Rice crisis fuels tensions
Shortages, rising prices for staple sparks fears of civil unrest in some Asian, African nations
April 01, 2008
Keith Bradsher
New York Times
HANOI, Vietnam–Rising prices and a growing fear of scarcity have prompted some of the world's largest rice producers to announce drastic limits on the amount of rice they export.
The price of rice, a staple in the diets of nearly half the world's population, has almost doubled on international markets in the past three months. That has pinched the budgets of millions of poor Asians and raised fears of civil unrest.
Shortages and high prices for all kinds of food have caused tensions and even violence around the world in recent months. Since January, thousands of troops have been deployed in Pakistan to guard trucks carrying wheat and flour. Protests have erupted in Indonesia over soybean shortages, and China has put price controls on cooking oil, grain, meat, milk and eggs.
Food riots have erupted in recent months in Guinea, Mauritania, Mexico, Morocco, Senegal, Uzbekistan and Yemen. But the moves by rice-exporting nations late last week – meant to ensure scarce supplies will meet domestic needs – drove prices on the world market even higher.
This has fed the insecurity of rice-importing nations, already increasingly desperate to secure supplies. Last Tuesday, President Gloria Macapagal Arroyo of the Philippines, afraid of increasing rice scarcity, ordered government investigators to track down on hoarders.
Vietnam's government announced on Friday that it would cut rice exports by nearly a quarter this year. The government hoped that keeping more rice inside the country would hold down prices.
The same day, India effectively banned the export of all but the most expensive grades of rice. Egypt announced that it would impose a six-month ban on rice exports, starting April 1, and Cambodia banned all rice exports except by government agencies.
Governments across Asia and in many rice-consuming countries in Africa have long worried that a steep increase in prices could set off an angry reaction among low-income city dwellers.
"There is definitely the potential for unrest, particularly as the people most affected are the urban poor and they're concentrated, so it's easier for them to organize than it would be for farmers, for example, to organize to protest lower prices," said Nicholas Minot, a senior research fellow at the International Food Policy Research Institute in Washington.
Several factors are contributing to the steep rise in prices. Rising affluence in India and China has increased demand. At the same time, drought and other bad weather have reduced output in Australia and elsewhere. Many rice farmers are turning to more lucrative cash crops, reducing the amount of land devoted to the grain. And urbanization and industrialization have cut into the land devoted to rice cultivation.
In Vietnam, an obscure plant virus has caused annual output to start levelling off; it had increased significantly each year until the last three years.
Until recently, the potential for rapid price swings was muted by the tendency of many governments to hold very large rice stockpiles to ensure food security, said Sushil Pandey, an agricultural economist at the International Rice Research Institute in Manila.
So governments have been drawing them down as world rice consumption has outstripped production for most of the past decade. The relatively small quantities traded across borders, combined with small stockpiles, now mean that prices can move quickly in response to supply disruptions.
http://www.thestar.com/article/407805
