Maclean et al. - 2002 - Rice almanac source book for the most important e

Table 4. Comparison of domestic rice prices and the cost of rice
production in selected countries, 1987-89.
Paddy yield Cost of Domestic farm-
Country (t/ha) production gate price of
(US$/t) paddy (US$/t)
Japan 6.5 1,987 1,730
Korea, Rep. of 6.6 939 957
USA 6.3 220 167
Vietnam 4.6 100 130
Thailand 1.8 120 141
Philippines 2.6 124 160
Indonesia 5.8 118 132
Bangladesh 4.6 138 180
Source: IRRI for Bangladesh and Vietnam. For other countries, FAO, Economic and Social
Development Paper 101, Rome, 1991.
Under political pressure from farm lobbies, the
government had to protect the domestic rice market
by increasing prices and providing farm subsidies,
to keep a balance between incomes of rice
farmers and incomes of urban labor households.
Rice production had been adjusted to domestic
demand through manipulation of trade, pricing,
and subsidy policies.
Ongoing negotiations within the World
Trade Organization related to liberalizing rice
trade may further dampen incentives for rice
production, particularly in these middle- and
high-income Asian countries. Large land-surplus
countries (e.g., Australia, United States) can reap
economies of scale using modern technology
(such as mechanization and precision farming
methods) because of the large size of rice farms.
If domestic markets in middle- and high-income
Asian countries are opened for competition, the
price of rice will decline substantially, providing
incentives to consumers to acquire imported food
staples and forcing farmers to abandon rice cultivation
in favor of more lucrative economic activities.
An important way of gaining competitive
strength in the face of liberalization of rice trade
is by consolidating tiny holdings into large
farms.“Smart farming” in large-scale holdings,
as currently practiced in developed countries,
may contribute to vertical integration of the rice
industry, more efficient use of machinery, and a
reduction in the large number of part-time farmers
whose income must be maintained at least at
the level of urban labor households. The main
constraint to the consolidation of holdings into
efficient and competitive large-scale farming in
Asia is the high price of land.
Sustaining food security
Food security means access by all people at all
times to adequate food required to live an active,
healthy life. Its essential elements are both
availability of food and the ability of the people
to acquire it. National self-sufficiency in food
may not ensure food security because the poor
may not have enough income to buy adequate
food. India, for example, is self-sufficient in rice
because it does not need to import it. Yet, onethird
of the Indian population cannot afford to
buy basic food. Maintaining a stable supply of
basic staples (through production or imports) at
affordable prices for the poor, while maintaining
incentives for production growth for farmers, is a
key element in sustaining food security.
Obviously, a country does not need to be
self-sufficient in domestic food production to
achieve or sustain food security. Singapore and
Hong Kong (China) produce very little food but
have better records of food security than the
major rice-growing countries in the region.
Malaysia meets almost one-quarter of its rice
needs through imports. It is a prudent policy
because Malaysia maintains domestic production
with subsidies; resources tied up in rice
cultivation can be used more productively in alternative
economic activities. What is important
for food security is achieving food self-reliance.
This requires (1) a favorable export growth at the
national level, permitting food-deficit countries
to import food from food-surplus countries that
can produce it at a lower cost; and (2) at the
household level, developing productive
employment that enables the population to buy
adequate food. Most countries in East and
66 Rice almanac