Rice’s Rice

I am sure that the readers are following the debate around the rising food prices and inflation. Rice has become a global discussion point around any table talk, including the United Nations. The matter of rice scarcity and prices has even warranted a special cover story in the Time magazine (”Asia’s Rice Crisis”, issue dated 21 April 2008).

While I am not an economist or a political scientist, it is intriguing to note how politicians and governments, apart from aid agencies and the United Nations, handle the matter under inflationary pressures. Media is no less a culprit, sensationalizing the headlines with unintentional taglines attributed to heads of state.

Stating that due to economic advancement, Indians and Chinese are demanding better nutrition and more food, is the ultimate hogwash one would have heard ! This is notwithstanding the fact that India is a net exporter of rice !! And, to just assume that so far Indians and Chinese have not been eating rice in enough quantities, and the sudden increase in rice prices is due to their urgent demand for more rice, or even better quality rice, is simply ludicrous and does not reflect intelligent analysis of the situation.

No wonder politicians of all ilk are jumping up and down at the United States, and the unfortunate, though largely unintentional statements made by the Secretary of State, Condoleeza Rice, and President George W Bush. But, politics is just politics - not much meat, or rice in it !

One has to scan the horizons towards the east to figure out what is going on really.

Rice prices are going up not because India imposed export taxes on Basmati rice, but more because South East Asian countries, led by Thailand, are entering into a cartel to rake in the benefits of higher demand, much like what OPEC has been doing with increasing oil prices. It is not the right thing to do, but there are few exporters of rice in the world, and Thailand is the biggest of them all. It could set the prices in the market.

Since there is no evidence of rising rice (average median-quality rice) prices in the Indian market, the Government of India could help the world by increasing rice exports without any undue taxes. Rice is the staple food of three-fourths of the world population, and the matter should necessitate an urgent get-together of the world’s rice-consuming countries to demand equitable pricing till the crisis is over. Alternative use of arable land for bio-fuels need to be relooked at. There are many reasons why food prices are rising, and it would not be right for the developed nations to get into fist fights with developing countries on what they perceive to be increased consumption - which anyway, is none of anyone’s business, to start with.

Time to meet, put the intelligent unemotional heads together, and thrash out an amicable solution for the benefit of the masses.

Cheers

Vijay Srinivasan
4th May 2008
Mumbai