Saturday, March 29, 2008

Price of Rice Doubles on World Markets, Undermining Asian Stability


Rice is a basic food staple for nearly half the world's population. The world's two most populous nations, China and India, depend heavily on the grain for basic sustenance, and for economic stability. The price of rice has doulbed in the last 3 months, causing concern about potential for conflict along Asian border regions.

The Philippine president has ordered government agents to investigate potential "hoarders", seeking to either cash in on rising prices or protect themselves against the instability that could result from prolonged scarcity. The causes of this scarcity are complex, tied to environmental trends, rapidly expanding population, elevated living standards, poor water-use planning and the loss of arable land.

The New York Times is reporting that
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 over the last two days — meant to ensure scarce supplies will meet domestic needs — drove prices on the world market even higher this week.

Even agricultural powerhouses like the United States may find themselves impacted by the price increase. The US is already facing down impending recession, and prices have been exploding in food, healthcare and transport, while the overall economy slows to zero growth.

But poor nations with chronic food scarcity will likely be hardest hit. Asia's major rice exporters are limiting or freezing exports, putting rice-poor importers at risk of severe scarcity. Many African nations are struggling with issues of agricultural productivity or economic instability, and cannot easily afford to replace vanishing imports with locally produced grains.

One potential stress on populous Asian nations, which also harbor some of the world's poorest communities, is the risk of mass migration. Failure to generate a sustainable flow of basic food, entire communities can be forced to flee their homes in search of survival. In any environment, this is a stress on local economies; when scarcity is a regional or even global problem, weak economies or political structures can collapse.

OneWorld reports that the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) has found, in its most recent report that "Due to absence of rural infrastructure, incomplete land reforms and limited alternative income generating activities, agriculture productivity has declined", and that an agricultural "revolution" is needed to reverse trends that have impoverished 218 million people.

2 comments:

sadashivan said...

Food grain shortage may have many reasons but two main reasons we are not taking into consideration. They are excessive urban growth and pruning agricultural lands and agriculture as non profitable business any more. One of the richest states (KERALA) in India has turned as consumer state rather than producing. 25 years back it produced rice and sold to other states now as the land converted to urban and houses has resulted shortage of agricultural land the main culprit for this issue is non profitable business. This situation will further aggravate if state government does step up for immediate action.

Similar situation is now with entire world, demand is more and production is less due to imbalanced economic policies. More attention is given to urban economic growth than the rural research and development. A day will come when a slogan or will find ad “Buy one kg of rice and get a laptops free” as computers and other electronic products will be much cheaper. Economic growth has to be balanced considering social condition of the country. Banning exports of essential items is only temporary solution to overcome present situation but for future food grain shortage will further aggravate as
• Global warming (even excessive urbanization has role to warm our globe). Excessive human population, Excessive concrete buildings - industries, carbon fuel based transportations heat up environment to reduce moisture in land results shortage and uncertain rain, river shrinkage, draught, shortage of water and so on.
• 25 years back there was more agricultural land than of today many of them converted to more and more housing and industrial lands; whereas population growing fast, feeding will become challenge to most countries even developed countries will not escape. Nature’s priority is water, food and then shelter. Economic and scientific growth need to be first based on human needs.
• Urban related economic growth thrusts agricultural land conversion to cities and building to accommodate urban population and industries. Over 20% of farm lands of developing countries have been converted to cities and buildings for the past decades and Over 50% of farmlands of villages (close to cities) got merged with cities.
• Non profitable food grain production (international organization and appropriate governments shall have to reconsider bring back agricultural subsidies). Also make agriculture more profitable by linking customer and farmers by way of direct procurement by large stores, and other agencies so mediators and brokers are kept away. There are many reasons for high cost of production of food grain but as food comes in highest priority WTO and the Governments need to reconsider bringing back subsidies or other incentives to farmers as is the only solution to make agriculture more profitable to farmers. Present situation is such that farmers get more profit selling their land to builders than farming.
• Escalation of essential food prices by “futures” trading helps hording so less and less mediators between producer and final customer. Present system of trading agricultural goods only helps middlemen from wholesalers to brokers. Their financial power helps them hold back stock to create artificial shortage.
• Irrigation and water shortage (In fact water crisis is there but in some states and countries water is excessive causing disaster or consumed by sea. If scientists of missiles or warplanes work on how river water reaches sea after consumed by entire world, would convert desert land to fertile land).
http://www.sadashivan.com/quotpovertyquotasubject/index.html

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