Rice’s rise

Jan 18, 2009 Features / Columnists, Ravi Dev

---

Amidst the gloom of the travails of the sugarcane industry, the news that rice had garnered the highest dollar value in the 100th year that the industry has been exporting is very welcome for the agricultural sector – and for Guyana.

Most welcome was the average price earned. In 2007, we had exported a whopping 250,000 tonnes of rice but earned only US$75 million while last year, the 196,000 tonnes shipped out raked in US$118 million. This works out to an average price of US$300 per tonne in 2007, compared to US$601 per tonne in 2008 – a doubling of the export price!

Of course, the exponential rise in export prices was a consequence of a shortfall in world production, which in turn led to a spike in prices – up to over US$1000 per tonne a year ago. While the markets subsided somewhat in the latter part of the year, it was still almost double the 2007 price – US$575.

The International Rice Research Institute (IRRI) predicted last Friday that prices should rise sharply once again this year, paradoxically, as farmers react to the recent drop in prices, tighter credits, and the stubborn rise in inputs prices by reducing their acreage cultivated in the present crop.

But as the global economic slowdown continues to kick in, “the demand for rice in developing countries as falling income forces poor people to switch back to less expensive staples” should push prices upwards once more.

Adding to the impact of that rise is the fact that global production has fallen behind consumption in five of the last seven years and most countries have delved very deeply into their reserve stocks – which is very low at present. Demand will have to be satisfied from new production.

Our analysis of the global food situation back in 2000 had predicted a rising demand for rice as the major consuming countries improved their economic performances and the income of their citizenry. We proposed in 2001 that Guyana should craft a strategic plan for rice – as it had done for sugar – which should set a production target of 1,000,000 tonnes by 2020. We still believe in the need for a strategic plan.

Most of the increase in the world’s production in the last two decades has come from increased acreage rather than increased productivity – but most of the big rice-producing countries do not have enough suitable new lands to maintain the old rate of growth much less cater for a larger than expected rise in consumption. In Guyana, however, as the President reminded us at the rice export commemoration activities, we do have the available acreage.

Ninety percent of our present average farm acreage is less than fifteen acres – with probably fifty percent less than five acres. The present level of mechanisation for this kind of farm size is tremendously overcapitalised and it actually encourages a low level of coordination in block cultivation.

Opening up new lands and giving priority to present small farmers would lead to a more efficient utilization of machines and – combined with a programme of enforced bloc cultivation – could see a reduction of production costs. Fertiliser costs will always be a major factor.

In the near term, as we get to a firmer footing on increased acreage, the drop in natural gas prices – which is a key component of nitrogenous fertilizers – should help. Fertilizer needs to be imported in very large quantities – at least 25,000 tonnes per shipment, we were informed – and this has stymied the efforts of farmers over the years, including their representatives, the RPA, to get into the business and lower the costs.

We had suggested that since GuySuCo also needs to bring the costs of their fertilizers down, an autonomous government entity be established to import and distribute fertilizers for both industries – and do so at the lowest possible costs. In the long term, the new varieties of rice that are in the international pipeline to address the problem of decreasing yields must be integrated into our local research programme – which has already been expanded.

The key constraint, of course – the elephant in the room – is the drainage and irrigation system. Some might say that if we cannot maintain the present system, how would we deal with an enlarged one? Well, the present problem with maintaining the D&I system is money and manpower – with the latter actually dependent on the former.

A doubling of the acreage for rice would spread the costs of an effective D&I system and would justify an increase in funding for the service. If we are going to continue with agriculture on the coastland – and we will have to for at least the next century – then we might as well be hanged for a sheep than a lamb.

The D&I system will need to be boosted and probably be separated from the Ministry of Agriculture, which already has enough on its plate with sugar, “other crops” and rice – even if the last is not expanded. Its work should be more closely integrated with the Ministry of Works so that it would be more au fait with other developments that impact on its bailiwick.

We understand, for instance, that when the commendable effort to rehabilitate all the bridges on the East Coast was executed, lack of proper coordination resulted in all the culverts being built higher than the optimum depth so that effective bars have been created in all the outfalls at the Public Road.

The President has mentioned the future impact of challenges incident to climate change and has suggested a diversification by rice farmers into fish farming. There was some work done in this area when the late Sash Sawh was Minister of Agriculture and we need an official update as to the results.

Our observation was that our rice farmers, by and large, were not too gung-ho about the completely different practices necessary to make the new venture successful. The learning curve has proven to be too steep for farmers who were primarily concerned about their rice crops .

We believe that the Ministry of Agriculture should encourage fish farming as a completely distinct and separate venture and we are sure that the gains predicted by the President would be forthcoming.
Rice, however, must be facilitated to continue rising.

---

---