The Return of the Asian Food Crisis – What is happening and why?

Magnus Jirström Associate Professor, Department of Social and Economic Geography, Lund University.

Soaring rice prices, growing food lines, angry voters and even food riots are again realities in Asia. More than 30 years have passed since the global food crisis of the mid-1970s hit Asia. In the Philippines, President Gloria Macapagal-Arroyo is presently facing a situation reminding of the one her father, President Diodado Macapagal, was preoccupied with in the mid-1960s. Then as now, the country experienced major shortages in its staple crop rice and was relying heavily on imports. Some observers claim that the inability of Macapagal’s regime during the first half of the 1960s to avoid food scarcity contributed to its failure to be re-elected in the 1965 election when instead Ferdinand Marcos came to power (Djurfeldt & Jirström 2005). Presently, the Philippines, being one of the world’s largest importers annually importing 10-15% of it rice, is at the centre of the Asian food crisis. In April 2008, the Arroyo government threatened rice hoarders with life imprisonment.

The rising cost of rice is affecting consumers differently across Asia, but, as always, it is the poor, who often spend 30-40% of their incomes on rice alone, that are most severely hit. Not only in importing countries such as the Philippines, Bangladesh and Malaysia (and of course in Africa where the consumption and import of rice has increased rapidly during past decades) does the soaring price cause hardship. Also in exporting countries such as India and Vietnam, the price hike implies prospects of increasing rates of malnutrition for the poorest. Government budgets are being stretched to pay for food subsidies and food inflation is causing political concern. As was the case in the 1960s and 1970s, many Asian governments are keeping a close watch on the rice price as a measure of potential unrest. Between December 2007 and April 2008, the world price of Thai rice, 5% broken, – a popular export grade – almost tripled from approximately USD 360 per ton to USD 1000.

Partly, the current price hike is caused by export restrictions introduced by some of the major exporters such as Vietnam and India. Although criticized for taking these measures by for example the Asian Development Bank, governments in populous countries with a large share of their population being dependent on a stable and low price of rice consider the political risk associated with food scarcity as too important to refrain from market interventions. Rice continues to be a political commodity in Asia.

The international rice market, unlike the wheat market, is a rather thin commodity market with only approximately 5-7% of total production entering it. Sudden changes in supply or demand may consequently cause substantial price changes. Over the past 7-8 years, the rice stocks of major countries such as China and India have been gradually depleted and while this has moderated the rise in price during recent years, we cannot expect this dampening effect on the price in the future. Adding to the short-term changes in supply is a number of contributing factors: the collapse of Australia’s rice production due to drought, the major flooding in Bangladesh in 2007, the rise in the price of oil affecting the price of fertilizers – which is essential for rice production, – as well as motorized farm operations and transportation, and, finally, severe pest and disease outbreaks since 2005 in countries such as Vietnam, China, Indonesia and Japan. In addition, the price of rice is affected by the increasing price of other staple crops. An important factor at play is the ongoing diversion of agricultural land from food and feed production to bio-fuel production, especially the maize-based ethanol production in the USA. On the demand side, big speculations in the international commodity markets by new financial players abandoning stocks and real estate are throwing fuel on the fire. In several countries hoarding by traders for speculative purposes has a similar effect.

However, to understand the present situation it is important to look at some of the underlying long-term reasons for the rice crisis. Starting in the mid-1960s, the Green Revolution which combined the introduction of modern high-yielding rice technology with agricultural policies promoting rapid agricultural growth set Asia on a steady and rapid growth track in staple crop production. The production success was so dramatic that after 20 years of rapid output growth, the world market price of rice plummeted in the mid-1980s and then continued to decline until 2001. During this period a feeling of complacency seems to have spread among governments in the region – food security at a national level seemed to be less of a problem and lower prices were taken for granted. Public investments, including those by international donors, in agricultural research development dropped steadily during this period. The lack of investment is an important factor accounting for the slowdown in yield growth.

Presently, we are consuming more rice than we are producing. Population growth in rice consuming countries is part of the explanation but an even more important factor is the income driven growth in demand for cereals for both consumption and livestock production in booming economies such as China and India. These long term reasons behind the present situation call for a renewed focus on agricultural development in the region. Any increase in production will have to come through yield growth as the opportunity for increasing the total rice area is very limited. The competition for land and water resources with other sectors of the economies will be a major challenge in what many now call for – a second Green Revolution in Asia.

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Djurfeldt G and Jirström M (2005) “The puzzle of the policy shift – The early Green Revolution in India, Indonesia and the Philippines” in Djurfeldt G, Holmen H, Jirström M and Larsson R (eds.) (2005) The African Food Crisis: Lessons from the Asian Green Revolution. CABI Publishing, Wallingford, pp 43-63.


THE POLITICAL PARANOIA OF THE BURMESE GENERALS

By Mikael Gravers

 

Why is it so difficult to get international aid into Burma and to help the survivors of the cyclone? And why is the regime afraid of foreign humanitarian assistance?

Sr. General Than Shwe and the junta are possessed by a genuine fear that ‘neo-colonial elements’ will use the disaster to undermine their power, install a pro-western rule headed by Daw Aung San Suu Kyi, and control Burma’s natural resources. The generals also know that many Burmese would like to take revenge for decades of sufferings, killings of monks, torture, organized rape, burning of villages and churches, forces labour, forced resettlements, internal displacements, closed universities, corruption and economic bankruptcy all of which has hit a majority of the population. Thus, the generals focus 100% on keeping control of the situation and maintaining power. They fear that any small crack in their huge power controlling ‘firewall’ can lead to the demolition of their entire infamous Panoptikon. Every Burmese is under strict surveillance in their homes, at work, and in their movements and activities. The regime’s front organization, the Union Solidarity and Development Organization (USDA), numbering more than 20 million, force the majority into a profound dissimulation when they are called to attend mass meetings and listen to the simple propaganda of the regime, as for example on the ‘success’ that 99% voted at the recent constitutional referendum and that 92,6% voted yes.

 The generals are widely believed to use astrology before taking any major decision such as moving the administration to the new capital Naypyidaw. Than Shwe imitates the Burmese royal rule and act as a universal ruler (cakkavattin) who uses the necessary force in order to keep the Union of Burma and its weak state from fragmenting into ethnic states and from being destabilized by ‘internal & external destructive elements’ (read: the opposition & the West). Democracy is a Western cultural construction and not compatible with Burman culture, according to the generals. Their new constitution promotes ‘discipline-flourishing democracy’ – a ‘fuehrer-democracy’ (cf. Max Weber) with the Tamadaw (the army) in full control of al institutions, positions and national modules, including culture and history. Their system of control is sadly or ironically is a mimicry of George Orwell’s Nighteen Eighty Four: “Who controls the past controls the future: Who controls the present controls the past”. Any resistance merely a confirms the generals in their world view.

 Than Shwe and most of the generals have little experience with the outside world.  Their general education is so limited and their worldview so xenophobic that normal international dialog and compromising is more or less impossible. They can only act unitarily and they guard each other in order to preserve unity and consensus.. Any internal critique is dangerous and will be seen as disloyalty. Many officers are believed to be very critical of the lack of assistance to the cyclone victims, which includes relatives and families of the army. But they have to be careful before. Than Shwe removed his rival Khin Nyunt in 2004, including his staff in the Military Intelligence and his astrologer as well! Maintaining army solidarity is synonymous to maintain the national sovereignty and solidarity. Khin Nyunt had good relations with ethnic organizations and was more skilled in communicating internationally and thus increasingly seen as a threat to Than Shwe’s power. So, when Than Shwe hear any small sound of cracking he promptly acts in order to stop a possible collapse of his power.

 

Rumours, distorted information and fear are a consequence of this autocratic rule and produce more fear, which again generates the political paranoia – the fear of loosing power. When a US warship anchors up near Burma’s cost is can start a flood of rumours of an imminent international intervention. In recent days the generals have criticized foreign journalist of giving a distorted picture of the regime’s assistance to the victims. In the minds of the generals the outside world is hostile and has to be kept away in order to avoid destabilization

If the international community wants to cooperate with the regime on human security it has to understand the roots of the political paranoia which goes back in the colonial and post-colonial situation and realize that the generals will never compromise unless the are recognized fully as the rulers of Burma. Sanctions will not make them surrender – on the contrary, sanctions are neo-colonial interventions and  increase the paranoia, infortunately.