Humanist Association of Hong Kong

Humanist Network

The Real Price of Rice
By Tony Henderson,
chairman, Humanist Association of Hong Kong

Suddenly, price rises for foodstuffs! Yet, the growing of these foodstuffs has continued as usual with only localised problems - for example as caused by cyclone Sidr in Southern Bangladesh. But the phenomenon is worldwide. This points at a marketing issue, a subsidies issue, not a growers issue. What it might be pointing at is the system of agro-business and tied distribution, its malfunctioning or worse - the entire trade being intentionally mis-handled.

With overall incomes rising among the contentedly employed, people are buying more food but there is considerable wastage - while the poor cannot even get food on the table. Rice production is rising but consumption is increasing at a faster rate. Biofuel policies are also negatively affecting prices on the world stage of food production.

According to the World Bank, global maize production increased by 51 million tonnes between 2004 and 2007. During that time, biofuel production in the US alone (mostly ethanol) rose by 50 million tonnes, absorbing almost the entire global increase. Agricultural subsidies are at the root of this problem - also trade barriers. It is the subsidised foodstuffs that are supplied as aid to economically problematic countries. The snake has hold of its own tail!

To paraphrase Tom Holland writing in the South China Morning Post (May 6, 2008): Encouraged by those subsidies, US farmers grew 18% more corn last year than in 2006, encroaching heavily on to land formerly devoted to food and animal feed crops to do so.”

Subsidies mean rich countries are undercutting the poor country’s farmers and discouraging investments where it is most needed.

No one doubts the system of distribution is tied tightly into the commodities market and there is a major amount of cash slurping around in both futures and commodities markets. The ‘players' having recourse to those funds have interests far from those of the end-consumer.

Then, there is the currency problem that in its entirety hinges around the weak US dollar. As trades are largely effected in that international currency commodity prices reflect the volatility presently seen in currency trades. Dealers are buying ahead to secure their accustomed profits not in the least concerned about the effects of those essentially unenlightened capitalist practices that lift prices indiscriminately.

All the evidence points at the US intentionally weakening their dollar to offset the country's impossibly huge debt as the dollar US is getting cheaper as each day passes and the Iraq-Afghanistan invasions continue.

Then, in parallel, there are the protectionist moves disguised as the promotion of environmentalism, fair trade and labour rights where developed-country style provisions were lobbied into undeveloped countries' manufacturing sectors. The effect of these policies in such as Bangladesh, was to put many young girls in the textiles trade on the street, as factories closed for reasons of no under-age employment. But it wasn’t as if there were schools for the unemployed young people to go to instead!

This kind of protectionism is also going toward the defeat of China as manufacturing giant invincible, and true enough, factories are moving out of the special zones and into the remoter regions of China - Chengdu in Sichuan and Changsha in Hunan - and factories are even abandoning China altogether and moving to Vietnam and India.

The trend is for large multi-national corporations to adopt a ‘China-plus-one’ strategy to balance out their Asia manufacturing presence and to minimise risk by having that open-ended choice to pick the cheapest and leave the others and move on. Even Chinese manufacturers are opening up plants in other parts of Asia - TCL Corps is upgrading its facilities in Thailand, Vietnam and the Philippines.

The same happens in agribusiness.

Farming today in most places is controlled by vested interests like the innocent sounding graziers unions that hold courses where corporate outsiders or government officials - of governments that have sold out to those corporations - come in and inform of the latest in seed varieties and their associated fertilisers, weed killers and pesticides, the schedule of planting plus applications, the sources where you get those - and yes: "...we stock them and offer free delivery and you get a juice blender if you join up today."

Those graziers unions are locked in to larger corporations and when investigating the origins of those corporations you get back to a Dow Jones or Nestle. It is amazing how far and deeply the tentacles of those multi-national conglomerations stretch. Farmers need to be able to operate freely but in making their own decisions, they need free access to information, not information dovetailed by others.

As eager-for-dollar countries earmark more land for industrial use and residences for their own high flyers, because this money-go-round is creating a bubble of the upper monied-class in economically undeveloped countries, the small-medium sized farmers are getting squeezed and the landless are increasing in number and are in some instances on the rebound from the big cities - having learnt the hard way that to be destitute in a city is much worse than being unemployed in one's own home town among relatives.

It is as though everything was out of control but no, that is a fallacy. In the end, it all depends on the little man seeing that what is done on the micro-level really does make a difference - immediately, to that one, that family, that company in its local situation - thus the country as a whole.

That's where the effort must be placed. The whole shebang needs to be decentralised. That in turn can effect changes at the macro-level - ‘the trickle-up effect'. Then, people can cease worrying about the macro-news so daily repeated as problematic. There is quite enough to do locally and within the immediate situation to keep everyone busy - and fed.

In the instance of rising rice prices in the Philippines - the world's largest rice importer - beyond the afford-ability of the poorer sector, the government response, the promise by the Arroyo crowd of putting lots of money into rejuvenating farming, is so predictable. Where will that money go? Will it get to the small farmer? No! It will go to the already well funded institutes like the International Rice Research Institute (IRRI), into high yield variety research. While the IRRI has done and is doing excellent research - they have been into that for 20 years - how will they solve any problem now? They have already supplied the answers: these need implementation.

That Institute’s Reiner Wassmann, a climate change specialist: “Methane emissions are unique to rice," he said. "If Asian countries are exploring possibilities to reduce greenhouse gas, they have to look at rice production. I'm not saying it's the biggest source, but in Asia it's a source that cannot be neglected."

As small-time rice farmers cannot afford to drain rice fields between crops the only answer is to have those small farms combined into one big one and then what? It’s Big Brother taking over yet again. No. It becomes clear just which sector the IRRI is looking after.

The media release from that government tells that: "...not enough rice reaches every table because of national problems such as the low amount of public investment in research, development and extension, irrigation, and farm-to-market roads; and limited mechanisms for extensions to facilitate adoption of available technologies for rain-fed and other unfavourable ecosystems."

There is truth in all that but the real problem is the block at the high-end, the circulation of ‘fluids' limited to the upper strata of society, the absence of the famous ‘trickle down' effect. Today the Filipino rice farmer farms a lot more efficiently - the IRRI says double - than their much applauded Thai counterparts - Thailand being the biggest rice exporter in the world, well, until so recently when all exports were stopped.

While those countries with deltaic river systems supplying constant water can use the irrigation system that has been found most efficient - called the "System of Rice Intensification"- that requires less water, the Philippines cannot follow that route as the country largely depends on rains.

But rice is quite marvellous because there are varieties that can handle every situation from flood plain to upland - swamp rice varieties and upland varieties - it's a question of choosing the correct variety for the farm location. Rice culture as is can be contemplated because any major shift would adversely affect the majority of rice farmers. That is not an option in a democracy.

But the world's big rice producers are caught by the very nature of big business in the net of the banks and industrial conglomerates that control seeds and chemical fertilisers-weed killers-pesticides because mass production - to feed the peoples of mega-cities - demands agro-business practises thus HYV - high-yielding varieties seed, fertilisers and weed killers and pesticides.

Also, in the use of transgenics (or GM), many scientists remain unsure about the biological impact which remains uncertain. Besides that, these outfits cannot help but be part of the problem. So let the small growers turn elsewhere seeking that solution and incorporate the new with the old. Yes, GM will have a place but not a dominant role.

One big issue with artificially cultivating genetic properties, such as insect resistance, is, will those characteristics carry over to other plants with unexpected results - with those transgenic varieties entering the wild to disrupt bio-diversity by short-circuiting the long term (natural) tests over time?

The UN is under criticism for advocating agro-ecological approaches and organic farming (International Assessment of Agricultural Science and Technology for Development report 2008) because that implies abandoning use of chemicals in farming. However, that is too black and white as fertilisers such as obtained from dolomite limestone are still applicable and where needed, surely chemical fertilisers etc can be used if priority is given to other means of supplying those nutrients and prophlactics when the aim is production efficiency and not Green Fundamentalism.

For the small producer, the idea is to limit use of those more expensive bi-products of the petroleum industry and make the most of green manuring and the likes to reduce dependancy on imported or distantly transported raw materials. The methane produced - and by grazing animals - is acceptable given oil use is curtailed.

It is widely understood that too small an acreage is inefficient, so, on a family-by-family level people have to relearn old things and see the importance of co-operation. There is too much tribalism in villages and small towns. Under that mentality co-operative ventures are in practice very difficult to get off the ground - but that co-operative form of organisation is critical for small-plot land owners.

Then there is the matter of land security and legal titles. Unless a small grower has title to his land there is no guarantee of security and it takes time consuming TLC to build a good soil; thus legalisation of ownership is an imperative. For the big landowners this is not a problem because they can buy their way through the legal process if someone arrives on the doorstep threatening long term security of tenure.

Most of Asia is without that infrastructure of laws that make the carrying of capital possible. Capitalism works within a legal framework and without that there is no way to accumulate capital, to organise value, and to be able to transfer it. It is the rule of law that makes the market economy. - a legal property system, good contracts, good administration of justice and proper representation on paper. No contract means no credit, no way of constituting a company that can issue shares thus nothing to sell against investment.

The smaller scale rice farmer can opt out of the agri-biz approach and bring in methods of cultivation where preparing the land prior to planting is the norm, using locally available leaf toppings and green manuring with much less reliance on synthetic fertilisers - also falling back on old proven varieties that cannot match the HYVs in terms of volume of product but are less (up-front financially) demanding and versatile, hardier, meaning less disease and pest worries - as slower growth means a stronger more resilient plant. Rice and other products from hardy plants also store better.

Many learned farmers argue that a lack of genetic variation makes specific strains more susceptible to getting wiped out by a single pest or pathogen, or to gradual climate change. In 1970, 15% of the US corn crop was destroyed when blight swept the grain belt. In the mid-19th century, the Irish potato crop crashed, causing famine that killed a million people. The reason? Dominant plant varieties were too genetically alike and therefore vulnerable to the same enemies.

Local produce needs to feed the locals first with only the surplus going for export to far away places - of course a region can have a cash crop but profits must go to regional coffers not central government-business groups. This will wrest away from others control over the distribution and assure neighbours are fed first. This done countrywide would have the desired decentralisation effect.

Re-invigorating the Countryside
Small size allows intercropping and variety and a thousand-and-one ways of niche cultivation that makes a more interesting farming experience. In turn, positively effecting home life and its quality. This goes toward offering the young farmer a more rounded experience and may keep him or her on the land, in the hometown, or in a nearby larger town not so far removed from his or her socially normalising roots.

This latter point needs to be revisited in light of the negative consequences of industrialisation and mass migration to big cities, the rampant abuse of youthfully keen energies and that young willingness to ‘go anywhere; do anything' attitude to make it - a way of thinking long lost among the passing generations who just want to hold on to their power positions!

All the countries of Asia are busy industrialising and the lucrative markets - dominated by a few big buying groups - pick and choose from the best and cheapest and leave the rest floundering in a choppy wake of closures, sells offs, worker disputes, bankruptcies, disillusionment - and ruined lives.

The Indian economy is growing and doing extremely well and the way the Indians are approaching economic development is radically different from China. This was highlighted in a talk: The Countryside and the City (November 2007, Chile), given by South American olive tree farmer-penman Mario Rodrigues Cobos - who writes under the pseudonym of Silo.

"In India 70% to 80% of the population live in the countryside, in small villages. This is quite different from China. There is no gulf between city and countryside and India has always maintained this base. It is something very wise and only a few large cities exist in relation to the size of the population. Most important was the response India made some 50 years ago to farm land that was exhausted and that each year produced less leaving the populace with less production, with less food."

India accomplished that feat using chemical fertilisers - those products reputed to be ‘so bad' by the ‘Pure Greens' helped rescue a serious situation. Since then the growth in production figures of crops has never ceased.

"This is the opposite situation to that of China where a great gulf exists and they confront a serious problem," adds Silo. "It's the centralisation and industrialisation - whereas India still has its ancient culture and is still an agrarian-based society depending more on small decentralised farms."

China lost a lot during its infamous Cultural Revolution and the Chinese leadership is well aware of the Green-Gray divide problem as evidenced by the pronouncements of the new General Secretary of the Central Committee Hu Jintao, who affirmed the government's commitment to bridging that rural-urban gap at the October 2007 17th CPC National Congress.

For Silo, "The countryside needs to be fortified. If farming is going to be tilted towards the production of biofuels it will be coveted, as never before, by the rest of the world." This latter point speaking of South America, but the same conclusion can be drawn for Africa and Asia.

The little Man holds the key to the door of the path to the only way out. He and she must regain control. It’s the David and Goliath scenario in the 21st Century. On the macro level, governments as country managers need to take another look at the benefits of unenlightened industrialisation of everything. What is the real merit in producing the cheapest shoe? Will your cheap shoe be the one chosen by Wal-Mart? What is the reason to sacrifice an entire strata of working class people on the alter of consumerism?

The price of foodstuffs needs to be locally contained and the distribution and marketing controls wrested away from those whose motives are profit-based. Decentralisation is the key. The rich-poor gap must be bridged locally then the Big City will also look after itself and live in a more proportionate way with lifestyles that do not marginalise the countryside.

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