The Changing Economics and Politics of Rice: Implications for Food Security, Globalization and Environmental Sustainability

The Changing Economics and Politics of Rice: Implications for Food Security, Globalization, and Environmental Sustainability Joachim von Braun Director General, IFPRI World Rice Research Conference Tokyo, Japan, November 4, 2004

Overview 1. The global context of rice 2. Consumption patterns of rice 3. Rice production and technology 4. Political economy of rice, markets and trade 5. Future scenarios for rice: Towards 2050 6. Concluding ideas and way forward

The role of rice at a crossroad Cultural roots, poverty, locale tastes and production Globalization, new science, new tastes

Main questions What patterns of rice demand in the future? What future of rice technology? Why is rice not very affected by globalization and will this remain so? What future role of government and private sector in the rice systems?

Rice and Food Security Percentage of calories from rice in diet 1970 1980 1990 2001 Asia 38 36 35 31 South America 11 11 12 11 Africa 5 7 7 8 United States 1 1 2 2 European Union 1 1 1 2 World 20 19 21 21 Source: World Rice Statistics, IRRI (September 2004)

Changing demand for rice 1. At higher incomes:  people diversify diet away from rice,  shift towards higher quality of rice. 2. Population growth increases the demand for rice, 3. Growing urbanization lowers demand for rice 4. Prices matter for the poor

“Favorable Abundance Infinitely”, Chee Wang Ng

Rice and poverty  Rice consumption and production are closely linked to poverty  Rice as agent of change to get out of poverty  Rice is the main staple food of the poor  Rice is a major source of income and employment for rural people, especially in Asia  Rice is healthy, but can become more so: bio- fortified rice to improve the quality of the diet of the poor

Rice research reduces poverty India China Number of Reduction Number of Reduction poor reduced as a % of poor reduced as a % of from rice total poor from rice total poor research (%) research (%) (million) (million) 1991 4.9 2.1 5.2 5.5 1999 3.1 1.9 1.5 4.5 Source: Fan et al. IFPRI 2003

Photo by Kyaw Swar Tun, Myanmar (IYR Photo Contest)

Production and world price trends 280 White Broken Rice, Thai A1 420,000 Super, f.o.b Bangkok 260 Production (milled) 400,000 240 220 380,000 200 360,000 180 160 340,000 140 320,000 120 100 300,000 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 Source: USDA PS&D Database (2004); and FAO Commodities and Trade Division (2004)

Distribution of rice ecosystems 100% 80% 60% 40% 20% Deepwater 0% Upland Rainfed lowland li a ia ld a A e a ric op ric US or As a str Irrigated e W Af r Eu Am Au tin La Source: World Rice Statistics, IRRI (September 2004)

Environmental Issues  Water use efficiency of irrigated rice is low, requiring large amounts of water  Pesticides and fertilizer, loss of biodiversity, pests, depletion of natural soil fertility  Complex interactions with climate change and land use

Yield patterns and developments  The potential to increase yield in rainfed ecosystems is still vast (positive impact on poorest farmers in low income countries)  Important scientific breakthroughs have enabled less favored areas to improve productivity (e.g. IRRI’s drought tolerant varieties, hybrid rice in China, and NERICA in Africa)

Rice: multiple functions of a strategic commodity in a difficult market  Due to its importance in the diet of the poor and main source of income for farmers  Rice markets are thin, concentrated, volatile: Governments intervene to avoid instability  Historically, policies maintained stable prices for consumers in urban areas and subsidize farmers

Rise of the private sector  Activities traditionally carried put by government are increasingly being transferred to the private sector, e.g. stockholding  International trade activities are moving towards private traders,  The influence of large state trading companies is diminishing

Rice export price, 1983-2004 (Thailand) 400 350 300 250 US$/Ton 200 150 100 50 0 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 White Rice, Thai 100% B second grade, f.o.b. Bangkok

New support policies for rice in developing countries Producer Support Estimates % 1992 2002 India -25 +40 Indonesia +11 +46 Viet Nam -11 +32 Sources: Mullen, Gulati, and Orden (2004); Thomas and Orden (2004) and Sun (2003) at IFPRI

Scenario analysis for alternative policy developments 1. Progressive Policy Actions Scenario: New Focus on Agricultural Growth and Rural Development 2. Policy Failure Scenario: Trade and Political Conflict, rise in protectionism worldwide 3. Technology and Resource Management Failure Scenario: Adverse technology/natural resource interactions

World rice demand scenarios 590,000 550,000 ('000 mt, milled rice) 510,000 470,000 430,000 390,000 350,000 1997 2015 2030 2050 Progressive Policy Actions Policy Failure Technology and Resource Management Failure Source: IFPRI IMPACT projections (September 2004)

Rice yield scenarios 5,000 4,000 Kg/ha 3,000 2,000 1997 2015 2030 2050 Progressive Policy Actions Policy Failure T echnology and Resource Management Failure Source: IFPRI IMPACT projections (September 2004)

Scenarios of world price of rice 600 500 400 U$S/t 300 200 100 0 1997 2015 2030 2050 Progressive Policy Actions Policy Failure Technology and Resource Management Failure Source: IFPRI IMPACT projections (September 2004)

Sharon Oliver United Kingdom , IYR Photo Contest

PERCENTAGE of children malnourished Percentage of malnourished Progressive Policy Actions 35 Policy Failure Technology and Resource Management Failure 30 children 25 20 15 10 1997 2015 2030 2050

Conclusions 1. Rice continues to be crucial for food and nutrition security. 2. Feeding the growing population requires increased yields. Sustainable rice production requires new technology 3. There is an international moral responsibility of high income countries with advanced rice science to share that with poorer nations

Conclusions 4. The need for efficiency in globalization. Rice policies shift towards less government intervention 5. Rice remains an agent of change in societal and economic development. Rice- culture has modernized but certainly not vanished. Rice: a factor of healthy sustainability in globalization.

“The Great Laughter”, Chee Wang Ng

The Changing Economics and Politics of Rice: Implications for Food Security, Globalization and Environmental Sustainability

0 comments

Notes on slide 1

2 Groups