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RICE TRADE
| "The struggle of the 'East'
versus the 'West' in Asia is in part a race for production, and rice is the symbol and
substance of it." – Foreign Affairs, 1953 |
Ric
Economics
Here's some food for thought. The US has just 0.79 per cent
of the world's rice land under cultivation and with that it controls 12.7 per cent of the
rice exports. With more and more patents going to American multinationals, that figure
could rise dramatically in the next couple of decades.
US Foreign Policy and Rice
Hybrids and genetically modified rice crops have transformed
the entire rice industry of the developing world in the second half of the twentieth
century. While the debate rages on whether that has contributed to the overall good of the
region, it is interesting to study the linkage between US post-war foreign policy and
rice. The book Rice Science and Development Politics explains this in detail.
When America looked to the developing world after the Second World War, it was
concerned with two issues. The first was economics. It sought new frontier markets and
came to the conclusion that it wouldn't get good trading partners unless the issue of food
security was sorted out. The second was ideology. The US was scared that
"unstable" nations would lean towards communism.
So in the fifties, rice production was put at the centre of an American strategy to
address food insecurity and political unrest. The Rockefeller and Ford foundations
patronised the International Rice Research Institute, which in turn led to the Green
Revolution and dramatic rise in the production of rice (and wheat).
In Myanmar, people eat half a kilogram of rice a DAY |
Chemicals and Credit
However, traditional practices that had been practiced for
centuries were thrown out unceremoniously. In came rice varieties that required high
inputs of pesticides and fertilizers, for which farmers had to rely on credit. It has also
replaced diversity with uniformity and transformed farmers into mere farm workers.
| "Henry Saragih, an
Indonesian delegate to the World Social Forum in 2001, cited the example of low rice
prices (the result of imports of the grain from the United States), which are devastating
the rice farmers in his country. The same dynamic affects European farmers, who face
bankruptcy from a system that favours only the big farms, said Egidio Brunetto, a leader of
Brazil’s Movimento dos Sem Terra’ (landless movement) underscoring their common
struggle worldwide." |
All the "miracle" rice varieties produce little
in the absence of liberal doses of chemical fertilisers and costly pesticides. And today
they dominate the market.
Extensive use of pesticides has also led to contamination
of agricultural land and groundwater all across in developing countries.
Capturing The Seed
Market
Interestingly, the commercial rice seed market is the only rice market where Asia doesn't
dominate, accounting for less than a quarter of the $32 billion market. But there are
other issues involved.
Multinational seed corporations all run rice programmes in a bid to dominate and expand
the seed market. Hybrids power seed markets. Most of these do not reproduce and so force
farmers to purchase new seeds every season. Rice, however, is a self-pollinating crop,
making hybrid rice seed production costly and difficult, and nearly all rice in Asia is
still grown with farmer-saved seed. The seed industry believes that the combination of
genetic engineering and patents can overcome this hurdle.
Through patents and contractual agreements, seed companies will seek to prohibit
farmers from sharing or saving seed, control what pesticides are used and even assert
ownership rights over the harvest.
High Price. Low Price
America and India handle their rice markets very
differently. While the US pampers its farmers and pushes the rice price as up as it can to
maximise its profits, India penalises its marketeers if they don’t keep the rice
price down so that the poor can afford it.That illustrates the rich-poor country divide
in rice. Wealthier countries use a combination of domestic market interventions and border
protection or export subsidies depending on whether they are importers or exporters.
In contrast, poor developing countries in Asia tax rice producers, with domestic prices
often less than three-fourths of world prices. Domestic controls are aplenty and diverse.
Most of these countries have some form of price support system. These support prices are
almost always below the international prices.
(Rice Trade Liberalisation and Poverty, Gulati and Narayanan, EPW) |
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US fear of communism
and instability |
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Foreign policy changes |
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Concern on food
security issues |
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Formation of
Interna-tional Rice Research Institute |
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Green Revolution |
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Boom in
Pesticide, Herbicide, Fertiliser industry |
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| The average European eats about 3 kgs of
rice a YEAR |
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