Sunday, March 30, 2008

Pricey rice roils Asian leaders

Global stocks smallest in 25 years; exports limited; riots feared

Sunday, March 30, 2008
By Paul Alexander
Associated Press


MANILA, Philippines -- Philippine activists warn about possible riots. Aid agencies across Asia worry how they will feed the hungry. Governments dig deeper every day to fund subsidies.

A sharp rise in the price of rice is hitting consumer pocketbooks and raising fears of public turmoil in the many parts of Asia where rice is a staple.

Part of a surge in global food costs, rice prices on world markets have jumped 50 percent in the past two months and at least doubled since 2004. Experts blame rising fuel and fertilizer expenses as well as crops curtailed by disease, pests and climate change. There are concerns prices could rise a further 40 percent in coming months.

The higher prices have already sparked protests in the Philippines, where a government official has asked the public to save leftover rice. In Cambodia, Prime Minister Hun Sen ordered a ban on rice exports Wednesday.

Prestoline Suyat of the May One Labor Movement, a left-wing workers group, warned that "hunger and poverty may eventually lead to riots."

The neediest are hit hardest.

Rodolfo de Lima, 42, a Manila parking lot attendant, said "my family will go hungry" if prices continue to rise.

"If your family misses a meal, you really don't know what you can do, but I won't do anything bad," said de Lima.

Others might not be so restrained, said Domingo Casarte, 41, a street vendor. "When people get trapped, I can't say what they will do," he said.

The U.S. Department of Agriculture forecasts global rice stocks for 2007-08 at 72 million tons, the lowest since 1983-84 and about half the 2000-01 peak.

The higher prices are stretching the budgets of aid agencies providing rice to North Korea and other countries.

Jack Dunford, head of a consortium in Thailand helping more than 140,000 refugees from Myanmar, said soaring rice prices and a slumping U.S. dollar are forcing cuts in already meager food aid.

"This rice price is just killing us," he said.

Rice prices have almost doubled in Bangladesh in just a year, sparking resentment but no unrest yet. Repeated floods and a severe cyclone last year have cut production, forcing the government to increase imports.

In Vietnam, a major rice exporter, the crop has been hit by the tungro virus and the brown planthopper insect.

Farmers there say they are not benefiting from the higher prices.

"The rice price has gone up 50 percent over the past three months, but I'm not making any more money because I have to pay double for fertilizer, insecticides and labor costs," said Nguyen Thi Thu, 46, a farmer in Ha Tay province, just outside Hanoi.

Another farmer, Cao Thi Thuy, 37, in Nam Dinh province, 75 miles south of Hanoi, said exporters have actually been paying less for rice over the last week.

"They tell us that now weather is better, and rice can grow more easily, so we should not expect higher prices," she said.

Philippine President Gloria Macapagal Arroyo, worried about anything that could spark a "people power" revolt against her, she arranged the purchase of up to 1.5 million tons from Vietnam. She also has ordered a crackdown on price manipulation, hoarding and profiteering.

Things are so tight that Agriculture Secretary Arthur Yap has asked people not to throw away leftover rice and urged fast-food restaurants, which normally give customers a cup of rice with meals, to offer a half-cup option to cut waste.

Philippine farmers say the country, which has become the world's largest importer of rice after being an exporter in the early 1970s, has shot itself in the foot by developing some former rice paddies for housing and golf courses and planting more lucrative crops on others.

One Asian country, Japan, is encouraging cuts in rice production. Rice prices there have been falling in recent months as people eat less rice and more bread.

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