A True One-In-A-Million Story Helps Change The Food Industry Asian Rice Shortage – Philippines Crisis

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Asian Rice Shortage – Philippines Crisis

For two-thirds of the world’s population, rice is a commodity they cannot live without. Although it’s not as nutritious as cheaper alternatives like sweet potatoes, they just have to have their steaming bowl or their day won’t be complete. Moreover, if they fail to find stocked rice on store shelves, the consequences for their governments could be dire. Yes, people will stand in line for long hours to buy rice at any price.

That’s the simple story behind the commodity whose price has risen faster than petroleum over the past 12 months.

Status of Paddy:

Although it is very important to most people, its production is second in the priority list of several countries. The introduction of high value crops and rapidly growing population have forced people to convert agricultural land for residential, industrial and other purposes. As the population grew, so did the demand for land for other purposes such as livestock rearing and biofuels. Profits and immediate needs influence most decisions, people and governments transform rice land to create more value and solve immediate problems. Furthermore, while some countries produce rice cheaper than others, there are those who choose to produce only those products from which they can earn more money and only import products that they can acquire more cheaply. Over the past few years, countries that do not produce enough rice have become dependent on major producers such as Thailand, Vietnam and China.

Fatal error

Relying on other countries to supply rice is based on the assumption that exporters will continue to produce the same amount and supply at the same price. What the importing countries fail to realize is that profit and immediate demand force their traditional suppliers to convert paddy lands for other purposes. In addition, all countries face epidemics from time to time along with short and long supply of rainwater and sunlight. All these have contributed to the current decline in rice production. However, what is perhaps most ominous is the assumption that suppliers will continue to sell their excess production.

When harvests fell in some countries and speculators began playing rice futures, governments such as China, India, Vietnam and Egypt imposed export bans to stabilize their volatile populations and stem rising rice prices in their own markets. Then the real rice crisis.

What began as a simple phenomenon of rising demand and short-anticipated harvests in some countries worsened when economic opportunism, social unrest and institutional hoarding came into play. This led to food riots in some countries and even a change of government in Haiti.

At the moment, rice shortages are still a problem for some countries, especially the Philippines, which needs about 2.2 million metric tons of imported rice for 2008. Looking at that country’s experience, it seems that the solution is not that difficult to achieve. .

A country’s rice shortage can best be seen using a simple supply and demand analysis.

Demand Analysis:

Population and consumption. Filipinos will eat 12.4 million tons of rice this year. Its rice-eating population is estimated to reach 92 million (July 2008), an increase of 31.3 million since 1990. At present, it produces only 90% of its rice demand and imports the remaining amount from neighboring countries.

Population growth. If the country’s population achieved only half of its growth rate since 1990, the country would not have been in deficit during this period. Going further back, some economists estimate that if the country’s population had grown in parallel with Thailand’s, it would have been in surplus by 2008. If the country aims to achieve self-sufficiency, it must control its population growth. If demand outstrips supply, increasing crop yields will not be enough.

Supply situation:

area and irrigation. The Philippines has an estimated 4.2 million hectares of rice land and produces about 11.2 million metric tons (MT) of milled rice, which is only enough for 90% of the population. Out of 4.2 million hectares, only 1.2 million hectares are irrigated and therefore have potential to double yields of about 71%. Irrigation of the land is necessary to overcome the current deficit.

Certified and hybrid seeds. Going further, a survey of farmers’ planting patterns would show that almost half of the country’s paddy fields are still planted with old rice varieties that yield only 2.75 MT/ha. The Philippines has so-called “certified” and “hybrid” seeds that yield 4.7 and 6.5 metric tons/ha, respectively. The country’s supplier of hybrid seeds even claims that the actual average yield of its seeds is actually higher (8~10 MT/ha) and there are even instances of exceptionally high yields reported by some farmers.

Paradigm shift. After growing in old ways, most farmers refuse to use new varieties and adopt better technology. But looking at the figures mentioned above, one can understand that a general paradigm shift is needed to increase the country’s crop and achieve rice sufficiency. Farmers only have to adapt to the changes to increase their yields and increase their earnings.

Post-harvest facilities, farm to marker roads, organic fertilizers etc… Besides using high-yielding seeds and installing more irrigation facilities, the country needs to fine-tune its agricultural system through greater use of organic fertilizers, more efficient post-harvest facilities and farm-to-market roads that will reduce production costs for farmers.

Off shoring production. If the climate like Myanmar decides to play with the agricultural land then the use of improved varieties, fertilizers etc. will be futile. In that country, a monstrous cyclone ravages the land and changes it from a country of sufficient rice to one of scarcity. Following China’s model of buying/leasing large tracts of land in Russia, Africa and South America and planting them with rice will ensure that the country has an alternative source of rice (food) should disaster strike the country.

Subsistence farming. Even in urban forests, people can plant enough food to reduce their dependence on farm products. Bamboo can be cut lengthwise, hung and filled with sufficient soil for vegetable production; Sweet potatoes etc can be planted in earthen pots…

In short, there are many things that can be done to remedy the current rice shortage and the world’s current need for more food. People are lucky that at this point, solutions can still be drawn from the demand or supply side. Let us not wait for the situation to worsen.

Now that the problem has been identified, it’s time to move on.

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