Rice now too costly to give
away By Marwaan Macan-Markar
BANGKOK - Soaring global rice prices are
hitting the stomachs of Asia's poorest citizens.
The people of East Timor, where nearly 40% live on
less than 0.55 US cents a day, have just been told
they may not receive their annual quota of food
aid.
"We have been forced to provide less
food to East Timor; provide less rice than we
intended to," Paul Risely, Asia spokesperson for
the United Nations food agency, told Inter Press
Service (IPS). "We have requested the people of
East Timor to look for local substitutes."
Part of the problem stems from poor
planning with the Dili government urging the World
Food Program (WFP) to step in only after finding
that it could not afford to purchase sufficient
quantities of the grain from
Vietnam, due to high prices.
"Any chance
to reduce high malnutrition rate is severely
curtailed," added Risley of a country that suffers
from chronic malnutrition, where some 46% of the
children are stunted and 42% of children below
five years are underweight. Currently, the WFP has
pledged to feed one in five people in East Timor
which has a population of 1.1 million people.
Vietnam, the world's second largest
exporter of rice, shipping out nearly 4.5 million
tons of the grain annually, has been a major
supplier of rice for the WFP's global program.
Neighboring Thailand is the largest rice exporter,
shipping 9.5 million tons to the global market,
which was 30 million tons in 2007.
But
last year, Vietnam placed limits on rice exports
in order to meet domestic demand, triggering a
spike in the price of its grain in the world
market. The ban stemmed from national food
security concerns in the communist-ruled country.
Hanoi wanted to avoid a local food shortage due to
flooding in the rice-growing central regions.
Yet, such a weather-related feature, which
some are attributing to climate change, was only
one reason to push global rice prices to new
heights. Another trigger includes the steady rise
in oil prices, making fertilizer more expensive,
pushing the cost of harvesting up, and increasing
the cost of transporting the grain.
A
weakening US dollar has also been singled out as a
reason, in addition to demand from the
increasingly affluent China for more food to feed
its population. In 2007, China marked a shift away
from being a net exporter of rice and wheat,
raising the export taxes on the grains to keep
local produce at home. In the meantime, import
tariffs were removed for easier access to the two
staples from the world market.
And the
prospect of early relief for the world's poor for
cheaper rice this year appears remote. "It is very
likely that the price of rice will drop this year.
The prices will not stabilize until the end of
2008," says Sumiter Broca, policy officer at the
Food and Agriculture Organization's (FAO) Asia and
Pacific regional office, based in Bangkok.
But the price of rice, which rose by 40%
last year, is not an exception. "This time around,
all other commodity prices have also risen, like
cereals, vegetable oils, meat, sugar and bananas,"
added Broca in an interview. "It is part of a
natural long-term trend, but this time the peak is
worrying. There is no reason for any let up in
this price increase in the future."
The
current rise in rice prices began in 2002,
following a six-year downward trend. Yet at the
same time, rice stocks today are "at an all time
low; the lowest in 20 years", says Broca of a
grain whose major producers are Bangladesh, China
and India. The world's total rice output reached
420 million tons during the 2007-08 harvest
season, with the end of season stocks being 102
million ton for the same period, down by 1% from
the 2006-07 harvest.
This means that in
Asia, the world's largest rice-growing region,
rice production is "increasing very slowly, [with]
rice production in 2007 [being] only 0.5% higher
than in 2006", states the FAO. "A major underlying
reason for this is that yield growth is
plateauing."
Land, too, is limited to
increase rice cultivation to meet new demand for
the grain from Africa, Latin America and the
Middle East. And as China's rice story reveals,
land that was once allocated for rice has been
taken away from farmers to meet the country's
other economic needs. China's rice growing area
saw a three-million-hectare loss during a decade,
beginning in 1996, because of "economic pressure",
states the latest issue of the Rice Today
magazine.
"Although there may be some
potential for expansion of rice area in other
countries, the total area in Asia will unlikely
increase much beyond the current estimate of 136
million hectare," writes Sushil Pandey, of the
International Rice Research Institute (IRRI), in
the magazine. "Rice production is facing
increasing competition for land, labor and water
from other economic activities and the recent
growth in biofuel production is likely to exert
additional pressure."
Consequently,
organizations like the IRRI, based in the
Philippines town of Los Banos, are making a push
for a repeat of the Green Revolution (1968-81),
during which high yield varieties of rice were
distributed to increase rice output by 42% over a
13-year period. "A second Green Revolution to
reverse the rising trend in rice prices and to
keep process low is needed now as much as the
first Green Revolution was needed earlier to avoid
famine and mass starvation," Pandey argues.
Yet activists who work with local farming
communities are not impressed with such a call.
"We are cautious about such solutions, because
hybrid rice depends on a lot of water and is only
grown in irrigated areas. This isolates the other
farmers," says Neth Dano, a research associate at
Third World Network, a Penang-based think-tank.
"There has also been much hype about GE
[genetically engineered] rice for the last 10
years, but we have not seen a good product."
A better route, she told IPS, is for
governments to increase investments for local
farmers to produce better rice yields.
"Governments are not doing this; these farmers are
neglected financially. It is these farmers that
best know the rice varieties that need to be
produced now.''
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