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HONG KONG: Rationing, subsidies, price-fixing cartels, export
curbs—you name it, governments across the world are trying it out
as they seek to shield their populations from the soaring prices of
rice.
In the Philippines, one of the world’s biggest
rice importers, President Gloria Arroyo has ordered steps to prevent
hoarding and price gouging, and to ensure supplies.
Wary of the political risk of millions of hungry
people on their doorstep, some governments—notably in Asia—are
adopting new policies, or shifting their old ones, to ease the
supply crunch.
But there appears to be no magic
one-size-fits-all formula, partly because of national factors and
partly because of the nature of the market.
“In Asia, most rice import and export is
carried out by countries rather than by companies,” according to
Jonathan Pincus, chief economist for the UN Development Program in
Vietnam.
“Producing countries are restricting exports
because they’re concerned about the domestic market,” he told
Agence France-Presse. That in turn “means things just get tougher
for consuming countries, which have to pay higher and higher
prices.”
The Philippine response
The Philippines has now become more circumspect
in dealing with the rice crisis, as it signed last Friday an
agreement with the International Rice Research Institute (IRRI) to
boost domestic rice production through technology development and
transfer, and extension work and training of farmers.
Filipino agriculture officials said the country
expects to attain rice self-sufficiency by 2010 or 2011, but will
remain import-dependent for 10 percent of its rice supply in the
next few years.
The country’s rice production shortage has hit
poor households the most. Because of this, President Arroyo has put
into place a rationing system for government-subsidized rice through
the use of access cards for the poor. Fortunately, food riots have
been averted, and there are even calls from government to supplement
or supplant the eating of rice with root crops, white corn, and
yams.
The Philippines will also impose tighter control
on the provision of government-subsidized rice to make sure the
country’s poor do not go hungry, Social Welfare Secretary
Esperanza Cabral said on Saturday.
The government will pull out subsidized rice
from public markets in the middle of May with the full
implementation of the family access card system, said Cabral.
Cabral told local radio the supply of National
Food Authority (NFA) rice, which sells for P18.25 per kilogram, will
only be available in the agency’s distribution outlets and
parishes.
Cabral said the NFA will also set up 1,000
rolling stores in slum communities, where millions of poor people
live.
A survey covering more than 12 million people
living in Metro Manila is being conducted to determine who are
qualified to receive government subsidized rice access card.
But a plan by four Asian countries to form a
rice price-fixing and -export cartel, called the Organization of
Rice-Exporting Countries, was questioned by Sen. Manuel Roxas 2nd,
who said the Association of Southeast Asian Nations must meet to
thoroughly discuss the matter, and determine if it is to the best
interests of the bloc’s member-nations.
Last week, Thailand said it had agreed in
principle to form the cartel—similar to the oil industry’s
Organization of Petroleum-Exporting Countries—with neighbors
Cambodia, Laos and Myanmar as well as Vietnam.
Thailand still top exporter
Thailand, the world’s top rice exporter which
last year shipped around 9.5 million tons overseas, insists it has
no plans to curb supplies.
It has said it will gradually sell off its 2.1
million tons of stockpiled rice at 20 percent below current prices
to relieve shortages.
In contrast, Vietnam, the world’s
second-biggest rice exporter, has reduced this year’s cap on
exports from four million to 3.5 million tons to secure domestic
supplies and reduce prices fueling double-digit inflation.
Hanoi has also banned new export contracts until
the end of June, although existing contracts—including shipments
to the Philippines at record prices of $1,200 per ton—are being
honored.
Cambodia in late March banned rice exports to
ease pressure on the domestic market after prices reached nearly a
dollar a kilo, deepening poverty in a nation where one-third of the
population lives on less than 50 cents a day.
But Prime Minister Hun Sen said last week that
the Cambodian government was mulling exporting rice again, to find
markets—and revenue—for its farmers.
India has banned export of non-basmati rice and
last month withdrew export incentives relating to premium basmati,
although existing contracts are being honored, notably to needy
countries such as Bangladesh and Sierra Leone.
Brazil, which consumes virtually all of the 11
million tons it produces every year, did hint at an export ban but
decided against it, preferring instead to urge producers to be
cautious about supplies.
Worries even in US, Japan
Even in the United States, worries about
supplies have seen panic-buying in some stores, and two big chains,
Costco and Sam’s Club, took measures last week to ration sales due
to price hikes and uncertain deliveries.
The UN’s Pincus said the price of rice was
more volatile than that of maize and wheat as much less of it is
traded.
“Rice is mostly consumed in the countries
where it’s produced, and for that reason the world market is very
thin. There are not a lot of buyers and not a lot of sellers,” he
said.
Japan, which imports more than half its food,
wants to raise the issue of spiraling food prices when it hosts the
Group of Eight summit in July.
Still, it heavily protects its own rice
industry—the government strictly controls the production and price
of rice and imposes high taxes on exports—and instead of curbing
shipments has been trying to step up exports.
The government sells subsidized rice in poor
neighborhoods and is crafting a new scheme of rationing.
There is no rationing in Indonesia except where
the government operates a subsidy scheme for the poor, which allows
15.5 million registered families to purchase 10 to 20 kilos of rice
a month at a third of the normal price.
Bangladesh, which does not export rice due to
its own needs, does not plan rationing. But the government is
selling subsidized rice to help low-income families as many poor
people have been forced to go without meals.
-- AFP
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