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Can Thailand’s Rice Cartel Stop World Hunger?
It seems that the crisis in rice production will start to influence land use patterns across Asia as the Thai government plans a new series of regulation measures to protect its rice-growing regions.
Cambodian Prime Minister Hun Sen said in a speech on 5 April that a rice cartel proposed by Thailand would ensure global food security, rather than increase hunger and poverty as critics say.
| Thailand, the world's biggest rice exporter, is the only shipper that hasn't curbed exports this year as the World Food Program warns of a ‘silent famine’ caused by spiralling food prices. |
Thai Prime Minister Samak Sundaravej announced last week that a meeting of regional leaders had agreed in principle to form what he calls the Organisation of Rice Exporting Countries. Foundation members would be Burma, Laos, Vietnam and Cambodia.
Hun Sen said during a university graduation ceremony in Phnom Penh that the cartel would never try to manipulate markets in the same way as the Organisation of Petroleum Exporting Countries. It would only seek to ensure global food security.
'We will not only ensure food security in each of our own countries, but will help solve regional and global food shortages', he said.
The talks come as officials in Thailand consider ways to increase rice production. With soaring food prices and the rapid expansion of energy crops worldwide, the Agriculture and Cooperatives Ministry is considering re-zoning farmland. New plans would see certain areas set aside for food and others for energy.
Agriculture Minister Somsak Prissananantakul said the cabinet had on 22 April approved the ministry’s proposal to develop a strategic plan to deal with the problem.
Low rice prices over the past decade have forced many farmers to consider growing other crops. At the same time, increasing oil prices have made alternative sources of energy such as bio-fuels more profitable. As a result, farmers worldwide have been switching their fields from food to bio-fuel at a rate much greater than was anticipated by the authorities.
This trend has been made worse by cyclone Nargis. It has devestated the rice growing regions of Burma and may well turn the country into a net importer of rice, at least in the short term.
The result: the price of rice is up. Nigeria and the Philippines, the world's two largest importers of rice, are actively seeking supplies, thereby adding to the problem. Nigeria is looking for 500,000 tons of rice from Thailand, according to the financial news service Bloomberg. The price of rice has risen to a record this year as Vietnam, India and Egypt cut exports to safeguard local supplies.
Rice futures have more than doubled in the past year and touched a record $25.07 on 24 April.
Nigeria, the world's second-largest rice importer, suspended levies on imports of the grain for six months and will invest in farm output to curb rising food prices, according to a 7 May statement from the agriculture ministry there.
Thailand, the world's biggest rice exporter, is the only shipper that hasn't curbed exports this year as the World Food Program warns of a ‘silent famine’ caused by spiralling food prices. India banned overseas shipments to control inflation and Vietnam also limited exports.
The Philippines, the world's biggest rice importer, is in talks with Thailand and Vietnam for long-term contracts that would allow the National Food Authority to buy the staple through government-to-government agreements, possibly eliminating the need for more tenders this year, according to spokesman Tomas Escarez from the National Food Authority in Manila.
Japan offered in a letter to ship 60,000 tons of rice to the Philippines to help the nation boost stockpiles, Escarez said. ‘We're still negotiating the terms of that shipment, whether it will be in the form of a loan or whatever.’
Under the Thai plan, a panel would be established to develop a strategic plan for the management of food crops and also energy crops.
Prissananantakul said Thailand is not facing a food crisis, but it is necessary to ensure that crops will be properly managed and any crisis averted. Thailand has about 208,000 sq km of farm lands. About 10 per cent of this is devoted to energy crops, but this amount is growing rapidly.
To boost yields, the ministry plans to improve land-use efficiency while maintaining the level of energy crops. It is also looking for ways to protect farming areas under threat from expanding industry, real estate and other development. This requires extensive cooperation from all parties involved, including the Interior Ministry, which oversees integrated city planning and designates different areas for different uses, he said.
In addition, the ministry is considering doubling the amount of irrigated land in the country.
Witoon Lianchamroon, a member of the National Social and Economic Advisory Council, said the government has made the right decision in dealing with the food and energy crisis.
However, he doubted the plan would be put into action, considering the unstable political situation which had drained political will. He also urged the government to ensure public participation in the drawing up of the zoning plan.
While supporting plans to increase rice production, senior officials in the Asian Development Bank have blasted the proposal to form a cartel as working against the interests of countries that import rice. 'The plan will increase hunger and poverty,' it said.
Sen has countered the accusation, replying: ‘The formation of the organisation is not meant to strangle the throats of countries that do not have rice.’
The five proposed members of the cartel will discuss the organisation at regional talks in October, Sen said, adding that the Mekong river nations would export 15 million tonnes of rice in 2008 – 10 million will be exported by Thailand alone.
He also echoed Thai leaders in appealing to farmers to grow more rice to profit from the price increases.
