The global rice crisis

During the last two or three months, you must have heard your mother commenting angrily or complaining about the high price of rice. The price of rice has been going up and up since January this year. Some varieties of rice went beyond 100 rupees a kilo. Why did the price of rice soar so high in so short a time?

This has happened not only in Sri Lanka. There is a rice crisis worldwide.

The price of any commodity - food fuel or whatever - goes up when that commodity is in short supply; that is when the supply is not enough to meet the demand.

Now, why can’t the rice-producers supply the demand of the rice-buyers? The rice-buyers are the rice-eaters.

The rice-eaters are mainly in Asia; Rice is the staple diet of Asians. The main rice-growers are also in Asia; of the top 10 rice-producing countries, nine are in Asia. They are China, India, Indonesia, Bangladesh, Vietnam, Thailand, Myanmar, the Philippines and Japan.

The only non-Asian in this rice league is Brazil in South America.All rice-growing countries don’t produce enough rice to meet the local demand. So they have to import rice. Sri Lanka is one rice-growing country that has to import rice, even though our harvests have increased from colonial days (when we were a colony of the British Empire). But, so has the population!

The Philippines, one of the top 10 rice-growing countries, was the top importer of rice this year. The country expected to buy 2.2 million metric tonnes, but managed to get only 1.5 million tonnes, because the major producers - India and Vietnam - have restricted exports.

The Philippines was able to buy even this amount at twice the usual price. The government issued cards to heads of households with low incomes, with thumb marks of members, so that they could get the limited government subsidised rice.

In Bangladesh, another top rice-producing country, there was a rice shortage and the price increased by 87 per cent this year due to floods last year. The government asked the people to eat potatoes. This was very sensible advice, because Bangladesh produced five million tonnes of potatoe last year (2007) and expects a bigger harvest this year.

Why is the rice available in the market - the local market and the world market - far below the demand? This is the cause of the present global rice crisis.

Natural disasters

Natural disasters like heavy rains, floods and droughts have destroyed crops and harvests. It happened in Sri Lanka when the “Maha crop” was being harvested.

You would have seen in the newspapers pictures of fields and mounds of harvested paddy under water.

In Bangladesh too, severe floods and a cyclone in 2007 destroyed about three million tonnes of food grain - rice and maize. And now the cyclone in Myanmar! The damage to the rice-fields has not been estimated yet.

When the supply of rice to the world market began to decrease, the big rice-producing countries - India, Vietnam, Cambodia and Thailand - banned the export of rice, Why? To ensure that there is enough rice to feed their own people. This ban increased the shortage in the world market and sent the prices up.

Hoarding

At the first signs of a rice shortage, traders in various countries, including Sri Lanka, began to hoard(store in hiding) rice. They expected prices to go up and up; then they would be able to make a profit by selling at the new price, the rice they bought, at much less. This led to panic buying. People bought more than they needed just in case.

This happened even in Vietnam, the second largest exporter of rice (the first is Thailand). Supermarkets and street stalls in the capital ran out of rice as people, worried by looming shortages, were buying up to 10 kilo bags each and traders were increasing prices as they wished. In a town in the Mekong delta, traders who stockpiled rice, turned away customers and they had bought noodles instead.

Low production

Rice production has gone down for various reasons. The land available for growing paddy is becoming less and less. Fields have become building sites for houses, schools and factories.

Other fields are lying fallow (uncultivated) for lack of farmers. This is very evident in Sri Lanka.

Recently, during a radio discussion of the rice crisis, a listener phoning in from Hali-ela (Badulla district), said youths leaving school with or without O-Levels, don’t want to take up rice cultivation. They turn their backs on the paddy fields their fathers and grandfathers cultivated.

Literacy is the reason for acres of fields lying fallow. In the Gampaha district alone, more than 80 per cent of paddy fields are not cultivated (Gampaha district has a higher literacy rate than the Colombo district).

Other crops

In Australia, many farmers have given up rice cultivation because of frequent droughts. Rice is a crop that needs a great amount of water. So, many farmers, especially those in South Australia have turned their rice fields into vineyards. Growing grapes does not need plenty of water.

In Sri Lanka too, in the North Central Province, where rice has been cultivated for centuries, many farmers have started growing fruit like papaw for which there is a ready market; some have taken to dairy farming. Using rice fields to grow other crops is another cause of the rice shortage. The worst culprit in this global crisis is biofuel. “Anything that burns but is made up of vegetable matter is called biofuel”.

That was how biofuel was defined in a newspaper I read recently.Ethanol is the biofuel that is increasingly used as an alternative to petrol. So, more and more land is being used to grow corn, or maize, which is the raw material for ethanol. America and Canada have increased using maize in large quantities to produce ethanol. In America, one time rice fields are now corn fields.

Even Thailand is producing ethanol using crops grown in Thai soil. The World Bank found fault with Thailand for this. The Thai government told the World Bank that by growing crops for ethanol, the country has not robbed the Thais of their staple. Thailand has enough rice for home consumption and for export.

However, giving up rice cultivation, to grow crops for biofuel is one of the main causes of the global rice crisis.

- Sumana Saparamadu