Southeast Asia Faces Rice Crisis

Vietnam, the second biggest producer of rice, has cut exports to keep prices and demand stable in the home country. Cambodia has even stopped all exports of rice, while Indonesia, with the largest population in Southeast Asia, is thinking about introducing an export tax to encourage domestic rice producers to sell their rice on the home market. Ifzal Ali, chief economist of the Asian Development Bank -- or ADB -- warns of severe shortages and possible unrest:

"Once you get into this kind of a situation it could be both socially and politically very very dimissive. Because once you get into a class war it undermines the very fabric of society. It is for this reason that I think Asian countries, governments in Asian countires, are highly sensitive to increases of food prices."

Rice most important staple

Almost one half of the world population of 6.6 billion people live on rice. For more than 2.5 billion Asians rice is the most important staple. But the world's rice reserves are at their lowest in 30 years. In the Philippines there's already a shortage of rice. The country has to import more than 2 million tons of rice per year for its population of 85 million and more. Duncan Macintosh from the International Rice Research Institute in Manila reflects on the situation:

"The Philippines are not self sufficient because of their geographical situation. Compared to the big rice exporters -- such as Thailand or Vietnam – the Philippines have limited agricultural land, in fact less than half the productive and agricultural land that Thailand has and the country is spread across 7,000 islands."

According to media reports already 10 million people are on the point of starvation in the Philippines. The United Nations World Food Programme has provided extra funds to provide help for one million people in Southern Philippines. Valerie Guarnieri, director of the World Food Programme in the Philippines, says:

"Because the price has increased so much in each of the countries what we're finding is that even more people are unable to meet their food needs. Around the world food normally represents the largest share of a household's food expenditure. Any change in a food price hits the poor consumer directly in the pocket. The prices have risen so much and so high over a relatively short period of time so people who were previously just able to meet their food requirements through the market now find that they can't afford to buy enough food for their families."

Bio-fuel contra rice

One of the reasons behind low stocks of rice is the rising demand for bio-fuel. More and more agricultural land is being used to grow palm oil and maize instead of rice. Duncan Macintosh, of the International Rice Research Institute in Manila, again:

"On one hand governments, also in the Philippines, encourage the production of plants which can be used as bio fuels and thus increase the income of farmers. On the other hand if too many farmers switch to these products than this could result in a national food crisis."

Even in Singapore, rice is becoming scarce. Prices are soaring -- about 2 Euros fifty per kilogram -- and people are stockpiling rice at their homes. Singapore's government has asked the citizens not to panic. There are enough reserves to deal with any crisis and no measures will be taken to control prices, Trade Minister Iswaran gave his countrymen to understand.