Asia Sentinel
Rice Shortage: Crisis or Hype?
JET DAMAZO
29 May 2008
The world’s rice crisis seems to have come and gone
Whatever happened to the rice crisis? In April, reports of a global food crisis and exorbitant spikes in food prices hogged headlines after major-rice exporting countries announced export restrictions and importing countries — the Philippines in particular — scrambled to secure rice supplies from neighboring countries.
Just a month later, however, prices have begun to fall, the export ban has been lifted in Cambodia and both Vietnam and India, two other rice-exporting nations, have suggested they may lift restrictions as well amid a growing realization by governments that there is no immediate rice shortage after all. The price fell Wednesday to the lowest in more than two months and has fallen by nearly 30 percent. Mentions of rice shortage in the news now have the words “alleged” and “perceived” attached to them — but not before the global panic over rice supplies caused prices to shoot up to around $1,000 per metric ton in the global market.
The leader of the world’s largest rice importer, President Gloria Macapagal Arroyo, is now being attacked by critics for actions that would otherwise have been praised if the shortage had been real—raising farm gate prices to encourage local farmers to produce more rice, jailing rice hoarders and promoting alternative staples like sweet potatoes to her rice-consuming constituents — saying these led to more hoarding and pushed prices higher. The Philippines, it turns out, has 54 days of rice stocks on hand, nearly double China’s.
“The price increase was induced by hype,” claims Rosario Bella Guzman, executive editor of local think tank IBON Foundation, after local rice prices increased by over 20 percent over the first quarter of the year—from P23.31 (US 53¢) per kilo of regular milled rice in January to P29.70 in April.
A memo from the country’s agriculture department to the office of the president in February, she says, said that the government needed to import 2.4 million metric tons of rice because of increasing global prices and tightening supply growth, even though the projected shortfall was only around 1.4 million metric tons. “The Philippines was panic buying at exorbitant rates,” she adds. “The excess would only end up in private warehouses.”
So was the rice shortage real or perceived? Adam Barclay, a spokesperson for the International Rice Research Institute (IRRI), based in the Philippines, maintains that the real underlying cause of the rice price increase is the long-term imbalance between demand and supply, which has gradually pushed up prices since 2001.
“The long-term demand and supply imbalance implies that we have been consuming more than what we have been producing. This gap between demand and supply was met by depleting rice stocks which are now down to a 20-year low,” Barclay said. “This rise in price accelerated towards the end of 2007 as traditional exporting countries such as India and Vietnam imposed export restrictions.”
The problem was exacerbated by the disastrous results of Cyclone Nargis in Burma, which virtually destroyed the rice production capability of the Irrawaddy River Delta. Burma, which had contracted to sell 600,000 tonnes of rice to Sri Lanka and Bangladesh, was suddenly turned into a net importer, needing about 500,000 tonnes, according to the Food and Agriculture Organization. In addition, North Korea appears to be headed into serious famine and faces a shortfall of as much as a million tonnes of grains, not necessarily rice, although the country’s problems can be expected to cut into other world grain stocks, which are in increasingly short supply.
In addition, according to the just-released OECD-FAO Agricultural Outlook for 2008 through 2017, “the overall trend of rising output masks an expected fall in (planted area) due to rivalry with other crops and nonagricultural sectors for land.” Rice is also expected to gain importance in African diets, where consumption per capita is expected to rise by about 10 percent annually over the next decade
But Barclay acknowledged that the combination of export restrictions from some countries and the need for imports from other countries, including speculations and panicked reactions following the ban in rice exports, did contribute to the sudden spike in rice price in March-April this year.
“Other factors include the rapid rise in price of oil (which has raised the cost of fertilizer, irrigation and transport) and pest and weather problems in several key rice-growing areas (for example pest problems in Vietnam, floods in Bangladesh, and drought in the Philippines and Australia),” Barclay added. “The convergence of these problems with several longer-term trends, such as population growth, economic growth and shifting diets in India and China, the increasing popularity of rice in Africa, and a leveling off of productivity growth prompted the rapid price rises.”
Food security expert Mohiuddin Alamgir, former director for policy and planning at the International Fund for Agricultural Development and currently a consultant with the Asian Development Bank, also agrees that the country’s actions, along with speculative commodities traders and opportunistic rice traders, contributed to the spike in prices.
"There is a structural gap in the country’s supply and demand of rice, which is why the Philippines is now the world’s largest importer of rice. The world knows this and so the country’s actions will always impact the market,” Alamgir explained, adding that the manner in which the government came into the market can be debated, as it may have sent the wrong signal. But, he says, had it not been for Arroyo’s actions, the country would have been in a worse situation, prices today would have been much higher, and lines at the government’s subsidized rice stores would have been longer.
“The country’s problem was that it did not plan properly,” he adds. “But people are hurting and they would have hurt more had it not been for the actions taken. Food security is as important as national security, and so governments have to make sure people have food.”
http://www.bangkokpost.com/250508_News/25May2008_news10.php
Rice farmers dig in over foreigners' land
Opposition mounts to Saudi venture
By Sunthorn Pongpao & Thai News Agency
The Thai Farmers Association called on concerned agencies yesterday to look into land occupation by foreign businessmen, which has made many of the country's rice farmers landless. ''Vast areas of farmland in the western and northeastern provinces have fallen into the hands of Taiwanese businessmen, while investors from the United States have also bought a number of plots in the fruit-growing province of Phetchabun,'' said association member Wichian Phuanglamchiak.
''Widespread land acquisitions by these foreign landlords has already made a good number of rice farmers landless, forcing them to rent the same land for rice growing from foreigners,'' he said.
His call came in the wake of an alleged plan to support Saudi Arabian businessmen keen on putting their money in rice farming and setting up a joint rice export venture.
The plan has drawn fierce protests from paddy farmers, who fear they will soon end up being landless farmers if foreigners are not stopped from buying more rice growing areas.
The association said yesterday it would write to Prime Minister Samak Sundaravej, asking him to scrap the plan.
The plan is reportedly the brainchild of deposed prime minister Thaksin Shinawatra, who took a group of Saudi businessmen on a tour of a rice production centre in the Buffalo Village of Chart Thai party secretary-general Prapat Pothasuthon in Suphan Buri on Wednesday.
Agriculture and Cooperatives Minister Somsak Prissananantakul, from the Chart Thai party, also opposes the plan, saying the idea was ''tantamount to selling the nation''.
But Mr Somsak yesterday denied the remark had anything to do with Mr Thaksin.
''I have to apologise to Mr Thaksin if he feels he's been dragged into the dispute for no apparent reason, which might cause him damage,'' said Mr Somsak in Chiang Mai, the hometown of Mr Thaksin.
Chart Thai leader Banharn Silpa-archa said yesterday that Mr Somsak's harsh comment could have resulted from some misunderstandings.
Mr Banharn said Mr Thaksin phoned him before Wednesday's trip, saying he only wanted to show foreigners how rice farming is done in Thailand, and how the sector could be further developed with the help of modern agricultural technology.
Mr Prapat's interview had misled the public into believing that foreign investors were being encouraged by Mr Thaksin to buy up all the paddy fields, he said.
Mr Thaksin's spokesman Pongthep Thepkanjana defended Mr Thaksin yesterday by saying that the former prime minister only wanted to do things he thinks will benefit the nation.
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At 08:14 PM -0700 05/25/08, Betsy R. Cramer wrote:
It's sad but it's an international issue: few people want to live on a farm in this internet globalized world. I think it is a universal belief that working with one's hands, farming, is inferior to getting an education and a well-paying job in the/a city. That old song, How You Gonna Keep 'Em Down On The Farm After They've Seen Paree?, would apply to Thailand, except maybe it could be rewritten to say, How You Gonna Keep 'Em Down On The Farm After They've Travelled Online and Seen the World Wide Web? It's the ever-present downside of education...... And to get that education and the perceived benefits costs $, and the only capital most have is their land.
At 08:16 AM -0700 05/26/08, Mac Bakewell wrote:
Yes, exactly, except that the families in our hardly atypical village who have either sold or mortgaged their land were influenced more by television, which they've had access to since the arrival of electricity in 1980, than by the Internet, which few adults in rural Thailand have ever seen. Whatever the influence, the families I know who have recently sold or mortgaged their land have reinvested the proceeds in diesel pickups rather than education.
A car is the ultimate status symbol in Thailand and, because of the way vehicles are taxed, diesel pickups are the most affordable option. Trouble is, land is so cheap and vehicles so expensive that the sale or mortgage of a typical family farm yields only enough for a down payment on a $20- $30-thousand Toyota, Nissan, or Isuzu. Thanks in part to a cultural disinclination toward maintenance, this purchase typically leaves the extended family in debt over a shiny new toy that will have depreciated to near zero long before the loan is paid off.
Still, urban migration does seem inevitable. The young people who, with or without education, have already moved to the cities send money home to sustain their parents who are raising the grandchildren in the village. (The long-term social ramifications of these abridged-extended families remain to be seen.) Very few of the young people who have moved away are doing well enough in the cities to enjoy being separated from the social fabric of the village, but many of those who can afford to do so have begun investing in better schooling for their own kids.
Thus rural brain-drain is already a reality, and I'm not sure where this is going to end up. Some farmers, like the outside investors, are astute enough to recognize that agriculture is a potentially profitable enterprise. If such farsighted folks can devise ways to inspire their communities to pool their resources, and to persuade their educated sons and daughters to stay on, then they might not have to watch their villages devolve into company towns.
That hasn't happened in many places in the USA, and it is unlikely that it will in Thailand. Rural poverty is a common factor in both countries, but in terms of cooperative communities some Thai villages come pretty close to the Amish model, which has proven remarkably competitive with corporate farming in the USA.
Washington Post
Women Rise in Rwanda's Economic Revival
By Anthony Faiola
Washington Post Staff Writer
Friday, May 16, 2008; A01
MARABA, Rwanda -- Sun-kissed plantations ring this village, renowned in recent years for growing the rich arabica beans brewed and served in some of the world's finest coffee houses. But the secret to success here has had far less to do with the idyllic climate and volcanic soil than with a group of people who have emerged as Maraba's -- and Rwanda's -- most potent economic force: women.
In the 14 years since the genocide, when 800,000 people died during three months of violence, this country has become perhaps the world's leading example of how empowering women can fundamentally transform post-conflict economies and fight the cycle of poverty. That is particularly clear here in Maraba, a southern village where a host of women -- largely relegated to backbreaking field work in the days before the genocide -- found unwanted opportunity in the fertile lands they would inherit from slaughtered husbands, fathers and brothers.
As both female and male survivors sought to rebuild coffee plantations with financial and technical assistance from international organizations, Maraba's women, most trying their hands at the business of farming for the first time, were by far the faster students. They showed more willingness than men, officials here said, to embrace new techniques aimed at improving quality and profit. Now, Maraba's female farmers are outdoing their male counterparts in both, numbering about half of all farmers in the village's coffee cooperative but producing 90 percent of its finest quality beans for export.
The march of female entrepreneurialism, playing out here and across Rwanda in industries from agribusiness to tourism, has proved to be a windfall for efforts to rebuild the nation and fight poverty. Women more than men invest profits in the family, renovate homes, improve nutrition, increase savings rates and spend on children's education, officials here said.
It speaks to a seismic shift in gender economics in Rwanda's post-genocide society, one that is altering the way younger generations of males view their mothers and sisters while offering a powerful lesson for other developing nations struggling to rebuild from the ashes of conflict.
"Rwanda's economy has risen up from the genocide and prospered greatly on the backs of our women," said Agnes Matilda Kalibata, minister of state in charge of agriculture. "Bringing women out of the home and fields has been essential to our rebuilding. In that process, Rwanda has changed forever. . . . We are becoming a nation that understands that there are huge financial benefits to equality."
Where Men Failed
In the central highlands town of Masaka, the road to female prosperity runs through a path of male shame.
The main drag -- a red earthen way -- winds through a number of tiny mud huts, passing first by the home of Ildiphonse Muhayimana, a builder whose yet-to-be installed iron roofing was seized by village elders this year not long after he defaulted on a $110 bank loan. "He spent the money on women and liquor," said his loan officer, Abed Muhawenimana. Further down the way, teacher Enock Muvunji met a similar fate, his bike seized last month until he repays a $277 loan.
Yet venture up the road, and you reach the door of Jeanine Mukandayisenga. The 29-year-old wife of a disabled army officer and mother of two took out a $50 microloan in 2005 with a plan to support her family. Her pitch: Few people in her neighborhood owned cellphones -- so she would buy one and charge a few cents per call. She paid back the loan within a year. Last year, she took out a $400 loan to open a graining mill for cassava flour. Her businesses are earning the family a relatively princely sum of $650 a month.
Officials at Vision Finance, the microloan arm of World Vision International that launched a program in 2005 in this town of 40,000, said that while women make up the majority of borrowers, four out of five defaulters are men.
"They say that women care more about the family, but I do not know if that is true," Mukandayisenga said. "I think it has more to do with the self-control woman show in hard times. We know how to survive when men despair."
Wise Investors
Perhaps it should come as no surprise that women have been key in reconstructing Rwanda. In the effort to finance the reduction of poverty in the developing world, many leading experts said that women simply make better investments.
The evidence has been building for years. In 1990, a major study on poverty in Brazil published in the Journal of Human Resources showed that the effect of money managed by women in poor households was 20 times more likely to be spent on improving conditions in the home than money managed by men.
In Bangladesh, the Grameen Bank founded by 2006 Nobel Peace Prize winner Muhammad Yunus has focused its poverty-busting microloans on women, with success rates far higher for female than for male borrowers. Microloan programs in Africa, Asia and Latin America have shown similar results.
In India's great economic transformation of the past 15 years, states that have the highest percentage of women in the labor force have grown the fastest as well as had the largest reductions in poverty, according to the World Bank.
"We have overwhelming evidence from almost all the developing regions of the world that [investment in] women make better economics," said Winnie Byanyima, director of the United Nations Development Program's gender team.
Born of Tragedy
For the worst of reasons, Rwanda became a testing ground for such theories after the 1994 genocide.
The slaughter of ethnic Tutsis and moderate Hutus by Hutu militias, and the ensuing retributions, left Rwanda with a population that was 60 percent female and 40 percent male by the time the dead were buried. With thousands more men jailed for war crimes or living as refugees in neighboring Congo, women, at first by default, took on roles in business and politics. Although women had long enjoyed a relatively higher social status in Rwanda than in some other African nations, women here still had weak property rights, and female entrepreneurs were rare.
That would change rapidly -- particularly in agriculture, where many women were forced to take over farms. They found an ally in the barrage of foreign organizations that rushed into Rwanda following the genocide, with much of their focus aimed at training women.
As important was an acceptance at the highest levels of government that women would need new legal status to help rebuild the nation. By 1999, reforms were passed enabling women to inherit property -- something that would prove vitally important to female farmers. At the same time, woman began rising to higher ranks of political power. Today women hold about 48 percent of the seats in Rwanda's parliament, the highest percentage in the world. They also account for 36 percent of President Paul Kagame's cabinet, holding the top jobs in the ministries of commerce, agriculture, infrastructure, foreign affairs and information.
Success in economics mirrored the rise of women in politics. Today, 41 percent of Rwandan businesses are owned by women -- compared for instance with 18 percent in Congo. Rwanda has the second-highest ratio of female entrepreneurs in Africa, behind Ghana with 44 percent, according to the World Bank.
At the same time, Rwanda has engineered a surprisingly fast economic recovery. After falling into devastation in 1994, with many farms and businesses abandoned, damaged or destroyed, Rwanda's economy has since tripled in size and has grown at an average rate of 6 percent since 2004. Though the population is balancing out -- women edge men by a rate of 52 to 48 -- women make up 55 percent of the workforce, according to Commerce Minister Monique Nsanzabaganwa.
The ranks of female entrepreneurs were aided in part by returnees, largely from Uganda and the United States. Joy Ndungutse, 51, returned in the 1990s after working for years as a secretary in Washington. "We came back to a country destroyed," said Ndungutse, who since her return has built the largest nonagricultural export business in Rwanda. Her firm sells finely woven baskets to Macy's. Like many exporters here, she has been greatly aided by a trade agreement that allows her exports to enter the United States duty-free.
"Women are being given an opportunity in this country to change their status," she said, "and they are taking it."
From Survival to Success
For most women here, success in business was the unforeseen byproduct of their fight for survival in the face of unspeakable loss.
In the madness of the genocide, when ethnic hatreds boiled over into mass violence, Jeanette Nyirabaganwa, a minority Tutsi, escaped with her family, fleeing their home in Maraba where her family had cultivated coffee for years. They joined dozens of others who sought refuge in a schoolyard. When Hutu soldiers came, joined by some of her Hutu neighbors, they entered the yard firing machine guns, using machetes to hack those who remained alive. She watched as her husband was killed by bullets, her infant son and 2-year-old daughter hacked to death by blades. She survived by pretending to be dead.
"After two days I woke up," Nyirabaganwa, 39, said. "Birds were eating my dead children. This was too much for me. I wanted to be killed . . . I felt as if I was dead, too. I did not want to go on."
But she did. When the violence passed, and a Tutsi-dominated administration came to power, she returned to the jade hills of Maraba to take charge of four orphaned nephews and nieces. For the first few years, they survived with U.N. assistance. By the late 1990s, she had begun to visit her husband's old coffee plantation and her father's coffee farm, both of which had reverted to her after they died.
The farms were in disrepair, but she began her business by picking a few ripe beans off the trees and selling them to traders in town. "I knew nothing about growing or business," she said. "My job was to pick weeds between the coffee plants; women did not get involved in money or business. It was not done."
Like many women, she joined a coffee cooperative organized with the help of international nonprofit organizations and aid agencies in 1999. By 2001, USAID was offering extensive training to farmers. Rather than emphasize quantity, as farmers had for generations here, a new push was made to improve quality and prices by growing less but better coffee and using fertilizers.
Coffee-washing stations were established to impose strict quality control, sorting beans by grades and disposing of the poorest crops. Tasting laboratories -- staffed largely by women, who scientists say have more taste buds than men -- added to the quality. The best of Café de Maraba's production has become hugely popular among fair-trade coffee distributors in the United States and Europe, with exports growing from 20 tons in 2002 to an estimated 80 tons in 2008.
Theophile Biziyaremye, Café de Maraba executive director, said that male coffee growers in the cooperative have been too set in their ways. "They keep saying, 'We've done it our way all our lives, our fathers and grandfathers have done it this way, so why should I change and use your way to grow coffee now?' " he said. "The women are different. They have not done it before, so they are adapting and growing the better-quality coffee. That also means they are making more money than the men."
Nyirabaganwa is proof. Now employing eight laborers, she is growing three times as much coffee as her father and husband did. They sold their poorer-quality beans for local consumption. Her finer grade is largely for export, roasted overseas and sold in coffee shops and specialty stores in cities including London, New York, Chicago and New Orleans.
"I'm proud of this," Nyirabaganwa said. "I would never have thought I would be in a situation like this. I never thought I could come back."
Her total family income is roughly five times what it was then, income she has used to improve family life. Two years ago, she renovated the family home, still a modest space of plain cement walls, to make it more sturdy. She bought cellular phones for her four charges, all of whom see their aunt as a role model.
"I think that now, boys and girls are different than they were," said Eric Muhire, a junior in high school. "Today, woman are in business; before, if a woman had some money, she would have to give it to the man. They could not compete against a man. But now, they are competing and doing better."
Perhaps more important for Nyirabaganwa, a woman who was only educated through primary school, is that Donatelia Mukampe Ta, 18 and her oldest female charge, is set to graduate from high school this year. Nyirabaganwa has promised to pay for her higher education in the capital, Kigali, where Ta hopes to become an accountant.
By Western standards, women still have a long way to go in Rwanda. Many of the women in Maraba who have husbands are culturally expected to ask their permission before engaging in any form of business. But some of these women who have inherited land from genocide victims have been able to use income from farming or renting that land to gain a measure of financial independence.
When Gemina Mukashyaka, 30, who cleans the coffee-tasting laboratory in Maraba, insisted that she pay for the schooling of her younger sister after their parents were killed in the genocide, her husband balked. She ignored his protests, paying with money she gained from leasing the land she inherited from her parents.
"My husband is not happy about my paying for my sister, but it is my money," she said. "The law in Rwanda now says that woman have that right. I will not let him stop me."