Ahmad Macky
7 May 2008
analysis
Port Louis — Whilst confronting journalists recently, the Prime minister said that China and India have stopped exporting flour and rice to other countries, including Mauritius. As we know, rice is the staple food of the vast majority of our population. There has been unprecedented demand for rice during the past few years.
The rice crisis in Malaysia, Indonesia and Philippines has been even greater. The price of rice, which on world markets surged round 175% over the past twelve months, is being closely watched in a barometer of potential unrest in several countries, including Mauritius.The high prices affect consumers all over Asia. Food inflation even in Asia's wealthiest nations such as Japan, South Korea, Singapore, Hong Kong and Malaysia can engender a political issue. But, for the poorest in Asia, rising food prices could lead to malnutrition.
While the mechanism of enforcement of the new price structure are yet unclear, what is certain is that rice traders will not be able to fleece consumers any longer through artificially inflated prices. Thus this is a step in the right direction. Some argue that such price controls are not really compatible with the concept of an open economy.
True, the basis of an open economy is healthy competition for emptying the consumers' wallets. But the State cannot remain an onlooker if the public is victimized by economic forces, trade manipulations or a combination of such factors. It has to take the side of the consumer, without necessarily harming the interests of the farmers and traders.
The prevailing rice crisis is a clear-cut case for state intervention. First, the STC and the government declared rice as an essential commodity several months ago. This step should have been taken years, if not decades, ago considering its importance in our daily lives. The authorities are looking forward to a bumper harvest from the current crop. It will help bring down rice prices, thereby reducing the consumers' burden.
Imports of rice consignments from several countries will also take the consumer in the same direction. It would be naïve to think that the crisis is confined to Mauritius. According to the latest reports, the entire Asian region (where the staple food is invariably rice) is facing a "rice crisis" of an unprecedented scale. Food prices are going up globally and rice is no exception.
The world has realized somewhat late in the day the increasing use of food crops for making bio-fuel is having a direct impact on retail prices of food worldwide. With more crops channeled to ethanol manufacture, the remainder commands a higher price. Another worrying factor is the use of rice and other grains for animal feed. The unprecedented rise of oil prices also affects food prices, in the form of extra transport costs which are ultimately recovered from the consumer. Climate change is also affecting agriculture worldwide, as rainfall patterns are disturbed and droughts become frequent.
Is there no solution in sight to the food crisis? That would be a pessimistic assessment. Better-yielding and more disease resistant paddy varieties must be cultivated using more modern (mechanical) methods. The latter will in any case be inevitable as more youth leave agriculture for white collar jobs. Another essential requirement is better storage facilities for rice stocks which basically apply to all fruits and vegetables as well.
Indeed there has never been a better time now to grow more food to develop the nation. This will be a programme to revive agriculture. This is praiseworthy as we have become more vulnerable to external shocks and price hikes in an import centred environment.
Still, we must be prepared for more price hikes in the future, as worldwide rice consumption increases with no corresponding rise in production. There will be no simple solutions to this global crisis, but a concerted effort from all rice producing countries will help ease Third World hunger pangs.
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