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	<title>Rice Shortage</title>
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	<description>The Problem We Faced!</description>
	<pubDate>Wed, 09 Jul 2008 09:48:28 +0000</pubDate>
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		<title>Stop Hoarding Rice - It Only Harms You</title>
		<link>http://rice-shortage.com/riceproblems/4</link>
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		<pubDate>Wed, 09 Jul 2008 09:48:28 +0000</pubDate>
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		<category><![CDATA[Rice Shortage]]></category>

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Despite being the world&#8217;s biggest rice importer country, Philippines is not spared from the price hike in rice too.
But this crisis is not all it seems. As what Agriculture Secretary Arthur Yap told BBC, &#8220;There&#8217;s no shortage&#8230;the problem is not with supplies, but with price.&#8221;
&#8220;And when you consider that 80% of our population spends [...]]]></description>
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<p>Despite being the world&#8217;s biggest rice importer country, Philippines is not spared from the price hike in rice too.</p>
<p>But this crisis is not all it seems. As what Agriculture Secretary Arthur Yap told BBC, &#8220;There&#8217;s no shortage&#8230;the problem is not with supplies, but with price.&#8221;</p>
<p>&#8220;And when you consider that 80% of our population spends 60% of their income on food, and 40% of that is on rice, it is very serious.&#8221;</p>
<p>By hoarding rice, consumers are actually pushing the price of rice even higher due to the increase in speculative demand. Furthermore, unscrupulous suppliers will also make use of this crisis to profit even more.</p>
<p><span style="text-decoration: underline;">Why do people want to hoard rice?</span></p>
<p>For ordinary households, consumers hoard rice for two reasons.</p>
<ol>
<li>To ensure there is no shortage of rice in the household.</li>
<li>To avoid impending price hikes in rice.</li>
</ol>
<p>In short, consumers hoard rice for the perceived sense of food security. And yes, there will be so-called &#8220;food security&#8221; for these people in the short run. However, how will these people be affected in the long run? A demand &amp; supply analysis is used to illustrate the long-run effects.</p>
<p><span style="text-decoration: underline;">Demand-side argument</span></p>
<p>Out of fear for impending price rises in the future, consumers make a decision to buy more rice than they need. As a result, the rice market oversees a rise in speculative demand for rice from the consumers. This means that quantity of rice demanded is not equal to quantity of rice actually consumed.</p>
<p>Due to the increase in speculative demand, total quantity demanded for rice increases. As a result, to maximise profits producers will increase price for rice sold. Hence, price of rice increases because of an increase in speculative demand from the consumers.</p>
<p><span style="text-decoration: underline;">Supply-side argument</span></p>
<p>To cope with the increase in quantity demanded for rice, producers will have to increase quantity of rice sold. There are two ways it can do this:</p>
<ol>
<li>Draw from existing rice stockpiles/reserves and sell the surplus.</li>
<li>Increase rice production.</li>
</ol>
<p>Regardless of which measure producers choose to adopt, they will still increase the price of rice. Why?</p>
<p>Most varieties of rice require an average time of 3-6 months to grow before it can be harvested. The increase in opportunity cost for growing more rice (i.e. the time could have been used to grow other food crops, the additional labour used for harvesting more rice etc.) will justify the producers in increasing the price of rice further when it sells the new harvest.</p>
<p>If producers were to draw from existing rice stockpiles, technically they do not need to produce more rice, but then the cost of hiring labour to deliver rice from the storage warehouses to the market will still give producers an incentive to increase price to minimise their operating costs.</p>
<p><span style="text-decoration: underline;">Conclusion</span></p>
<p>Thus, the two arguments prove that hoarding rice will only result in price hikes in the future. Thus, hoarding of rice should be discouraged as it only discourages social equity and harms the society in the long run.</p>
<p>The consumers who hoarded rice in the past won&#8217;t be spared from the price hike too. Given the fact that brown rice can only be stored for 6 months in average conditions, and the common occurrences of natural pests such as rice weevils, consumers should not expect their own stockpile of rice to last long.</p>
<p><span style="text-decoration: underline;">What the individual can do instead</span></p>
<p>Here are some pointers to what you can do instead, to prepare yourself for the impending price hike:</p>
<ol>
<li>Gradually reduce and ration your rice intake.</li>
<li>Start eating alternatives in greater portions during meals, such as potatoes or cereals.</li>
<li>Take the initiative and upgrade your work skills, so that you have more income and can cope better with the price hikes.</li>
</ol>
<p><span style="text-decoration: underline;">The aftermath</span></p>
<p><span style="text-decoration: underline;"> </span></p>
<p>Many people have the misconception that the current price hike is due to a dominant fall in supply of rice. However, few realised that the current price hike of rice also highlights the vast income inequality in the population that many nations faced.</p>
<p>According to statistics from The Thailand Rice Exporters Association, production of rice has been increasing all this while. For instance, milled production in 2004-2005 was 400,475,000 MT, while production in 2006-2007 was 418,235,000 MT. This proves that there were no hitches in rice supply.</p>
<p>The main reason why there is a so-called shortage of rice is because rate of increase in demand is exceeding rate of increase in supply at an alarming rate (note : not quantity, but rate of increase in quantity), and thus this has led to market speculation which results in price hikes all over the world.</p>
<p>As a result, no matter how much rice is supplied, there will always be &#8220;rice shortage&#8221; because the poor can&#8217;t afford to buy rice. As long as price remains at the current inflated level, the lives of the poor won&#8217;t get better.</p>
<p>Thus, this means that since consumers can&#8217;t change the way rice is priced, they can do the next best alternative; to try and increase their income instead. This will mean upgrading their existing working skills so as to supplement their current income.</p>
<p>Until the situation improves, otherwise it does not seem that the man on the street can do anything much, but to grit through their teeth and continue to plough on in life.</p>
<p><span style="text-decoration: underline;">Summary</span></p>
<ol>
<li>Hoarding rice is an ineffective way to cope with the current price hikes.</li>
</ol>
<ol>
<li>Do not listen to market speculations and fear, because they are the essential factor now that is prompting an even greater price hike.</li>
</ol>
<p><span style="text-decoration: underline;">Sources:</span></p>
<p>http://solutions.irri.org/</p>
<p>http://news.bbc.co.uk/1/hi/business/7342161.stm</p>
<p>http://www.riceexporters.or.th/world%20rice%20prod_cons_ends.htm</p>
</div>
<div id="sig" class="sig">
<p>Article by Yeo Teck Wei, who is a freelance writer based in Singapore. If you liked what you just read, pls take some time to browse through my other articles too.</p>
<div>
<p>Article Source: http://EzineArticles.com/</p>
</div>
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		<title>Asian Rice Shortage - Philippines Crisis</title>
		<link>http://rice-shortage.com/riceproblems/3</link>
		<comments>http://rice-shortage.com/riceproblems/3#comments</comments>
		<pubDate>Wed, 09 Jul 2008 09:44:53 +0000</pubDate>
		<dc:creator>admin</dc:creator>
		
		<category><![CDATA[Rice Shortage]]></category>

		<guid isPermaLink="false">http://rice-shortage.com/?p=3</guid>
		<description><![CDATA[[#3: Edit Options>MightyAdsense>Adsense Code] 
For two-thirds of the world&#8217;s population, rice is a commodity that they simply cannot live without. Notwithstanding the fact that it is not as nutritious as the cheaper substitutes like sweet potato, they simply have to have their steaming bowls or their day will not be complete. Moreover, should they fail [...]]]></description>
			<content:encoded><![CDATA[<div id="body">
<p>For two-thirds of the world&#8217;s population, rice is a commodity that they simply cannot live without. Notwithstanding the fact that it is not as nutritious as the cheaper substitutes like sweet potato, they simply have to have their steaming bowls or their day will not be complete. Moreover, should they fail to find rice stocked in store shelves, the consequence can be dire for the their government. Yes, people will fall in line for long hours, just to buy rice, at whatever price.</p>
<p>That is the simple story behind the commodity whose price within the last 12 months, rose more rapidly than petroleum&#8217;s.</p>
<p><strong>Rice Situation:</strong></p>
<p>Despite it being very important for most people, its production has taken a second row in the priority list of a number of countries. The introduction of higher valued crops and the rapidly growing population has compelled people to convert farmlands for residential, industrial and other purposes. As the population grew, the demand for land for other purposes like cattle farming and bio fuels for instance, also increased. With profit and immediate necessity influencing most decisions, people and governments converted rice lands in order to create more value and resolve immediate issues. Moreover, with some countries producing rice at costs cheaper than others do, there are those who simply opted to produce products that they can make more money from and simply import goods that they can acquired more cheaply. For the past several years, countries that do not produce sufficient rice have become dependent from major producers like Thailand, Vietnam and China.</p>
<p><strong>Fatal Flaws</strong></p>
<p>Relying on other countries for the supply of rice was based upon the assumption that the exporters will continue to produce the same volumes and continue to supply it, and at the same price. What the importing countries failed to realize is the fact that profit and immediate needs also necessitates their traditional suppliers to convert rice lands for other purposes. In addition, the under and over supply of rainwater and sunlight as well as pestilence are encountered by all countries from time to time. All of that contributed to the present decline in rice production. However, what is probably most fatal is the assumption that suppliers will continue to sell their excess production.</p>
<p>When harvests in some countries fell and speculators started playing with rice futures, governments like that of China, India, Vietnam and Egypt imposed export restrictions in order to assure their restless population and arrest the rising rice prices in their own markets. That is when the real rice shortage happened.</p>
<p>What started as a simple case of increasing demand and lower than expected harvests in some countries worsened when economic opportunism, social unrest and institutionalized hoarding came into play. This resulted to food riots in some countries and even a change of government in Haiti.</p>
<p>At this point, rice shortage is still a problem for some countries, especially for the Philippines, which requires about 2.2 million metric tons of imported rice for 2008. Looking at that country&#8217;s experience, it seems that the solution is still not that difficult to attain.</p>
<p>The rice shortage in the country can be best viewed using a simple supply and demand analysis.</p>
<p><strong>Demand Analysis:</strong></p>
<p><strong>Population &amp; Consumption.</strong> The Filipinos will consume 12.4 million tons of rice this year. Its rice eating population is estimated to reach 92 million (July 2008), a growth of 31.3 million from 1990. At this point, it produces only 90% of the rice demand and imports the remaining quantity from neighboring countries.</p>
<p><strong>Population Growth.</strong> Had the country&#8217;s population attained only half of its growth rate from 1990, the country would not have been in deficit by this time. Going further back, some economists estimate that had the country&#8217;s population simply grown parallel to Thailand&#8217;s, it would have been in surplus by 2008. If the country aims to reach sufficiency, it needs to control its population growth. No amount of increase in harvest will be sufficient if the demand will keep on outpacing the supply.</p>
<p><strong>Supply Situation:</strong></p>
<p><strong>Area and Irrigation.</strong> The Philippines has approximately 4.2 million hectares of rice lands and produce about 11.2 million Metric Tons (MT) of milled rice, sufficient only for 90% of the population. Out of the 4.2 million hectares, only 1.2 million are irrigated and therefore, about 71% of it has the potential to double its yield. Irrigating the lands is all that&#8217;s needed to wipe out the present shortage.</p>
<p><strong>Certified and Hybrid Seeds.</strong> Going further, a study of farmers&#8217; planting methods will show that about half of the country&#8217;s rice lands are still planted with the old rice varieties that produce only about 2.75 MT/hectare. The Philippines has so-called &#8220;Certified&#8221; and &#8220;Hybrid&#8221; seeds that yield 4.7 and 6.5 MT/hectare, respectively. The country&#8217;s supplier of hybrid seeds even claim that the actual average yield of his seeds is actually higher (8~10 MT/hectare) and there are even instances of exceptionally high yields that are reported b y some farmers.</p>
<p><strong>Paradigm shift.</strong> Having grown to the old ways, most farmers refuse to use the new varieties and adapt better technologies. But just by looking at the figures mentioned, one will realize that a simple paradigm shift is all that is needed to increase the country&#8217;s harvest and attain rice sufficiency. Farmers only need to accept and adapt to change in order to increase their yields and increase their earnings.</p>
<p><strong>Post harvest facilities, farm to marker roads, organic fertilizers, etc&#8230;</strong> In addition to the use of higher yielding seeds and the installation of more irrigation facilities, the country also needs to further fine tune its farming systems through the wider use of organic fertilizers, more efficient post harvest facilities and farm to market roads that will lower the farmers production cost.</p>
<p><strong>Off shoring production.</strong> The use of better varieties, fertilizers, etc will come into naught if the weather decides to play with the farmlands, like what happened to Myanmar. In that country, a giant cyclone devastated the land and changed its status from being rice sufficient to a country in deficit. Following China&#8217;s model of buying/ leasing large tract of lands in Russia, Africa and South America and planting it with rice will ensure that the country will have alternative sources of rice (food) should calamity strike the country.</p>
<p><strong>Residential farming.</strong> Even in the urban jungle, people can plant adequate amounts of food that will lessen their dependence upon farm produce. Bamboo can be cut lengthwise, hung and filled with enough soil for vegetable production; pots of soil can be planted with sweet potato, etc&#8230;</p>
<p>To sum it up, there are plenty of things that can be done to remedy the current rice shortage and the world&#8217;s current demand for more food. People are lucky that at this point, solutions can still be pulled from either the demand or the supply side. Let us not wait for the situation to get worse.</p>
<p>Now that the problem has been identified, it is time to move.</p>
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<div id="sig" class="sig">
<p>More information on the rice shortage and society lifestyle and trends in Manila, Philippines at http://www.wazzupmanila.com</p>
<div>
<p>Article Source: http://EzineArticles.com</p>
</div>
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