Thursday, July 10, 2008

World Rice Shortages – Taking India’s Green Revolution to Africa

It’s a quixotic world out there – especially when one takes a closer look at international commodities trade. Thanks to a maze of Economic Partnership Agreements (EPAs), WTO rules, national subsidies, trade blocks and bilateral pacts, massive quantities of food grains rot in western silos while food riots erupt in parts of Asia and Africa. Nothing illustrates this farce better than the rice trade.

Despite being largely self-sufficient in rice, developed countries like Japan end up importing rice from America to maintain some semblance of ‘balance of trade’. 1.5 million tons of high-grade American rice is currently idling in Japanese silos. As long as the Japanese have the money to buy local 'sticky-rice' varieties like Sasanishiki and Koshihikari, they would rather pay over Yen 600/kg (~Rs. 200/kg) than suffer the indignity of eating American rice. And as long as the US-Japan agreement prevents resale of this rice, a lot of it is destined to either rot or be disposed off as animal feed.

Total world rice production is about 646 million tons (2007, IRRI), of which only 6% or 38 mT is traded internationally. About 50% of rice exports come from three countries - Thailand (26%), Vietnam (15%) and India (10%).

This year, a shortage of rice has sent the world markets into a tizzy. A crisis that worsened after India decided to ban exports (non-Basmati rice) in order to build sufficient buffer stocks. How much is sufficient? Food Corporation of India (FCI) has announced plans to raise the rice buffer stock to 27.5mT, i.e., about 70% of recent world rice exports.

If this seems like a huge buffer, consider one point - FCI distributes around 2 mT of rice every month under the national Public Distribution System (PDS). The system is notorious for its inefficiency, corruption and leakages, but it still remains a political hot-potato that nobody wants to touch – let alone the thought of making it more efficient.

Across the Arabian Sea, in Africa, millions of lives depend on rice imports. Despite producing about 14mT (2006, FAOSTAT) it imports about 7mT annually. According to an International Rice Research Institute (IRRI) report - "With only 13% of the world's population, Africa accounts for 32% of world rice imports, which makes it a big player in the international rice”. The report goes on to say, “In 2006, Sub-Saharan Africa (SSA) imported more than 9 million tons of rice worth an estimated $2 billion. With world rice reserves at their lowest level since 1983-84, international rice prices are expected to double in the next couple of years. This is especially alarming for SSA nations, which need to import about 40% of their rice to satisfy local demand."

Africa Rice Center (WARDA) in Benin is one the 15 international agricultural research Centers supported by the Consultative Group on International Agricultural Research (CGIAR). It has been working towards improving the productivity and profitability of rice production in Africa by popularizing a hybrid called NERICA (NEw RIce for AfriCA), a variety that has high yield potential in a short grown cycle. The Center’s website has a long list of international collaborators and India is prominently absent. Having benefited enormously from the Green Revolution, one would have expected India would take on a leading role in teaching Africa how to lead farmers from hybrids to bumper crops.

There was no trace of such generosity in the recently concluded India-Africa Summit (8-9 April 2008), even though Agriculture figures prominently in the joint framework for cooperation. The framework broadly outlines sustainable development of agricultural and animal resources, capacity building, water resources management, disease control and processing/storage technologies. Surprisingly, there is no mention of the ongoing commodities crisis or of any collaboration in rice production.

India has a wealth of experience in rice production. We owe a large part of this to international collaborations that helped us improve our research capabilities, our expertise in breeding and seed production, agricultural extension, use of improved seeds, fertilizer and equipment, as well as post-harvest handling and marketing. It is time we returned the favor and extended our wholehearted support to African countries in their efforts towards self-sufficiency in food grains and reduction of imports.

Setting our own house on order also help. Efficient management of Indian public institutions like FCI and the PDS system would not only reduce wastage but also reduce the necessity of maintaining huge, expensive buffer stocks. Releasing our surplus rice into the international markets would go some way in easing the pressure on those who are worse off than us – especially the countries of Sub Saharan Africa.

There are, of course, no short-term, quick-fix solutions to the problems of food security. While India curries favor with Africa for its natural resources, and trade concessions, it would be helpful to remember what Cervantes noted in Don Quixote - “There's no sauce in the world like hunger”.

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