Consumption Pushing the Limits for Rice

By David L. Brown

For many of the world’s people, rice rather than wheat is the “staff of life.” Who can imagine an Asian meal that is not based on this staple grain? About three billion people, or nearly half the world’s population, rely on rice as their staple food.

And like other primary foodstuffs, rice is becoming scarce, pushing prices steadily upward. According to a recent report from BBC.com, the price of the grain has risen by as much as 70% in just the past year, and is expected to keep on rising.

Factors behind the ballooning prices include depletion of stocks; poor weather conditions such as flooding and extreme cold; hoarding; rising demand as some Asian standards of living increase; and curbs on exports that are being imposed by some nations that fear running out of the staple grain.

The following bar chart shows the tight race between supply and demand for rice in major Asian nations. As you can see, only Thailand and Vietnam produce significantly more than they consume. Bangladesh, Indonesia and the Philippines consume more than they produce and most other nations are running close to the bone.

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There are already some serious repercussions from the increasing scarcity and higher prices of rice and it seems likely that the problems will continue to get worse. The following snapshots are extracted from a survey by BBC.com. You can read the full report here.

INDIA —India is the second largest rice grower in the world behind China. With rice the staple food for 65% of the country’s one billion plus people, much is consumed domestically.

But the International Rice Research Institute says that the sustainability of rice farming in India and beyond is threatened by overuse of fertilisers and soil health.

Stocks have come down over the last three years as agricultural growth has failed to match the rest of the economy.

And because of the low purchasing power of India’s poor, even a small increase in prices can cause a sharp fall in real incomes.

BANGLADESH — Spiralling rice prices have left the people of Bangladesh facing their worst food shortages since the major famine of 1974.

Over the last year, prices have nearly doubled to about 35 taka (50 cents), while there has been no corresponding increase in wages.

Hundreds of poor families are now surviving on one meal a day, and spending 70-80% of their budget on food. The problem is most acute in urban areas where aid agencies say they are very concerned about infant malnourishment.

PHILIPPINES — Once self-sufficient in rice, the Philippines is listed by the US Department of Agriculture as the world’s top importer of milled rice for 2007, ahead of Nigeria, Indonesia and Bangladesh.

Over the past 20 years or so, the country lost nearly half of its irrigated land to rapid urban development.

Domestic demand has risen as the population has grown, pushing up prices.
President Gloria Arroyo has asked authorities to crack down on hoarders. Officials have said they could be charged with economic sabotage – a crime that carries a life sentence.

CHINA — Chinese consumers have been have been eating less rice as their income has risen, according to the [UN Food and Agriculture Organization].

Instead, they have been switching to meat and dairy products.

But the government, highly conscious of social or political tensions caused by food inflation, has moved to protect consumers by restricting exports.

JAPAN — Instead of importing rice, Japan heavily subsidises its rice farmers, paying them as much as four times the market price and restricting imports.

This policy is defended by a farming community with considerable political weight, and many Japanese agree home-grown rice tastes best.

Food security is seen as politically important and the country keeps a large stockpile of rice – even though it is probably wealthy enough to buy on the international market even if prices continue to rise.

As we have discussed at length here on Star Phoenix Base, the world is entering a phase of growing food shortages and rising prices in general. That means that there will not be much leeway for replacing rice with other grains such as wheat or corn. The costs of those commodities have also been rising as demand outstrips supply and only the wealthier nations will be able to replace rice with other grains. In the case of China, switching from a rice-based diet to one more dependent on meat and dairy products will even further exacerbate the problem, since the livestock consume feed grains that also are in diminishing supply.

I should not even have to mention the evil practice here in the U.S., Europe and elsewhere of converting food to fake gasoline. We have covered that subject in depth here and will continue to do so. In due time this will be looked back upon with the kind of horror associated with the Holocaust.

I have made the point in previous essays that increased prices for basic staple foods have an extremely harsh impact on the very poorest among humanity. That point is well demonstrated by the example mentioned above of Bangladesh, where rice prices have nearly doubled in a year and many families are eating only one meal a day while spending up to 80% of their income for food. These people are living on the edge of a cliff and are about to be pushed over the edge.

There are no practical solutions to the emerging famine in the Third World. Money used to be the universal lubricant, but it cannot help if there is too little food to go around. Cheap government-subsidized crops used as food aid in the past are no longer in the pipeline.

Meanwhile, the world’s population continues to climb — but for how much longer? Not, I suspect, for too many years or even months as the human race lurches into the great Overshoot-and-Collapse event that is looming in our future.

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