News / Asia

Analysts: Regional Cooperation Needed to Manage Asia Food Supply Shocks

A farmer harvests her damaged rice, October 20, 2010, in San Mariano township, two days after typhoon Megi (local name "Juan") barreled Isabela province and nearby provinces in northeastern Philippines
A farmer harvests her damaged rice, October 20, 2010, in San Mariano township, two days after typhoon Megi (local name "Juan") barreled Isabela province and nearby provinces in northeastern Philippines

Food prices are rising in Asia, and governments are taking various measures to keep them under control - from price ceilings to export restrictions. But uncoordinated government responses could exacerbate the situation.

Droughts, floods, shortages and increased demand have driven food prices in Asia higher in recent months. And experts say prices could jump even more as one of the world’s largest wheat growers, China, suffers from a dry spell.

As a result, some countries have taken measures to ensure their own supply. India has banned the sale of wheat overseas since 2007, and despite a bumper harvest this season, the government continues to stockpile wheat.

Food prices at "dangerous levels"

This week, the World Bank said food prices have hit "dangerous levels" and have pushed 44 million people into poverty. World Bank President Robert Zoellick urges governments to avoid banning exports or controlling prices, which he says would worsen the problem.

Katsuji Matsunami, a food security specialist at the Asian Development Bank in Manila, says the world is awakening to the danger of food supply vulnerability.

"The food supply system is vulnerable against climate extremes - droughts, floods and so on. In the last few decades, we’ve gotten enough money and all the might and knowledge, but we just simply didn’t do enough to flood-proof Asia’s vast flood plains or climate-proof small farmers from drought. We could have done that, but we didn’t do that," he said.

Agricultural policies partly to blame

Nagesh Kumar, chief economist of the United Nations Economics and Social Commission for Asia and the Pacific in Bangkok, says weak agricultural policies are also to blame.

"Supply has not been keeping pace with rising demand because of neglect of agriculture in government policies over the past two decades. And so agriculture productivity has stagnated," said Kumar.

Asia embraced the agricultural "Green Revolution" of the 1960s and 1970s. But agricultural productivity has generally diminished since then as more farm land was used for homes and factories to accommodate rising populations and industrialization.

According to an Asia Foundation food security report last year, agriculture’s share of the economies of Southeast Asia’s major farm producers - Indonesia, Thailand, the Philippines, Vietnam and Malaysia - has dropped from 38.6 percent in 1970 to 14.5 in 2007. In China, that number fell to 11 percent in 2007 from 35 percent in 1970.

Although the region is home to some of the world’s largest grains growers, more than 64 percent of the world’s undernourished people live here, too.

Governments take measures

In response to expected shortfalls, China pledged cash to farmers to irrigate wheat fields, plant wheat and corn, and treat crop disease. It also set aside $180 million for new equipment and more than $1 billion for drought alleviation.

China also imposed price controls for some food items to shield poor consumers from inflation - which reached 4.9 percent in January.

In Thailand, the government capped the price of cooking palm oil at $1.50 a liter, after floods sharply cut domestic production.

Kumar, however, says that while government intervention may be needed to help the poor, measures such as price controls may spur black market activity.

"If there is a sort of regulation, sort of monitoring along with price controls, it can be very effective, especially if prices are being driven by hoarding or speculation," said Kumar.

Need for coordinated actions

Individual government responses could exacerbate the situation. In early 2008, rice prices more than doubled. Cambodia, Vietnam, India and China, worried about supplies, cut rice exports. At the same time, rice-importing governments ordered large stocks in the international market, driving prices even higher.

Matsunami says there was no real reason for rice prices to skyrocket in 2008.

"Some experts say it was hoarding at every level… But I think more importantly there were various trade restrictive policies taken, export bans and things like that," he said.

So far, except for India, Asian governments have not restricted exports of important commodities. Indian wheat farmers are pressing the government to allow them to sell overseas, which could help increase global supply.

Rice prices are expected to moderate because of an ample harvest and lower demand from the region’s biggest buyer, the Philippines.

Matsunami says having adequate market information helps prevent price volatility. For example, he says the rice trade could benefit from better communication among governments about demand and supply.

"A major part of the rice trade being done within Southeast Asian region is among the Southeast Asian countries," he said. "Is there then a multilateral forum where rice importers and exporters sit together? They don’t have to share the greatest national secret. But can they just sit together and talk casually, ‘How do you see the outlook? How do you see your country’s rice market now?’ That kind of forum does not exist."

Regional food banks

Experts also push for the creation of regional food banks that nations can draw on at times of shortages as a way to prevent a sudden spike in prices.

The 10-member Association of Southeast Asian Nations, China, South Korea and Japan have established a rice reserve but only for emergency humanitarian needs.

The eight-member South Asian Association for Regional Cooperation has yet to make its regional food bank fully operational despite an agreement in 2007.



You May Like

Video Five Patients Given Experimental Ebola Drug Said To Be Improving

Experimental drugs have been tried on six people: three Westerners and now, three African pyhysicians More

Video In Ukraine, Fear and Distrust Remain Where Fighting has Stopped

As Ukrainian military reclaims control of eastern cities residents rebuild their lives, but many say everyone is being treated with suspicion More

Video In Rural Kenya, Pressure Builds Against Female Circumcision

Girls learn to object; FGM practitioners face penalties from jail sentences to stiff fines More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Five Patients Given Experimental Ebola Drug Said to Be Improvingi
X
Carol Pearson
August 19, 2014 11:43 PM
The World Health Organization has approved the use of experimental treatments for Ebola patients in West Africa. The Ebola outbreak there is unprecedented, the disease deadly. The number of people who have died from Ebola has surpassed 1,200. VOA's Carol Pearson reports on the ethical considerations of allowing experimental drugs to be used.
Video

Video Five Patients Given Experimental Ebola Drug Said to Be Improving

The World Health Organization has approved the use of experimental treatments for Ebola patients in West Africa. The Ebola outbreak there is unprecedented, the disease deadly. The number of people who have died from Ebola has surpassed 1,200. VOA's Carol Pearson reports on the ethical considerations of allowing experimental drugs to be used.
Video

Video In Ukraine, Fear and Distrust Remain Where Fighting has Stopped

As the Ukrainian military reclaims control of eastern cities from pro-Russian separatists, residents are getting a chance to rebuild their lives. VOA's Gabe Joselow reports from the town of Kramatorsk in Donetsk province, where a sense of fear is still in the air, and distrust of the government in Kyiv still runs deep.
Video

Video China Targets Overseas Assets of Corrupt Officials

As China presses forward with its anti-graft effort, authorities are targeting corrupt officials who have sent family members and assets overseas. The efforts have stirred up a debate at home on exactly how many officials take that route and how likely it is they will be caught. Rebecca Valli has this report.
Video

Video Leading The Fight Against Islamic State, Kurds Question Iraqi Future

Western countries including the United States have begun arming the Kurdish Peshmerga forces in northern Iraq to aid their battle against extremist Sunni militants from the Islamic State. But there are concerns that a heavily-armed Kurdistan Regional Government, or KRG, might seek to declare independence and cause the break-up of the Iraqi state. As Henry Ridgwell reports from London, the KRG says it will only seek greater autonomy from Baghdad.
Video

Video In Rural Kenya, Pressure Builds Against Female Circumcision

In some Kenyan communities, female genital mutilation remains a rite of passage. But activists are pushing back, with education for girls and with threats of punishment those who perform the circumcision. Mohammed Yusuf looks at the practice in the rural eastern community of Tharaka-Nithi.
Video

Video For Obama, Racial Violence is Personal Issue

The racial violence in the St. Louis suburb of Ferguson is presenting U.S. President Barack Obama with an issue to which he has a deep personal connection. To many Americans, Obama's election as America's first black president marked a turning point in race relations in the United States, and Obama has made ending the violence a policy priority. On Monday he issued a new call for calm and understanding. Luis Ramirez reports from the White House.
Video

Video Clinton-Obama Relationship Could Impact 2016 Election

President Barack Obama and former Secretary of State Hillary Clinton have a long and complicated relationship. That relationship took another turn recently when Clinton criticized the president’s foreign policy. VOA National Correspondent Jim Malone reports there is renewed attention on the Clinton-Obama relationship as Hillary Clinton considers running for
Video

Video Iran Looks to Maintain Influence in Baghdad With New Shia PM

Washington and Tehran share the goal of stopping Syrian-based militants in Iraq. But experts say it's Iran, not the United States, that will most influence how the new government in Baghdad approaches internal reforms and the war in Syria. VOA State Department Correspondent Scott Stearns has the story.

AppleAndroid