Disquiet over the soaring rice price

Rice and politics in Asia

Empty bowls, stomachs and pockets

Mar 26th 2008 | BANGKOK
From Economist.com

Disquiet over the soaring rice price

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THE soaring price of rice and dwindling stockpiles of Asia’s staple food are causing anxiety across the continent. In particular the Philippines, a big, hungry country which cannot grow enough to feed itself, could be in trouble. The front pages of Manila’s newspapers scream about a “rice crisis”, as politicians float drastic solutions, such as forcing the country’s top 100 companies to take up rice farming. Farmers in Thailand, the world’s largest rice exporter, are delighted with the price surge, although some were this week said to be hiring guards to protect their valuable crops against “rice bandits”.

The president of the Philippines, Gloria Macapagal Arroyo, last month pleaded publicly with neighbouring Vietnam, the second-largest exporter, to guarantee supplies. The two countries signed an agreement on Wednesday March 26th apparently to do just that. But the various escape clauses that Vietnam insisted upon suggest it was more of a face-saving measure than a firm pledge. Vietnam and India, another big rice exporter, have recently announced export restrictions to try to curb soaring food prices at home. This will make it tough for poor, rice-importing countries, in Africa as well as Asia, to secure supplies.

Until a few years ago, rising harvests were meeting the growth in rice demand caused by Asia’s success in cutting poverty and its booming population. However recent wobbles in rice production have reversed a long-term trend of falling prices. They have also left the world’s stockpiles at their lowest since the 1970s. The rising cost of food in general is now pushing millions back into the poverty from which they only recently escaped.

Political consequences may follow. Mrs Arroyo came to office in a “people-power” revolt in 2001 and her grip on power is tenuous. Spreading hunger could be just the rallying-point the opposition needs to bring Filipinos on to the streets. So Mrs Arroyo is straining to be seen doing something: posing for photos at state grain warehouses and promising a crackdown on the widespread fiddling of subsidised rice supplies.

Indonesia’s president, Susilo Bambang Yudhoyono, had hitherto been expected to sail to re-election next year. But, again, costly food and resurgent poverty may endanger him. That Mr Yudhoyono made a show of completing a doctorate in agricultural economics during his 2004 election campaign only increases his potential for embarrassment. He has tinkered with, not abolished, Indonesia’s economically nonsensical restrictions on rice imports. These, like the Philippines’ rice import tariffs, were intended to protect poor rice farmers when prices were low but hurt the larger numbers of poor rice eaters. As elsewhere, attempts to manage food prices through trade restrictions have backfired.

This week one of Mr Yudhoyono’s officials said Indonesia had now reached its goal of becoming self-sufficient in rice. However, maintaining it may be another thing: the Philippines briefly achieved self-sufficiency in the 1980s but despite big increases in the acreage of its paddies since then, it has remained in deficit.

Geography and climate affect countries’ ability to grow rice. And so does the competence of government. The extreme example is Myanmar. Once it was the world’s biggest rice exporter and it still produces a small national surplus. Yet many of its people go hungry because its dictatorship is as incompetent as it is brutal.

Robert Zeigler of the International Rice Research Institute, one of the driving forces behind Asia’s 1960s “green revolution” in farming, says that governments are now reaping the results of years of neglecting agricultural research, irrigation and other means to aid farmers. They have lost much prime land, water supplies and labour in the rush to industrialise.

Reducing the huge disparities in productivity, even between identical fields in a given district, could solve Asia’s rice worries for decades to come. That would require, for instance, ensuring farmers can buy higher-quality seeds, which in turn would require more funding from governments for old-fashioned things such as cross-breeding of existing strains of rice. The region needs a new green revolution, especially if it wants to avoid revolutions of the blood-stained variety.