No Grain, Big Pain

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Bottom of the Food Chain
Of course, higher global prices hurt the poor most, and the impact is particularly heavy in countries such as Bangladesh and the Philippines, which are dependent on imported rice to feed their large populations. A November cyclone in Bangladesh ravaged the fall crop, destroying some 800,000 metric tons of rice and forcing the country to import an extra 2.4 million metric tons from India simply to stave off famine. In Vietnam, bad weather and pest outbreaks hurt harvests. In the Philippines, where some 68 million people live on less than $2 a day, the government recently urged restaurants to halve their portions of rice. Credit Suisse estimates a shortage could cost the Philippines up to 1% of GDP in 2008. Manila resident Evelyn Belo, who waited in line for an hour last week to get a 110-lb. (50 kg) bag to feed her family of five, is feeling the pain. "It's very hard to feed my family already, and now we're worried that the rice will run out. I've started cooking rice porridge to try and use less. Rice is very important to us: it is what we eat. Without [it] people will die." Food aid programs are suffering, too. Valerie Guarnieri, Philippines director for the U.N. World Food Program, which feeds about 1.1 million Filipinos, says rising prices mean her organization will have to spend about 60% of its $19 million budget on food, up from 45% last year. "It's going to have a huge impact on our operation," Guarnieri says.

Asia's rice crisis isn't likely to ease soon, and may get worse due to ominous long-term trends. The Rice Institute's Zeigler says rice production is not keeping pace with demand from surging Asian populations. The U.S. Department of Agriculture estimates that worldwide rice consumption increased 0.9% last year, to nearly 424 million metric tons. Production increased less than 0.7%. "This has been coming on for several years now," Zeigler says, noting that global stocks are at their lowest point in decades. "We're consuming more than we've been producing. And as demand for rice continues to increase, we've seen productivity growth plateauing."

Zeigler blames a lack of investment in agriculture. In much of Asia, rice farming remains small-scale and inefficient. In Thailand, for example, average yields are less than half that of either Chinese or U.S. farms. At the same time, Asia's rapid urbanization has gobbled up fecund farmland. In Vietnam's Bac Ninh province, 12 miles (19 km) from downtown Hanoi, shimmering emerald paddy fields are now bisected by a four-lane highway. Not far from where rice farmer Nguyen Thi Lan stands weeding her fields in calf-deep muck, a Singapore-Vietnamese joint venture will soon build a 1,700-acre (700 hectare) industrial park and township, turning this rural area into a satellite city. Trang Hieu Dung, director of planning at Vietnam's Ministry of Agriculture and Rural Development, says that the country is losing about 99,000 acres (40,000 hectares) of rice paddies every year to construction of cities, highways and industrial zones. In Thailand, the amount of land under cultivation dropped by more than 13% between 1995 and 2005.

The Race for Rice
Some governments are not taking a long-term view, however. In a game of beggar-thy-neighbor, they're trying to keep inflation at home from soaring out of control. Vietnam recently imposed export quotas to maintain domestic supplies, which reduces the international inventory and drives up the global price. China has also imposed strict limits on exports to restrain domestic prices. In the Philippines, meanwhile, President Gloria Macapagal Arroyo personally negotiated a guarantee of 1.5 million metric tons of rice from Vietnam.

But even if Asia manages to keep its own rice bowl full, high prices and shortages may still filter down to the world's poorest countries. To put the problem in perspective, the Philippines, which faces the most acute rice shortage in Asia, imports just 15% of its rice; many countries in sub-Saharan Africa import up to 40%. Tight world supplies create a zero-sum calculus: Vietnamese rice going to the Philippines is rice that is unavailable for Africa — or for the NGOs that feed the world's most vulnerable populations. "A lot of people don't realize that Africa's rice depends on Asia's surpluses," says the Rice Institute's Zeigler. In other words, Asia's grain is Africa's loss. With Asian nations scrambling to protect their own supplies, that could mean a much hungrier world.