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
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

French Refugee Drama Wins Cannes Top Prize

Dheepan is about a group of Sri Lankan refugees who pretend to be a family in order to flee their war-torn country for a housing project in France More

Photogallery Crisis in Macedonia Requires Meaningful and Swift Measures

The international community has called on Macedonian leadership to take concrete measures in support of democracy in order to exit the crisis More

Activists: IS Executes 217 Civilians, Soldiers Near Palmyra

British-based Syrian Observatory for Human Rights on Sunday said the victims include nurses, women, children and Syrian government fighters 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.
Turkey's Main Opposition Party Hopes for Election Breakthroughi
X
May 22, 2015 10:23 AM
Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Turkey's Main Opposition Party Hopes for Election Breakthrough

Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Europe Follows US Lead in Tackling ‘Conflict Minerals’

Metals mined from conflict zones in places like the Democratic Republic of Congo are often sold by warlords to buy weapons. This week European lawmakers voted to force manufacturers to prove that their supply chains are not inadvertently fueling conflicts and human rights abuses. Henry Ridgwell reports from London.
Video

Video Class Tackles Questions of Race, Discrimination

Unrest in some U.S. cities is more than just a trending news item at Ladue Middle School in St. Louis, Missouri. As VOA’s Kane Farabaugh reports, it’s a focus of a multicultural studies class engaging students in wide-ranging discussions about racial tensions and police aggression.
Video

Video Mind-Controlled Prosthetics Are Getting Closer

Scientists and engineers are making substantial advances towards the ultimate goal in prosthetics – creation of limbs that can be controlled by the wearer’s mind. Thanks to sophisticated sensors capable of picking up the brain’s signals, an amputee in Iceland is literally bringing us one step closer to that goal. VOA’s George Putic reports.
Video

Video Afghan Economy Sinks As Foreign Troops Depart

As international troops prepare to leave Afghanistan, and many foreign aid groups follow, Afghans are grappling with how the exodus will affect the country's fragile economy. Ayesha Tanzeem reports from the Afghan capital, Kabul.
Video

Video Poverty, Ignorance Force Underage Girls Into Marriage

The recent marriage of a 17-year old Chechen girl to a local police chief who was 30 years older and already had a wife caused an outcry in Russia and beyond. The bride was reportedly forced to marry and her parents were intimidated into giving their consent. The union spotlighted yet again the plight of many underage girls in developing countries. Zlatica Hoke reports poverty, ignorance and fear are behind the practice, especially in Asia and Africa.
Video

Video South Korea Marks Gwangju Uprising Anniversary

South Korea this week marked the 35th anniversary of a protest that turned deadly. The Gwangju Uprising is credited with starting the country’s democratic revolution after it was violently quelled by South Korea’s former military rulers. But as Jason Strother reports, some observers worry that democracy has recently been eroded.
Video

Video California’s Water System Not Created To Handle Current Drought

The drought in California is moving into its fourth year. While the state's governor is mandating a reduction in urban water use, most of the water used in California is for agriculture. But both city dwellers and farmers are feeling the impact of the drought. Some experts say the state’s water system was not created to handle long periods of drought. Elizabeth Lee reports from Ventura County, an agricultural region just northwest of Los Angeles.
Video

Video How to Clone a Mammoth: The Science of De-Extinction

An international team of scientists has sequenced the complete genome of the woolly mammoth. Led by the Swedish Museum of Natural History in Stockholm, the work opens the door to recreate the huge herbivore, which last roamed the Earth 4,000 years ago. VOA’s Rosanne Skirble considers the science of de-extinction and its place on the planet
Video

Video Blind Boy Defines His Life with Music

Cole Moran was born blind. He also has cognitive delays and other birth defects. He has to learn everything by ear. Nevertheless, the 12-year-old has had an insatiable love for music since he was born. VOA’s June Soh introduces us to the young phenomenal harmonica player.

VOA Blogs