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Posts Tagged ‘Myanmar

Ten reliable rice years

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The AMIS prices panel as we find it in 2014 January. Weekly international rice prices (top) are for Thai rice, which have been on a plateau from 2012 Jan to around 2013 April, after which they declined. Rice futures prices (60-day average) have also been on a very gentle upward slope (middle) since 2012 Jan after pronounced swings to that point from 2010 Jan. Rice price volatility was dampened during the last quarter of 2011 until third quarter 2013 (compared to the previous two years) and has moved slowly lower over three years (bottom). Charts: FAO-AMIS

The AMIS prices panel as we find it in 2014 January. Weekly international rice prices (top) are for Thai rice, which have been on a plateau from 2012 Jan to around 2013 April, after which they declined. Rice futures prices (60-day average) have also been on a very gentle upward slope (middle) since 2012 Jan after pronounced swings to that point from 2010 Jan. Rice price volatility was dampened during the last quarter of 2011 until third quarter 2013 (compared to the previous two years) and has moved slowly lower over three years (bottom). Charts: FAO-AMIS

International grains traders rarely consider the historicity of what they deal with day in and day out. Wheat up today, maize down tomorrow, soy futures worth considering for next month, milk powder positions to be liquidated, and so on. Hold what you can profit from only so long as there is profit to be made, and futures are nothing but bets you’ve studied carefully.

But even for the hard-boiled traders, the last decade of rice has made them turn to look back and consider the curiosities of the market. Inventories of rice, all over the world, have been growing slowly and steadily for close to a decade. Now that trend, which since 2003 has been one of the longest unbroken trends in world agriculture, is ending. The change is being attributed, in the commodity exchanges and grain trading floors, to what is called a ‘downgrade’ of supplies of rice in India by the International Grains Council.

The first such forecast decline in world rice stocks, of about one million tons, means that the IGC is estimating world rice inventories at the close of 2013-14 to be 108 million tons. The curious aspect is that India is expecting a bumper rice harvest for 2013-14, and although IGC says world inventories will drop slightly (the end of the trend), there is also a reduced estimate for world consumption of rice, which is another curiosity.

According to the traders Thailand, the top rice exporter for years, has been stockpiling rice “at prices some 40%-50% above the market” and thereby prompting credit rating agencies like Moody’s to claim that the cost of the Thai programme was “threatening the country’s sovereign debt rating”.

This is plain rubbish. Traders and commodity exchanges do not grow rice to feed their families and sell if there is a small surplus to sell. The finance bots in predatory agencies like Standard and Poor’s, Moody’s and Fitch – considered the three largest by the scale of their work – don’t know the difference between a cauliflower and millet and can grow neither. Thai, Indian and African small farmers could not care less whether credit rating agencies exist and our governments should learn what true sovereignty means from our small farmers.

The FAO and IGC food price indexes and their sub-indices. For FAO the chart shows the FAO Food price Index and the cereals, oils and fats and dairy sub-indices over the last five years. For IGC the lower chart shows the IGC Grains and Oilseeds Index, also over the last five years, with the wheat, maize and rice sub-indices. The IGC rice sub-index has also recorded a plateau from 2012 January onwards with a more pronounced decline setting in from 2013 August. Charts: FAO-AMIS

The FAO and IGC food price indexes and their sub-indices. For FAO the chart shows the FAO Food price Index and the cereals, oils and fats and dairy sub-indices over the last five years. For IGC the lower chart shows the IGC Grains and Oilseeds Index, also over the last five years, with the wheat, maize and rice sub-indices. The IGC rice sub-index has also recorded a plateau from 2012 January onwards with a more pronounced decline setting in from 2013 August. Charts: FAO-AMIS

The odd tale of rice was given a late twist by two cyclones. One is Cyclone Phailin which struck the eastern Indian coast in the first week of October 2013. And he other is Typhoon Haiyan, which struck the Philippines in early November 2013. Vietnam is to supply 500,000 tons of rice to the Philippines, which has sought the supplies to boost state reserves depleted by the relief operations after Typhoon Haiyan.

The FAO’s Rice Market Monitor for 2013 November said: “Although accounting for much of the worsening in the global outlook, Asia is still expected to sustain growth in world rice production in 2013. According to the latest forecasts, the region is to harvest 672.7 million tonnes (448.6 million tonnes, milled), 1.2% more than in 2012. Foremost among countries responsible for the increase are India, Indonesia, Thailand, Myanmar and Bangladesh. By contrast, drought in China’s central and eastern provinces exacted a heavy toll on the intermediate and late rice crops, which may bring about the first production decline in the country since 2003.”

I find the FAO Rice Market Monitor more detailed than what the IGC puts out (although IGC’s public offerings are but a distillation of what subscribers to the information service obtain). The FAO Monitor has also added that given a poor delivery record so far, Thailand appears unlikely to boost its exports beyond the relatively low level of last year. And that expectations have improved for India, which may replicate the 2012 record performance, with Australia, Cambodia, China (Mainland), Egypt, Pakistan, Paraguay and the USA also forecast to export more.

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A Jekyll and Hyde food price index

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FAO's usual winsome twosome, the food price index and food commodity price index charts.

FAO’s usual winsome twosome, the food price index and food commodity price index charts.

Why does the perversity of international food price monitoring continue when all evidence tells us food price inflation is raging just as it was in 2007-08? Here is an example of how persistent this perversity is.

Maize in Malawi at 280%, maize in Tanzania at 110%, maize in Mozambique at 60%, maize in Zambia at 50%. Wheat in Tajikistan and in Russia at 55%, wheat in Kyrgystan and Afghanistan at 40%, rice in Myanmar at 35%. Maize in Haiti at 55%, maize in Honduras at 40%, wheat and rice in Brazil at 30%, maize in Nicaragua at 30%, rice in Bolivia at 25%.

Those are the annual increases in the prices of these cereals in the countries named. The estimates come from the charts found in the FAO Global Food Price Monitor for 2013 May (which has prices for up to April). The charts however are at the end of the Monitor. On the first page, the Monitor offers very short summaries. Like this one:

“In Eastern Africa, maize prices mostly strengthened for the second consecutive month following seasonable patterns. However, prices stabilized or started to decline in some countries where new harvests are about to start.” Is that what is being described with a 110% increase in Tanzania?

Or this one:

“In Asia, domestic prices of rice and wheat generally weakened with the arrival of the 2013 early season rice and winter wheat harvests.” Is that what is being described with a 35% increase in Myanmar?

Or even this one:

What FAO's own charts tell us about rising food prices for staples worldwide. These are from the FAO Global Food Price Monitor for 2013 May.

What FAO’s own charts tell us about rising food prices for staples worldwide. These are from the FAO Global Food Price Monitor for 2013 May.

“In Central America, maize prices strengthened in April with the onset of the lean season and in some countries were at high levels. Bean prices remained low, pressured by abundant supplies from bumper crops in the 2012-13 cropping season.” Is that what is being described with a 40% increase in Honduras?

Who are these summaries really for and why does FAO persist in releasing to the public these misleading pictures of food prices (when it means export prices), and especially when its own price monitoring tools tell us very clearly that many many people are struggling under crushing inflation in the prices of food staples?

To take the food price opera further, this is what the FAO Food Price Indexwhich is one of the world’s primary indices and referred to thousands of times a day by planners, the food industry, policy-makers, bankers (always bankers), commodity traders, foreign exchange brokers, bond market artists and rogues, warehousing tycoons, the purveyors of genetically modified seed, the cigar-smoking CEOs of grain trading companies, and the smarmy corrupt political cronies of all of the above – says about cereals:

“The FAO Cereal Price Index averaged 234.6 points in April, down 10 points (4.1%) from March, but nearly 11 points (4.9%) above the corresponding period last year. Most of the decline in April was triggered by weaker maize prices on expectation of higher closing stocks and favourable 2013 crop prospects. Wheat prices changed little, as the downward pressure stemming from expectation of larger inventories was offset by the upward pressure resulting from concern over the poor growing conditions and spring crop planting delays in the United States. Rice prices were marginally down …”

Read that again, 4.9% above the corresponding period last year. The smallest of the annual percentage increases in the second paragraph of this posting is five times as much as 4.9% which is why we must ask FAO, again and again, who the beneficiaries of this large international effort to collect and distribute food prices really are.

Not the populations of Mzuzu, Kampala and Milange or Jalalabad, Yangon and Sughd, or Tegucigalpa, Sao Paulo and Jacmel, all of whom must find their own means of measuring the burdens of food price increases, and who have in the last year, cut down on health care and perhaps even the education of their children, only to not go hungry too often, too painfully.

Joining the dots between economics, income, health and poverty

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The concerns about recession and its impacts on poverty are seen commonly as a question mark over household incomes, over food security and often involve debates about social protection. An aspect that all too often gets ignored in this equation – no doubt because of its complexity – is health and in particular the health of women and children.

Changes in neonatal mortality rates between 1990 and 2009. The map illustrates the change in NMR between the years 1990 and 2009 for each of the 193 countries estimated. PLoS Medicine 8(8): e1001080

This is linked very closely to poverty, however we measure it, and the conditions that either cause poverty to persist (leading to chronic poverty) or cause households at risk to lapse into poverty every now and then (shock). The human development index methodolgy, which is from this year using multi-dimensional indices for poverty for the first time, helps us link health, poverty, income and economic growth (or its opposite).

The question is: is this new understanding, which is more in tune with the way households actually carry on with their lives and are actually affected by wider trends concerning economy, helping integrate the connections? If there is one good reason to ask this question, it is the new study on ‘Neonatal Mortality Levels for 193 Countries in 2009 with Trends since 1990: A Systematic Analysis of Progress, Projections, and Priorities’.

[The World Health Organization (WHO) has a report and summary of the study on this page – ‘Newborn deaths decrease but account for higher share of global child deaths’]
[The full study is available on PLoS Medicine, 1 August 2011 (Volume 8, Issue 8)]

This has shown that every year, more than 8 million children die before their fifth birthday. Most of these deaths occur in developing countries and most are caused by preventable or treatable diseases. In 2000, world leaders set a target of reducing child mortality to one-third of its 1990 level by 2015 as Millennium Development Goal 4 (MDG4). This goal, together with seven others, is designed to help improve the social, economic, and health conditions in the world’s poorest countries. In recent years, progress towards reducing child mortality has accelerated but remains insufficient to achieve MDG4.

“In particular, progress towards reducing neonatal deaths – deaths during the first 28 days of life – has been slow and neonatal deaths now account for a greater proportion of global child deaths than in 1990. Currently, nearly 41% of all deaths among children under the age of 5 years occur during the neonatal period. The major causes of neonatal deaths are complications of preterm delivery, breathing problems during or after delivery (birth asphyxia), and infections of the blood (sepsis) and lungs (pneumonia). Simple interventions such as improved hygiene at birth and advice on breastfeeding can substantially reduce neonatal deaths.”

Neonatal mortality rates in 2009. The map illustrates the NMR in year 2009 for each of the 193 countries estimated. PLoS Medicine 8(8): e1001080

The researchers used civil registration systems, household surveys, and other sources to compile a database of deaths among neonates and children under 5 years old for 193 countries between 1990 and 2009. They estimated NMRs for 38 countries from reliable vital registration data and developed a statistical model to estimate NMRs for the remaining 155 countries (in which 92% of global live births occurred).

They found that in 2009, 3.3 million babies died during their first month of life compared to 4.6 million in 1990. More than half the neonatal deaths in 2009 occurred in five countries – India, Nigeria, Pakistan, China, and the Democratic Republic of Congo. India had the largest number of neonatal deaths throughout the study. Between 1990 and 2009, although the global NMR decreased from 33.2 to 23.9 deaths per 1,000 live births (a decrease of 28%), NMRs increased in eight countries, five of which were in Africa. Moreover, in Africa as a whole, the NMR only decreased by 17.6%, from 43.6 per 1,000 live births in 1990 to 35.9 per 1,000 live births in 2009.

To return to my question concerning the understanding of economics, income, health and poverty, does most current analysis see to integrate these elements, or is it still GDP-income driven? A new (2011 May) paper released by the Brookings Institution indicates that the GDP-income route is still favoured. The paper, ‘Two Trends in Global Poverty’, Geoffrey Gertz and Laurence Chandy, has said that while the overall prevalence of poverty is in retreat, the global poverty landscape is changing. “This transformation is captured by two distinct trends: poor people are increasingly found in middle-income countries and in fragile states. Both trends – and their intersection – present important new questions for how the international community tackles global poverty reduction.”

The two charts show the trajectory of 20 developing countries along three dimensions: number of poor people, degree of fragility and real income per capita. These 20 countries collectively account for 90 percent of the world’s poor in 2005, and thus largely define the evolving state of global poverty. Graphic: Brookings Institution

“The increased prevalence of poverty in middle-income countries is in many ways a trend of success. Over the past decade, the number of countries classified as low-income has fallen by two fifths, from 66 to 40, while the number of middle-income countries has ballooned to over 100. This means 26 poor countries have grown sufficiently rich to surpass the middle-income threshold. Among those countries that have recently made the leap into middle-income status are a group of countries  –  India, Nigeria and Pakistan  – containing large populations of poor people. It  is their “graduation” which has brought about the apparent shift in poverty from the low-income to middle-income country category.”

This categorisation of middle, low and high income was to an extent useful in the 1970s, when the idea of a human development index was being discussed, but we’ve come a long way since. We know that even in smaller countries (rather, countries with populations that are relatively small compared to those whic bear the sort of burdens studied in the PLoS Medicine research) there is a great deal of income disparity. ‘Income’ itself is a condition with a bewildering number of inputs – social science is quite inadequate to the task of being able to recognise all of these, let alone quantify them and rationalise them across countries and regions – which is exactly what studies like this try to do unfortunately.

“In 2005, when more than half the world’s poor lived in such countries, it made some sense to think about fighting poverty in terms of a single developing country paradigm, based on what worked in countries such as Ghana, Tanzania, Mozambique or Vietnam,” Gertz and Chandy have said. “This logic was evident in two of the major events of that year which continue to shape today’s development agenda: the G8 meeting at Gleneagles and the High Level Forum on Aid Effectiveness in Paris. It was also apparent in Jeffrey Sachs’ influential 2005 best-seller, ‘The End of Poverty’. The legacy of these ideas is scattered throughout the work of the international development community in the design of traditional aid instruments and the standard methods of country engagement.”

The authors of the Brookings paper have said that this approach remains relevant for some countries, but with 90 percent of the world’s poor living in different settings today, its broader application can no longer be justified. Yet they have found that such an admission poses a dilemma. The dilemma exists because one of the reasons the stable low-income paradigm has persisted is because it characterizes an environment in which the international development community feels most comfortable and has the most experience. “The role of external actors in supporting poverty reduction in stable low-income countries is well understood and the standard tools of external assistance – financial and technical assistance – are well suited to them.”

Maplecroft's 2011 food security risk index

What does this mean? Does it give us a hitherto obscured insight into the inner world of aid agencies and international development departments and how they see ‘poor’ countries’ populations? Does it mean that we are burdened with three decades worth of simplistic labelling of populations at risk simply because labelling them any other way makes it difficult to help them? That’s what it looks like to me and I’d like to thank Gertz and Chandy for revealing this. But it’s way past high time this sort of categorisation was ditched, once and for all. It would do us and the battalions of development professionals a huge amount of good to simply be able to say, every so often, “we don’t know enough”.

It is worth being honest about the state of our knowledge concerning the lives of the the majority of households in ‘developing’ countries. Some of the reasons why such honesty will help in the long term are contained in a thoughtful new publication from the World Bank (whose army of development professionals will benefit from its reading). This collection is entitled ‘No Small Matter: The Impact of Poverty, Shocks, and Human Capital Investments in Early Childhood Development’ (The World Bank, 2011) and it has said that, as the 2008 global financial crisis has again demonstrated, economic crises are an unfortunate recurring event in the world and can have severe consequences for household livelihoods.

Progress in key health indicators, UN Human Development Report 2010

‘No Small Matter’ defines economic crises as sharp, negative fluctuations in aggregate income, these being especially common in developing countries, and the frequency with which they occur has been increasing in recent history. We know that declines in household and community resources are not the only risks that arise from an economic crisis because of its aggregate nature. We also know – from fieldwork and by hearing those whom we would wish to help – that at the same time as households cope with the possibility of reduced income from aggregate economic contractions, vital public services may also experience a decline in quality or availability, which in turn may have an additional impact on skill development among children. This is happening now, in more countries than ever before. The economic crisis that hit Latin America in 1982 led to a decrease in public health spending and had a disproportionate effect on the poorest groups. In 2011, the decrease in public health spending exists in many more countries.

A chapter in ‘No Small Matter’, ‘The Influence of Economic Crisis on Early Childhood Development: A Review of Pathways and Measured Impact’, by Jed Friedman and Jennifer Sturdy, is particularly useful.

This has said that “conservative estimates suggest that over 200 million children under five years of age living in developing countries fail to reach their cognitive development potential because of a range of factors, including poverty, poor health and nutrition, and lack of stimulation in home environments”. It is possible, the chapter’s authors have said, that this burden increases during times of crisis as poverty increases and food security is threatened. However, to investigate this claim more carefully it is necessary to understand the pathways through which poverty influences skill acquisition in children.

“The most severe condition affecting ECD (Early Childhood Development) is infant and early child mortality. Sharp economic downturns were associated with increases in infant mortality in Mexico, Peru and India. The mortality of children born to rural and less educated women is more sensitive to economic shocks, which suggests that the poor are disproportionately affected during most economic crises, and perhaps the poor face important credit constraints that bind in tragic ways during large contractions.

Weak relationship between economic growth and changes in health and education, UN Human Development Report 2010

The mortality of girls is also significantly more sensitive to aggregate economic shocks than that of boys. This gender differential exists even in regions such as Sub-Saharan Africa that are not particularly known for son preference and indicates a behavioral dimension where households conserve resources to better protect young sons at the expense of daughters.”

Finally, a further note about the extremely valuable PLoS Medicine study ‘Neonatal Mortality Levels for 193 Countries in 2009 with Trends since 1990: A Systematic Analysis of Progress, Projections, and Priorities’. The authors are: Mikkel Zahle Oestergaard1, Mie Inoue1, Sachiyo Yoshida, Wahyu Retno Mahanani, Fiona M. Gore1, Simon Cousens, Joy E. Lawn and Colin Douglas Mathers (on behalf of the United Nations Inter-agency Group for Child Mortality Estimation and the Child Health Epidemiology Reference Group – World Health Organization, Department of Health Statistics and Informatics; World Health Organization, Department of Child and Adolescent Health and Development; London School of Hygiene & Tropical Medicine; Saving Newborn Lives/Save the Children).

Children of poor households are more likely to die, UN Human Development Report 2010

The study found that of the 40 countries with the highest NMRs in 2009, only six are from outside the African continent (Afghanistan, Pakistan, India, Bhutan, Myanmar, and Cambodia). Among the 15 countries with the highest NMRs (all above 39), 12 were from the African region (Democratic Republic of the Congo, Mali, Sierra Leone, Guinea-Bissau, Chad, Central African Republic, Burundi, Angola, Mauritania, Mozambique, Guinea, and Equatorial Guinea), and three were from the Eastern Mediterranean (Afghanistan, Somalia, and Pakistan). Throughout the period 1990–2009, India has been the country with largest number of neonatal deaths. In 2009, the five countries with most deaths accounted for more than half of all neonatal deaths (1.7 million deaths = 52%), and 44% of global livebirths: India (27.8% of deaths, 19.6% of global livebirths), Nigeria (7.2%, 4.5%), Pakistan (6.9%, 4.0%), China (6.4%, 13.4%), and Democratic Republic of the Congo (4.6%, 2.1%). The top five contributors to the 4.6 million neonatal deaths in 1990 were: India (29.5% of deaths, 19.8% of global livebirths), China (12.3%, 18.0%), Pakistan (5.4%, 3.4%), Bangladesh (5.0%, 2.9%), and Nigeria (4.8%, 3.3%).

As the risk of children dying before the age of five has fallen, the proportion of child deaths that occur in the neonatal period has increased. This increase is primarily a consequence of decreasing non-neonatal mortality in children under five from infectious diseases such as measles, pneumonia, diarrhea, malaria, and AIDS. Globally, 41% of under-five deaths now occur in the neonatal period. Over the 20 y between 1990 and 2009, the proportion of global neonatal deaths that occurred in Africa increased. Although Africa is now the region with the highest NMR, the proportion of under-five child deaths that are neonatal remains relatively low in Africa—the fraction increased from 26% to 29% between 1990 and 2009. This apparent anomaly reflects the fact that Africa accounts for approximately 90% of child deaths due to malaria (0.7 million under-five deaths) and HIV/AIDS (0.2 million under-five deaths), resulting in relatively higher post-neonatal child mortality than other regions.

Food production and grain trade, May 2010

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Vendors in Mapusa, Goa

Vendors in Mapusa, Goa. The middle basket contains 'nachne', local millet

This is to be a monthly posting from now on. It will for a start draw on three main sources of global analysis: the Food and Agriculture Organisation (FAO), the International Grains Council, and the US Department of Agriculture Economic Research Service. Extracts from the three major sources run below, but this is to be placed in global context by the food production and supply situation in two of our neighbours in South Asia, Nepal and Afghanistan. There is hunger and displacement in Pakistan and Sri Lanka too, and I’ll update this posting with relevant reports. Also contrast the global views with the announcement from the US Department of Agriculture, which comes at the end of the list of extracts.

[1] “Nominal prices, in US dollar terms, of staple food commodities, mainly rice and wheat, have generally declined from the 2008 peak but remain significantly above their pre-2008 food-crisis levels in several countries. The price impact on overall food consumption of the vulnerable population is still expected to be substantial. Prices of rice have been increasing in India since the second half of 2008 and currently are above their levels of a year ago 5 percent in Chennai to 42 percent in Patna.”
“Retail prices of rice have also been rising since late 2009 in Bangladesh, the Philippines, Pakistan and Myanmar. In exporting countries such as Thailand and Viet Nam, rice prices (in local currencies) have declined since January 2010 due to strong international demand. Prices of wheat in India and Pakistan have also been rising steadily since October 2008. Recent increases are attributed to concerns over the unfavourable harvests of the current 2010 Rabi season. In Afghanistan, prices of wheat have been coming down since the 2009 bumper harvest in the country.” From FAO Crop Prospects and Food Situation May 2010

[2] “The forecast of world wheat production is increased by 2m. tons, to 660m. (676m.). World wheat consumption is forecast to grow by 1%, to a record 654m. tons, unchanged from last month. The forecast of global stocks is raised by 2m. tons, to a nine-year high of 201m. (195m.), with much of the increase in China and India.”
“World rice production in 2009/10 is estimated to decline for the first time in seven years, by 1%, to 442m. tons, mostly reflecting a reduced main crop in India. At 442m. tons, rice consumption will expand by 1%, in line with the global population trend. Inventories in China are expected to rise, but those in India and the five leading exporters are forecast to decrease. World trade in calendar 2010 is projected to recover by 5%, to 29.9m. tons, underpinned by larger shipments to Far East Asian markets.” From International Grains Council Grain Market Report 2010 May

FAO rice retail prices, from FAO Crop Prospects and Food Situation May 2010

FAO rice retail prices

[3] “Global wheat supplies for 2010/11 are projected 2 percent higher with larger year-to-year beginning stocks more than offsetting lower expected production. Global 2010/11 wheat production is projected at 672.2 million tons, down 1 percent from 2009/10 and the third largest production on record if realized. Larger projected production in EU-27, South America, and the Middle East is more than offset by expected declines in FSU-12, North Africa, South Asia, China, Canada, and Australia.”
“Global coarse grain production for 2010/11 is projected at a record 1,129.8 million tons, up 2 percent from 2009/10. Most of the 27.4-million-ton increase in coarse grains production results from higher projected foreign corn production, up 19.9 million tons from 2009/10. Higher expected foreign corn area and rising yields combine with higher U.S. area to boost global corn production to a record 835.0 million tons, up 26.5 million from 2009/10. Corn production is projected higher year-to-year for China, Mexico, India, Russia, EU-27, Ukraine, and Canada.”
“Global 2010/11 rice production is projected at a record 459.7 million tons, up 17.6 million or 4 percent from 2009/10. World disappearance (consumption and residual) is projected at a record 453.4 million tons, up 10.9 million or 2 percent. Large crops are projected for most of Asia including record or near-record crops in Bangladesh, Burma, Cambodia, India, Indonesia, the Philippines, Thailand, and Vietnam. Additionally, large crops are forecast for the U.S., EU-27, and Nigeria.” From US Department of Agriculture, World Agricultural Supply and Demand Estimates, 11 May 2010

In Nepal, food supplies are running low in the western hills. An IRIN report from Kathmandu (21 May 2010) says: “Food security for more than 600,000 people in the western hills of Nepal is set to deteriorate, aid agencies warn. With already low agricultural production in the more food-insecure areas, inflation is exacerbating matters further. “A lot of villagers are opting for more desperate coping mechanisms,” Richard Ragan, country representative for the World Food Programme (WFP), told IRIN in Kathmandu. Many villagers are already reducing the number of meals they eat each day, cutting portions, or migrating to urban areas or India for work, he said. ‘In a desperate attempt to buy food, families are even selling their livestock and household assets and the out-migration [to Nepali cities and India] has increased already by 40 percent,’ Ragan said.”

Gulmohur trees in bloom, May in Maharashtra

Gulmohur trees in bloom, May in Maharashtra

In Afghanistan, farmers face a tough choice: wheat, fruit or saffron? An IRIN report from Kabul (20 May 2010) says: “Pointing to his flourishing wheat field in the western Afghan province of Herat, Abdullah says he regrets cultivating the crop. Wheat is very cheap,” he told IRIN, adding that he would hardly make 50,000 Afghanis (about US$1,050) from his two hectares. “I won’t be able to feed my family properly with this income.” Several farmers contacted by IRIN in Helmand, Kandahar and Balkh provinces had similar sentiments. Wheat is considered a strategic crop and a staple food, but imports are always required, even when there is a bumper harvest. About seven million (over 24 percent of the country’s estimated 27 million population) are food-insecure and many others are highly vulnerable to food price fluctuations, according to aid agencies.”

Here is the announcement from the US Department of Agriculture: “US farmers, ranchers and producers are poised to achieve $104.5 billion in sales – an $8 billion increase over last year and the second highest level in history.

  • The trade surplus in agriculture is now forecast to reach $28 billion, the second highest ever achieved.
  • The report comes on the heels of an historic six-month pace by U.S. agricultural exports, which shattered records with $59 billion in sales in the first half of the fiscal year and generated a 14 percent increase over the same period last year.
  • U.S. agricultural exports to China grew by nearly $3 billion during the first half of the fiscal year to $10.6 billion, making China the United States’ top market for this period. In total, exports to Asia have reached record highs, led by strong increases in China and Southeast Asia. Other outstanding country and regional customers include the European Union, Turkey, and North Africa.”

Asia’s food-oil-inflation roller-coaster

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These people are already hit by the food price rise

In South-East Asia the price of Thai fragrant rice has surged by 26 per cent since 01 Nov 2009, thanks to storms in the Philippines and drought in southern China. At these levels, physical hoarding is seen taking place among Thai rice exporters, which means they probably have expectations that rice prices will go up even higher. And it is not just rice. Soya beans and edible oils like palm oil are also seeing a rise in prices, which in turn may make livestock more expensive since these crops go into animal feed.

Food prices are also rising in China – prices of vegetables shot up by as much as 10 per cent since 01 January 2010 as extreme cold weather damaged crops and transportation problems hampered delivery. Oil prices have been rallying in line with the global recovery, hitting levels above US$83 a barrel earlier this week, near a 15-month high. Food prices are also rebounding from their 2009 lows, potentially increasing price pressures in Asian countries that are already seeing asset bubbles build up.

Vegetable vendor

There’s already evidence from Kerala that the combination of food price rise specifically and inflation generally is hurting:

“The National Agricultural Cooperative Marketing Federation (Nafed) will join hands with the State government to implement an ‘Easy Market’ scheme to provide solace to consumers in the event of spiralling prices of essential commodities. The Union government has approved a subsidy of around Rs.600 crore [Rs 6 billion = US$ 133.34 million, Jan 2010] to provide ‘Easy Market’ kits containing 20 items of daily use to consumers at a discount ranging between 30 and 40 per cent. In Kerala, Nafed will use the Triveni and Neethi chain of stores to implement the scheme.
The scheme had been approved by a Cabinet sub-committee and 60 million kits would be distributed in the first phase. These kits contain rice, wheat, whole wheat flour, pulses, sugar, edible oil, etc, he said. Nafed would procure wheat and rice from the Food Corporation of India and distribute them at reasonable rates. Wheat flour would also be distributed similarly.”
Read more here.

Vegetable vendor

But elsewhere in India’s government mindspace, the ‘spend more’ school of thought is dreaming up still more schemes that have to do with food:

“Speaking at the National Retail Summit 2010 “Modern Retail: Towards Sustainable Growth and Profitability” Subodh Kant Sahai, Minister for Food Processing Industry, said that the Union Government is coming out with a series of initiatives to “increase the share of modern retail”. Sahai stated that the centre has planned to upgrade 70 cities in India by 2012 having all the modern facilities that of metros like Mumbai and Delhi. “With the amendment of the Agriculture Produce Market Act or the APMC act, farmers would become the largest beneficiaries. With 70 percent of our population also dependent on agriculture this would also get in 3rd party investors interested in Retail to patronize the farmers,” he said. According to Mr Sahai growth of the food processing industry is directly linked to the growth in retail industry.” Read more here.

Vegetable vendor

It’s typical that India’s administrators, planners, policymakers and legislators don’t bother to look around at the conditions of our fellow Southasians:

“Burma had been the world’s largest exporter of rice as recently as the 1930s, but rice exports fell by two thirds in the 1940s, with the country never again reclaiming its dominant status in the internatinal rice trade. Thailand and Vietnam now lead the world in rice exports. For fiscal year 1938/39, rice accounted for nearly 47 percent of Burma’s export receipts. However, by 2007/08 the corresponding figure had sunk to less than two percent. Dr. U Myint [an economist] said the reintegration of the rice industry into the world market would provide incentives to increase both the quantity and quality of rice and thereby lead to higher incomes and employment opportunities for the rural population, who constitute 65 percent of the population of 58 million. An estimated 31 million acres of land is cultivated in Burma, of which more than 16 million acres are devoted to rice.” Read more here.

Commodity chains took powerful shape in the steam age to give a large number of local products geographically expansive identities. Opium, jute, and indigo are prime examples of nineteenth century Bengal farm products generated by world markets where the ups and downs of prices impinged sharply on local experience in some locales but not others.

Tippoo's Dominions, 1794

“By 1900, commodity production defined South Asia as a region of the world economy, defined regions in South Asia, and defined localities in regions. Ceylon, Malaysia, Assam, Fiji and Mauritius were for plantations. Ceylon first produced coffee; then tea, rubber, cocoanut, and cinchona. Assam was tea country. Ceylon and Assam replaced China as top suppliers of English tea. Fiji and Mauritius meant sugar plantations. Labour supplies posed the major constraint for plantation capitalists who found the solution in eventually permanent indentured labour migration from labour export specialty areas in Bihar, Bengal, and southern Tamil districts.”

“Sites of commodity production demanded more commodities. Circuits of moving commodities linked commodity producers and consumers to one another in spaces that surpass the spatial imagination of national history. Modern Indian history has circulated in the space/time of capitalism, in the manner of globalization today, for over a century. Far-flung plantations in Malaysia, Fiji, Mauritius and the West Indies, as well as cities and farms in Burma and Africa developed circuits of commodity production and capital accumulation anchored in India. Tamil Chettiyars became local financiers on the rice frontier in Burma’s Irrawaddy River delta, which generated huge exports of rice for world consumers, including Indian cities that needed Burma rice so much that when Japan’s conquest of Burma cut rice exports, it precipitated the 1943-4 Bengal famine. In 1930, Indians composed almost half Rangoon’s population. In East and South Africa, Gujarati merchants and workers arriving from Bombay, Calcutta, and Madras provided labour and capital for railways and import-export dependent urbanism. The Indian diaspora was well underway a century ago: between 1896 and 1928, seventy-five percent of emigrants from Indian ports went to Ceylon and Malaya; ten percent, to Africa; nine percent, to the Caribbean; and the remaining six percent, to Fiji and Mauritius.”

From ‘Agricultural Production, South Asian History, and Development Studies’, edited by David Ludden, Oxford University Press, September 2004