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Southeast Asia: Rice and food price crisis

Prices of rice and other basic food items are increasing in the world. The global food price crisis is affecting millions, possibly billions of people. Food policies are challenged. Governments are imposing emergency measures to calm down their restless constituents. The Southeast Asian region, home to several emerging and developing economies, is also struggling to cope with the situation.

For want of a better title more or less sums up the problem in the region:

“The biggest problem with our rising rice prices is that it’s more a distribution error than a problem with the rice yields. It’s more about politics than it is about agriculture…What’s probably going to happen though is an even higher rise in rice prices. The thing about a necessary product is that when price goes up, people buy more. And since they’re spending more on rice, they’ll spend less on the things that accompany that rice.”

Even Singapore, one of Asia's richest countries, is now scrambling to offer cheap food prices as reported by Singapore News Alternative.

Rice exporting nations are also gripped with panic. Thanh Nien cites that “Rice fever runs hot in several Vietnam provinces.” Details are Sketchy is worried because nearly half a million kids in Cambodia are expected to start missing meals in the coming weeks as a result of the rising cost of rice.

Vuthasurf describes the mood in Phnom Penh:

“The rice price is remarkably increasing in Phnom Penh. Phnom Penh residents have been buying and stocking rice. All type of rice price is increasing too fast and making Cambodian people worried. The price of rice is going up across the nation by more than 20 percent, comparing to the previous year. Rising the rice price is helping the farmers but it is hitting badly the poor such as garment workers, teachers, civil servants who have low-income.”

But Cambodia’s government is optimistic that rice production will improve. Im Sokthy explains:

“Cambodia has about two million hectare of land for rice production. Its existing irrigation system can cover 30 percent of the land. It can expand to three million hectares for rice production. Adding to this, Cambodia could cultivate about two to three times per year on the same land areas. Based on this, it is seen that Cambodia has huge potential to become the world's largest rice exporting country.”

Youthful Insight notes the anomaly in policymaking in Indonesia, which may be applicable as well to other countries:

“On one side the government must keep inflation and food price low enough so its does not hurt the poor. But on the other side the government must maintain a reasonable high price to give incentive to farmers to increase their production and increase rural welfare. Is there any policy to achieve both objectives above? Yes! Give high subsidy to the farmers like what the developed countries are doing. But the problem is our government does not have the money to do it.

“Cheap food price is good for poor urban, whose main sources of income are the service and manufacturing sectors. But bad for rural poor whose main source of income is agriculture sector. Lower food price means lower income and also lower welfare for rural area. The government sacrifices the rural for the sake of the urban. Why? Because urban poor is more attractive politically than rural poor.”

New Mandala mentions the ongoing debate in Thailand about the extent to which farmers will benefit from high rice prices. Thailand Crisis is surprised to hear the Thai Prime Minister exhorting the people to eat less so that Thailand can export more rice.

The Malaysian quotes a politician who is asking the Malaysian government to stop the space mission program so that the money can be used to develop Sabah as a food producing state.

Filipino journalist Ricky Carandang points to another reason for the rising food prices:

“Yes, there are real supply and demand factors driving up rice prices, but one must concede that a big chunk of the increases in the prices of oil, gold, and rice, are due to speculation on the international commodities markets.”

Lengua et Pluma blames the economic policies of the Philippine president:

“The government is quick to blame the traders, when it hides on the background its policies that pave the way for cartel operations and the declining rice production in the country. This crisis that has brought about the overdependence on the importation of food, and an agriculture that is geared mainly towards the production of raw materials for export, has put on the forefront the long-running problems that beset our agriculture and farmers –lack of irrigation, lack of subsidy on the production of our farmers, land use and crop conversion, and the monopoly of land by a few land owners and transnational corporations, to name a few.”

Local Freakonomics hopes the Brunei government will continue subsidizing the price of basic food items:

“While I don’t expect the government to subsidize all food but I do expect some food price subsidies/food security packages are being planned for Brunei’s staple food (in addition to rice and sugar) such as cooking oil, flour, milk, eggs, chicken.”

Related article: Southeast Asia and rising price of rice

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