By Heda Bayron Bangkok
10 April 2008
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As rice prices soar toward $1,000 a ton, governments across Asia brace for possible unrest as the region's staple food becomes less affordable and less available. VOA's Heda Bayron examines why prices are soaring and what needs to be done to keep millions from starvation, reporting from the leading rice exporting nation, Thailand.
Fried or steamed, rice is eaten at almost every meal in Asia.
But there could be less rice on the table now, as prices soar and supply shrinks.
In central Bangkok, a rice trader stacks sacks of rice up to the ceiling of his small shop. He says he has increased his prices every week over the past month.
In the Thai countryside, farmers armed with shotguns guard rice fields against thieves.
These days, every grain counts. Governments of rice-importing countries such as the Philippines are scrambling to get their hands on rice even at inflated prices. Rice-producing countries such as Cambodia, Vietnam, India and China have curbed exports, constricting global supply.
Even here in Thailand, Korbsook Iamsuri, the secretary-general of the country's rice exporters association, says finding rice to sell to clients in Africa is difficult because of hoarding.
"It can't be like this forever. It can't be. Somehow it has to correct itself," he said. "Don't forget that we grow twice as much as we need domestically that's why we have so much to export. And all of a sudden everything's gone, so I do not believe that that is the actual situation we're facing."
There are reports of hoarding on both ends of the supply chain. Consumers are stocking up on rice because they fear prices will rise later. And millers and wholesalers are holding on to supplies, hoping to sell later if prices rise even further.
With rice selling at about $1,000 a ton, many fear the staple soon will be beyond the reach of Asia's poorest people. That could cause widespread hunger, push more into poverty and possibly provoke food riots.
Paul Risley, the United Nations World Food Program's spokesman in Asia, says some of the 28 million "poorest of the poor" it feeds could go hungry because the agency cannot afford to buy grain.
"This is a very immediate crisis," Risley said. "In Cambodia, we have been forced to cut back on school distributions. That means Cambodia would go without WFP-supported feedings."
He says it could spell disaster for aid-dependent countries such as Afghanistan and North Korea.
Although hoarding is part of the problem, rice industry experts say the price surge also is the result of Asia's rapid development, climate change, and the low priority given to agriculture.
In the 1970s, the so-called Green Revolution in Asia increased rice production, and kept prices low. But growing rice became unprofitable as fertilizer, irrigation and labor costs rose.
Production also fell as factories, golf courses and housing developments took over rice paddies. In China, land used for rice cultivation decreased by three million hectares from 1997 to 2006.
Recently, the growing biofuels industry has encouraged farmers to plant corn instead. Global rice stocks are at the lowest in two decades.
At the same time, Asia's appetite grew - especially in rapidly developing India and China, where a rising middle class is eating more. On top of that, high oil prices raise the cost of growing rice and shipping it to markets.
And in recent years, pests damaged crops in Vietnam and drought severely reduced rice exports from Australia.
As a result, prices have been gradually rising since 2002. The price of other grains, such as wheat and corn, also rose. But this year, the increase accelerated - rice has doubled in price since January.
Some in the industry say the crisis is waking up Asia to the critical value of agriculture.
Rice exporter Korbsook says it is time for countries to use farmland wisely.
"And I think one way or the other they would have to adjust themselves on self-reliance on food," he said. "So one way or the other they would need to make use of their own land, in order to export the least…. Of course, no one wants to be taken hostage in this kind of thing. Because food you need for everyone in your country, otherwise it would be a big chaos."
The International Rice Research Institute's director-general, Robert Zeigler, calls for a new push to boost crops. The institute is developing high-yield rice varieties and varieties that withstand floods and droughts.
"We need to restart our investment in research and development," he said. "These have lagged for the last 15 years. I think we're paying the price for that neglect."
The institute says high demand will continue as populations rise - Asia will need 38 million tons more rice a year by 2015. Some economists say high prices will, in the end, benefit farmers and encourage others to return to the paddy fields. The Philippines and China are increasing subsidies to rice farmers.
In the next few months, shortages may ease as harvests are completed in the Philippines and Thailand. But it is not clear whether this would be enough to halt skyrocketing prices. Experts warn the era of cheap rice may be over.
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