mmm

FAQ on Rice crisis
 

1. What is actually responsible for the increasing price of rice?

2. Where can the NERICA come in to alleviate the problem?

3. As an institute, what is your opinion on bringing down the price of rice?

4. There was news some months back on genetically modified rice. Does the current increase in price of rice have anything to do with this type of rice found in countries like Nigeria and Ghana?

1. What is actually responsible for the increasing price of rice?

• Many factors explain the current high price of rice. First of all, since 2002 the global rice production level has fallen short of consumption, requiring continuous appeals to the world's reserves to bridge the gap between supply and aggregate demand. The drawdown of globally held rice stocks to compensate for production shortfall has resulted in their gradual decline from 147.3 million tonnes in 2001 to 74.1 million tonnes in 2008.
   

• A compounding factor has been the exports ban and barriers by major players. In July and October 2007, Vietnam and India respectively, the second and third largest rice exporters banned rice supply on the world market in an attempt to contain soaring prices in their domestic markets and to replenish their security stocks. Since January 2008, these two countries have been emulated by Cambodia and Egypt which have also banned rice exports. Other countries such as China and Argentina have greatly increased export taxes and other barriers to rice exportations. In a notoriously thin and segmented international rice market, such barriers to trade exacerbated significantly rice supply shortage and price variability.
   

• Other contributing factors are the rising price of oil and freight, depreciation of the US dollar, additional pressure on agricultural resources because of biofuel production etc.

2. Where can the NERICA come in to alleviate the problem?

• Greater availability and access of rice seeds of improved varieties such as upland and lowland NERICA and Sahel varieties for the irrigated conditions using an integrated approach could help alleviate the pressure on domestic demand. Some of the NERICA varieties because of their adaptation to the local stresses and short growth duration which permit double cropping are popular with farmers.
   

• However, it must be clear that NERICA and other improved varieties are an important component – indeed the basis of rice production – but they have to be put in the right setting. This includes improved access to credit, seed, mineral fertilizer and farm machinery (for land preparation and harvest and post-harvest practices); diffusion of best-bet knowledge on rice management options, enhanced infrastructure (roads, water control), improved links between rice production, processing and marketing and an enabling policy environment.
   

• WARDA intends to facilitate and provide technical assistance to national agricultural research systems (NARS) to produce foundation seed and certified seed of major improved varieties for the three main rice ecologies (upland, rainfed lowland and irrigated lowland).

3. As an institute, what is your opinion on bringing down the price of rice?

• Our option for bringing down the price of rice rests essentially on the development through the increase of domestic rice production. Both short-term palliative measures and medium- to long-term sectoral development measures are needed. Short-term measures include the reduction of customs duties and taxes on imports in rice as well as the promotion of greater access to seed and other critical inputs such as fertilizer, pesticide, agricultural credit and farm machinery to raise the productivity of rice farmers.
   

• Government should ensure that measures such as exemption from customs duties and taxes on imports of rice are limited in time in order not to impede the competitiveness of local production.
   

• In the medium- and long-term, tax on all critical inputs, on-farm cost-saving agricultural machinery and equipments and post-harvest technologies for all players along the rice supply chain need to be reduced. Governments have also key roles to play in facilitating access to financial services and credit for stakeholders in domestic rice sector; increase investment in water control technologies; expand the rice areas under irrigation; increase investment in regional research capacity to support the development of rice varieties resistant to major pests and diseases and sufficiently robust to withstand drought and climate change induced shocks; and accelerate the rhythm of investment in rural infrastructure as road, transport, storage facility communication infrastructure should enhance rice farmers’ capacity to response to market signals and improve their access to market.

4. There was news some months back on genetically modified rice. Does the current increase in price of rice have anything to do with this type of rice found in countries like Nigeria and Ghana?

• No, there is no link. There is no GMO rice cultivated in sub-Saharan Africa (SSA). All rice varieties cultivated in SSA are normal rice varieties (bred through conventional breeding methods).