India's struggle to feed a billion people

Andrew Buncombe
Saturday 12 April 2008 00:00

Vijender Vardhman knows a thing or two about rice. From his small family-run store in south Delhi he sells a remarkable 63 varieties, not to mention a multitude of pulses, grains and packaged goods squeezed tightly on to his shelves.

Over the past six months the price of India's most common staple, basmati rice, has increased by up to 70 per cent and ordinary rice by about 10 per cent. "The basmati rice is now between 80 to 100 rupees [£1-1.25] a kilo," he says.

If Mr Vardhman seemed relaxed as he sat behind his counter yesterday evening, the Indian government is certainly not. With a billion of the three billion or so people who rely on rice every day living within its borders, India was one of the first countries to take measures to protect its domestic supplies by halting exports of all but basmati, which sells at a premium.

India has been a major exporter of rice and its decision has forced other governments in the region to seek alternative supplies as the rice crisis continues.

Indeed, the Philippines-based International Rice Research Institute has said the cost of rice, already at around $1,000 a tonne, will continue to rise as demand outstrips supply. "We have been consuming more than we have been producing and research to increase rice productivity is needed to address this imbalance," it stated.

Of all the countries in Asia where rice is a staple, it is the Philippines that is struggling most to deal with the crisis. As a big importer of rice, the country's government has been desperately trying to secure supplies in a bid to safeguard its stocks.

Last week President Gloria Macapagal-Arroyo was forced to do a deal with Vietnam to buy 1.5 milion tonnes of rice at $708 (£360) a tonne, almost 50 per cent higher than the price in January. She is not the only one resorting to desperate measures in a region where for most people a meal consists of a bowl of rice and where the grain has considerable cultural significance. Cambodia, where food prices have jumped by around 40 per cent in the last year, has also imposed a ban on rice exports while Sri Lanka has been trying to negotiate a deal with the Burmese military authorities to solve a shortfall.

In Bangladesh, a paramilitary group has been given oversight of the rice markets to prevent price rises. In Thailand, where the phrase for "to eat" literally translates as "eat rice", there have been reports that people are hoarding rice, adding to the already increased prices. Stores have set limits on the number of bags they sell to individuals to deter this.

But hoarding is a comparatively minor reason for the dramatic rises of the last year.

Asia's rapid development, with a larger and wealthier middle class consuming more food, has been a big factor. At the same time, land that was once used for rice production was given over to housing development, industry and even golf courses.

Since 2006, an additional reason has been the growth of the biofuels market which has encouraged more farmers to grow corn rather than rice. As a result of all of this, global stocks are at their lowest in two decades.

There have also been local factors. In November, a cyclone in Bangladesh ruined the entire autumn crop of about 800,000 tonnes, forcing the country to import an extra 2.4 million tonnes to avoid famine. In Vietnam, which has also imposed a ban on exports, bad weather and crop-pest infestations have also lowered harvests.

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