade has to be invested in global rice research above current US$40 million level.
# Accelerating research on the world's thousands of rice varieties, some of which hold the genetic keys to help research better varieties.
# Training a new generation of rice scientists and researchers.
# Increasing public spending in agricultural infrastructure, critical for raising productivity growth in rice, such as roads and irrigation systems.
# Improving market systems to give rice farmers an incentive to increase production. In developing countries, higher rice prices are not always reflected in farm-gate prices.
# Strengthening food safety nets for the poor.
Rising prices but farmers still poor
Nirmal Ghosh, Straits Times 24 May 08;
BANGKOK - MR VICHAI Sriprasert, 65, is one of the 30-odd traders through whom Thailand routes its rice exports.
A generation ago, in the family's fields by the Chao Phraya river, his father would watch the water level for an indication of whether the rains would come; if the river rose, that meant it was raining in the north.
The price of rice was thus directly related to the level of the water.
Today as a trader, Mr Vichai should be laughing his way to the bank on the back of record rice prices. But it is not quite that simple, he told The Straits Times.
Farmers are currently making huge profits on their rice production, he said - but the irony is that they remain poor.
'The cost of production is around 6,000 baht (S$255) per tonne of dry paddy,' Mr Vichai said.
'Farmers can now sell at between 12,000 and 16,000 baht a tonne. But they are still poor because the average landholding is 15 rai (six acres).'
The yield from this is 15 tonnes on average. Assuming that farmers can make 10,000 baht on each tonne, that will bring 150,000 baht per year - with the possibility of doubling it (with a second crop) to 300,000 baht.
'But divide that between a family of five, and that is only 60,000 baht per person per year,' said Mr Vichai. That does not place farmers in the wealthy category.'
As for major rice exporters like himself: 'We handle 10 million tonnes. Our margins are small, and it is divided between 30 families.'
Farm subsidies spur production
Vince Chong, Straits Times 24 May 08;
BEIJING - MR CUI ZHUSONG was left counting what could have been, after selling all his rice just days before a price surge.
He usually sells his stock before February to avoid mould during the rainy season. It was the same again this year. He sold some 80,000kg of unprocessed rice for 1.4 yuan (27 Singapore cents) per kg - right before prices surged to 2 yuan per kg in March.
'I have never seen prices rise so rapidly in such a short time,' the farmer in Inner Mongolia told The Straits Times over the telephone.
The 37-year-old, who has been growing rice for 13 years, made a 'small profit' from his stock, and is determined to grow more rice this year to make the most of the price hike.
He is expecting state farm subsidies of 40 to 50 yuan per mu this year - up from 17 yuan per mu in 2005 - as officials seek to encourage production. One mu is about 670 sq m.
Rice demand is increasingly outstripping supply in a country where farmland is losing ground to economic development, and more people are leaving the countryside for better pay and conditions in the cities.
In addition to doling out subsidies, China has upped state purchase prices for grains, and released supplies from emergency stockpiles in a bid to balance the inequality.
This seems to be working. Officials announced recently that domestic rice supply is stable, though analysts believe more has to be done to cope with the growing structural imbalance caused by issues like demographic changes.
Plateful of policies to ease shortage
Alastair McIndoe, Straits Times 24 May 08;
MANILA - THE top agriculture official in the Philippines recently suggested that fast-food chains serve smaller portions of rice with their burgers and fried chicken to encourage customers to waste less.
In other times, this would have been merely sensible advice. But in these days of surging rice prices and shortage fears, governments across the region, anxious to avoid protests from consumers, are rushing through measures to keep rice supplies flowing and tamp down inflation.
Crackdowns on traders hoarding rice, ration cards, subsidies, raising government stockpiles and pleas for shipments to rice-rich neighbours are just some of the responses from Asian countries which are wholly or partially reliant on rice imports.
The crisis has badly jangled the nerves of the major rice producers, which have reacted with export restrictions to boost their buffer stocks.
Along with several other big rice- producing nations, Vietnam responded with export restrictions, lowering its ceiling on shipments by 500,000 tonnes for this year. Cambodia halted rice exports last month, as did India on non-basmati rice.
Not surprisingly, achieving self-sufficiency in rice production is now on the front burner in several Asian countries.
Malaysia plans to grow rice on a massive scale in Sarawak, turning its largest state into a 'rice bowl' in a RM4 billion (S$1.7 billion) project. Malaysia now produces enough rice to meet 65 to 70 per cent of its domestic demand.
Plans are also under way to subsidise locally grown rice and set up a food stockpile to stabilise prices.
The Philippines is spending an additional S$1.4 billion to boost rice production and become self-sufficient by 2011. A big chunk of the cash will go to loans for rice farmers who modernise their practices.
China is worried that social unrest could break out over rising food prices in the run-up to the Beijing Olympics in August. So its government has raised farm subsidies and released stockpiled rice to boost rice production and supply.
Along with many developing economies in Asia, China's spending on agriculture - as a percentage of total public expenditure - has fallen. It was 6.5 per cent in 2004, down from 10 per cent in 1990, according to the International Rice Research Institute.
Some politicians, unwisely in some cases, have urged their country folk to eat less rice and use other foods.
The food minister in India's southern Kerala state, where rice prices have risen 40per cent over the past 12 months, caused a furore when he told consumers to consume more chicken, eggs and milk instead.
He was not the first politician to make a 'let them eat cake' gaffe over this crisis.
But international concern is mounting over the fallout on Asia's poor from high prices for rice and other staple foods, and its long-term impact on efforts to reduce extreme poverty.
Additional reporting by Chow Kum Hor in Kuala Lumpur, Vince Chong in Beijing, P. Jayaram in New Delhi, Roger Mitton in Vietnam and Nirmal Ghosh in Bangkok
