The Changing Economics and Politics of Rice:

Implications for Food Security, Globalization,

and Environmental Sustainability

Joachim von Braun

Director General, IFPRI

World Rice Research Conference

Tokyo, Japan, November 4, 2004

1. The global context of rice

2. Consumption patterns of rice

3. Rice production and technology

4. Political economy of rice, markets and

trade

5. Future scenarios for rice: Towards 2050

6. Concluding ideas and way forward

Overview

The role of rice at a crossroad

Cultural roots, poverty,

locale tastes and production

Globalization, new science, new tastes

Main questions

What patterns of rice demand in the future?

What future of rice technology?

Why is rice not very affected by globalization and will this remain so?

What future role of government and private sector in the rice systems?

1. The global context of rice

2. Consumption patterns of rice

3. Rice production and technology

4. Political economy of rice, markets and

trade

5. Future scenarios for rice: Towards 2050

6. Concluding ideas and way forward

Overview

Rice and Food Security

Percentage of calories from rice in diet

1970 1980 1990 2001

Asia 38 36 35 31

South America 11 11 12 11

Africa 5 7 7 8

United States 1 1 2 2

European Union 1 1 1 2

World 20 19 21 21

Source: World Rice Statistics, IRRI (September 2004)

Changing demand for rice

1. At higher incomes:

people diversify diet away from rice,

shift towards higher quality of rice.

2. Population growth increases the demand

for rice,

3. Growing urbanization lowers demand

for rice

4. Prices matter for the poor

“Favorable Abundance Infinitely”, Chee Wang Ng

Rice and poverty

Rice consumption and production are closely

linked to poverty

Rice as agent of change to get out of poverty

Rice is the main staple food of the poor

Rice is a major source of income and

employment for rural people, especially in Asia

Rice is healthy, but can become more so: bio-

fortified rice to improve the quality of the diet

of the poor

Rice research reduces poverty

India China

Number of

poor reduced

from rice

research

(million)

Reduction

as a % of

total poor

(%)

Number of

poor reduced

from rice

research

(million)

Reduction

as a % of

total poor

(%)

1991 4.9 2.1 5.2 5.5

1999 3.1 1.9 1.5 4.5

Source: Fan et al. IFPRI 2003

Photo by Kyaw Swar Tun, Myanmar (IYR Photo Contest)

1. The global context of rice

2. Consumption patterns of rice

3. Rice production and technology

4. Political economy of rice, markets and

trade

5. Future scenarios for rice: Towards 2050

6. Concluding ideas and way forward

Overview

Production and world price trends

100

120

140

160

180

200

220

240

260

280

1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003

300,000

320,000

340,000

360,000

380,000

400,000

420,000White Broken Rice, Thai A1

Super, f.o.b Bangkok

Production (milled)

Source: USDA PS&D Database (2004); and FAO Commodities

and Trade Division (2004)

Distribution of rice ecosystems

0%

20%

40%

60%

80%

100%

Asia

Latin

Am

erica

Africa

Austra

liaUSA

Europ

e

Wor

ld

Deepwater

Upland

Rainfed lowland

Irrigated

Source: World Rice Statistics, IRRI (September 2004)

Environmental Issues

Water use efficiency of irrigated rice is low,

requiring large amounts of water

Pesticides and fertilizer, loss of biodiversity,

pests, depletion of natural soil fertility

Complex interactions with climate change and

land use

Yield patterns and developments

The potential to increase yield in rainfed

ecosystems is still vast (positive impact on

poorest farmers in low income countries)

Important scientific breakthroughs have enabled

less favored areas to improve productivity (e.g.

IRRI’s drought tolerant varieties, hybrid rice in

China, and NERICA in Africa)

1. The global context of rice

2. Consumption patterns of rice

3. Rice production and technology

4. Political economy of rice, markets and

trade

5. Future scenarios for rice: Towards 2050

6. Concluding ideas and way forward

Overview

Rice: multiple functions of a strategic

commodity in a difficult market

Due to its importance in the diet of the poor and main source of income for farmers

Rice markets are thin, concentrated, volatile: Governments intervene to avoid instability

Historically, policies maintained stable prices for consumers in urban areas and subsidize farmers

Rise of the private sector

Activities traditionally carried put by government are increasingly being transferred to the private sector, e.g. stockholding

International trade activities are moving towards private traders,

The influence of large state trading companies is diminishing

Rice export price, 1983-2004 (Thailand)

0

50

100

150

200

250

300

350

400

1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003

US

$/T

on

White Rice, Thai 100% B second grade, f.o.b. Bangkok

New support policies for rice in

developing countries

Producer Support Estimates %

1992 2002

India -25 +40

Indonesia +11 +46

Viet Nam -11 +32

Sources: Mullen, Gulati, and Orden (2004); Thomas and

Orden (2004) and Sun (2003) at IFPRI

1. The global context of rice

2. Consumption patterns of rice

3. Rice production and technology

4. Political economy of rice, markets and

trade

5. Future scenarios for rice: Towards 2050

6. Concluding ideas and way forward

Overview

Scenario analysis for alternative policy developments

1. Progressive Policy Actions Scenario: New Focus on Agricultural Growth and Rural Development

2. Policy Failure Scenario:Trade and Political Conflict, rise in protectionism worldwide

3. Technology and Resource Management Failure Scenario:Adverse technology/natural resource interactions

World rice demand scenarios

350,000

390,000

430,000

470,000

510,000

550,000

590,000

1997 2015 2030 2050

('000 m

t, m

ille

d r

ice)

Progressive Policy Actions

Policy Failure

Technology and Resource Management Failure

Source: IFPRI IMPACT projections (September 2004)

Rice yield scenarios

2,000

3,000

4,000

5,000

1997 2015 2030 2050

Kg

/ha

Progressive Policy Actions

Policy Failure

Technology and Resource Management Failure

Source: IFPRI IMPACT projections (September 2004)

Scenarios of world price of rice

0

100

200

300

400

500

600

1997 2015 2030 2050

U$S

/t

Progressive Policy Actions

Policy Failure

Technology and Resource Management Failure

Source: IFPRI IMPACT projections (September 2004)

Sharon Oliver United Kingdom , IYR Photo Contest

PERCENTAGE of children malnourished

10

15

20

25

30

35

1997 2015 2030 2050

Percen

tag

e o

f m

aln

ou

ris

hed

ch

ild

ren

Progressive Policy Actions

Policy Failure

Technology and Resource Management Failure

1. The global context of rice

2. Consumption patterns of rice

3. Rice production and technology

4. Political economy of rice, markets and

trade

5. Future scenarios for rice: Towards 2050

6. Concluding ideas and way forward

Overview

Conclusions

1. Rice continues to be crucial for food and

nutrition security.

2. Feeding the growing population requires

increased yields. Sustainable rice

production requires new technology

3. There is an international moral

responsibility of high income countries

with advanced rice science to share that

with poorer nations

4. The need for efficiency in globalization. Rice policies shift towards less government intervention

5. Rice remains an agent of change in societal and economic development. Rice-culture has modernized but certainly not vanished.

Rice: a factor of healthy sustainability

in globalization.

Conclusions

“The Great Laughter”, Chee Wang Ng