Michael Richardson, For The Straits Times 30 Nov 09;
ASIA is leading the world economy out of recession. The region's most populous nations - China, India and Indonesia - appear to be doing particularly well, setting the pace for renewed growth in North-east Asia, South Asia and South-east Asia.
Yet amid the buoyancy are some underlying concerns, especially over food security and rice prices. World Bank President Robert Zoellick warned last week that the combination of low interest rates, volatile commodity markets and poor harvests in some parts of Asia could make next year 'another dangerous year for food prices in poor countries'.
On the surface, the outlook for production of rice - Asia's staple food - seems solid enough. Just last month, the United Nations Food and Agriculture Organisation forecast world output of milled rice this year would be 453 million tonnes, the second biggest since 2000.
However, on Nov 10, the United States Department of Agriculture issued a lower forecast, saying that global output for the 2009 to 2010 marketing year was expected to fall by 3 per cent from a year earlier to 438 million tonnes, about five million tonnes less than the minimum needed to meet demand.
Asia produces and consumes about 90 per cent of the world's rice. The amount of rice available and its price help determine progress in reducing poverty, since poor families spend as much as 40 per cent of their income to buy the grain.
Access to affordable rice also underpins social welfare and political stability. The record rice crop of last year helped reduce prices after they jumped to their highest level in 30 years in 2007 to 2008, triggering riots in several countries.
But Asia may be on the verge of another destabilising rice price surge following big weather-related crop losses in India, the Philippines and Australia.
India, which sustains almost 20 per cent of the global population with 3 per cent of the world's crop land, is set to become a net rice importer for the first time in two decades. It may need to buy three million tonnes. The Philippines wants a similar amount. Together, the countries' planned rice purchases for next year amount to over one-fifth of the normal international trade in the grain.
Fortunately, Thailand and Vietnam, the top two rice exporters, have so far been able to meet demand from Asian importers, while Indonesia - the world's third-biggest rice consumer after China and India - has had bumper harvests in the past few years and may be able to export a small amount.
However, as demand for rice outstrips anticipated supply, prices are starting to surge. The grade of rice the Philippines plans to buy jumped to US$465 (S$645) per tonne last week. In the five years to the end of 2007, when the food crisis started, the price of the grade averaged at US$200.
The International Rice Research Institute (IRRI) reckons that the only way to keep rice prices at about US$300 a tonne is to produce more rice, and lots of it.
It estimates that in each of the next 20 years, the world will need an additional eight million to 10 million tonnes of rice annually. Consumption is rising by about 1.5 per cent each year as the population of rice consumers increases.
However, average rice yields - the amount produced per hectare - have been falling. The global rice growing area is at an historic high, but yield has fallen. In the past eight years, nearly half the production increase has been from area expansion rather than productivity growth.
Yet a combination of better technology and farm management could lift rice output. China, the most efficient Asian producer, has an average yield of nearly 61/2 tonnes per hectare, compared to less than four tonnes for the Philippines, India, Thailand and Cambodia.
IRRI helped bring the 'Green Revolution' to Asia from 1970 to 1990, when annual rice yield growth averaged more than 2 per cent.
Now in its 50th year, IRRI is distributing new high-yielding rice varieties with built-in resistance to pests, diseases and the more extreme weather expected to come with climate change, including heat, flooding and drought.
It says that the salt-tolerant variety alone has the potential to lift rice production in the Philippines by up to one million tonnes a year if widely adopted on the 400,000ha of coastal rice growing land affected by salinity from sea water. This would treble the average yield to around three tonnes per hectare.
IRRI, which is based in the Philippines, is also developing rice crop management strategies to make the most efficient use of available land, labour, water and energy. It is identifying ways to cut wastage and reduce post-harvest losses so that more rice reaches markets.
But agricultural extension needs money, as well as cooperation from local communities and governments. With backing from the Singapore Government, IRRI last week launched a US$300 million fund-raising campaign in Singapore.
A major aim is to persuade private sector companies, which provided less than 2 per cent of IRRI's budget this year, to be more generous. After all, a successful rice economy would raise the incomes of a new generation of consumers.
The writer is a visiting senior research fellow at the Institute of Southeast Asian Studies.
