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Nigeria’s economy remains hooked on oil revenues, but its government is hoping agriculture might help ween it off. Around Davos this week, president Goodluck Jonathan has been talking up the sector, announcing production increases of 8m tonnes during 2012. This sounds impressive, but behind the numbers lie an array of problems.
After more than 30 years at the top, Thailand has lost its spot to India as the world’s number one rice exporter, slipping to third place last year due largely to a controversial government farm subsidy policy.
Elections tend to be won by governments that give the people what they think they want. Thailand’s rice farmers think they want to be paid well over the odds for rice they sell to the government – and that is what has been happening under the administration of prime minister Yingluck Shinawatra since she swept to power last year.
Droughts in the US have led to prices for corn and soy hitting record levels in recent weeks, and talk of a new world food crisis abounds. Previous price spikes in 2008 and 2010-11 created shockwaves throughout the developing world, leading to riots in more than 30 countries and, some argue, acting as a catalyst of the Arab Spring.
India needn’t be all that anxious about Iran’s default on payments for rice imports, as neighbouring Iraq is set to boost its own imports of premium quality aromatic rice from the world’s third-largest exporter of the grain.
With the value of rice exports to the once war-torn country tripling to $28m in the past three years, Indian industry members told beyondbrics they were very optimistic about Iraq’s potential as an export destination, in spite of the often precarious security situation there.
Rice is more than just another commodity: for 3bn people it is a vital part of their daily diet, and when prices hit over $600 a tonne, or some 50 per cent above their 10 year average, they start to worry.
The 10-year average for Thailand’s benchmark 100 per cent grade B white rice is around $400 a tonne but today it is selling for $619 a tonne. That is partly because Thailand, the world’s biggest exporter, has said that it would pay its farmers Bt14,800/tonne – equivalent of about $800/tonne in the export market, in a move aimed at boosting the incomes of rural farmers.