Dry spell in Australia leads to rice shortage, doubling prices

Dry spell in Australia leads to rice shortage, doubling prices
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First Published: Thu, Apr 17 2008. 11 28 PM IST

Scarce resources: Sheep in Australia are travelling long distances in search of water and feed. Scientists see the drought’s impact on rice an early sign of the warming planet’s effect on food product
Scarce resources: Sheep in Australia are travelling long distances in search of water and feed. Scientists see the drought’s impact on rice an early sign of the warming planet’s effect on food product
Updated: Thu, Apr 17 2008. 11 28 PM IST
Deniliquin, Australia: The mayor of this dusty southern Australian town, Lindsay Renwick, remembers the constant whirl of the rice mill. “It was our little heartbeat out there, tickety-tick-tickety,” he said, imitating the giant fans that dried the rice, “and now it has stopped.”
Scarce resources: Sheep in Australia are travelling long distances in search of water and feed. Scientists see the drought’s impact on rice an early sign of the warming planet’s effect on food production.
The Deniliquin mill, the largest rice mill in the Southern Hemisphere, once processed enough grain to satisfy the daily needs of 20 million people. But six long years of drought have taken a toll, reducing Australia’s rice crop by 98% and leading to the mothballing of the mill last December.
Ten thousand miles separate the mill’s hushed rows of oversized silos and sheds—beige, gray and now empty—from the riotous streets of Port-au-Prince, Haiti, but a widening global crisis unites them.
The collapse of Australia’s rice production is one of several factors contributing to a doubling of rice prices in the last three months—increases that have led the world’s largest exporters to restrict exports severely, spurred panicked hoarding in Hong Kong and the Philippines, and set off violent protests in countries including Cameroon, Egypt, Ethiopia, Haiti, Indonesia, Italy, Ivory Coast, Mauritania, the Philippines, Thailand, Uzbekistan and Yemen.
Drought affects every agricultural industry based here, not just rice—from sheepherding, the other mainstay in this dusty land, to the cultivation of wine grapes, the fastest growing crop here, with that expansion often coming at the expense of rice.
The drought’s effect on rice has produced the greatest impact on the rest of the world, so far. It is one factor contributing to skyrocketing prices, and many scientists believe it is among the earliest signs that a warming planet is starting to affect food production.
While a link between short-term changes in weather and long-term climate change is not certain, the unusually severe drought is consistent with what climatologists predict will be a problem of increasing frequency.
Indeed, the chief executive of the National Farmers’ Federation in Australia, Ben Fargher, says, “Climate change is potentially the biggest risk to Australian agriculture.”
Drought has already spurred significant changes in Australia’s agricultural heartland. Some farmers are abandoning rice, which requires large amounts of water, to plant less water-intensive crops such as wheat or, especially here in southeastern Australia, wine grapes. Other rice farmers have sold their fields or their water rights, usually to grape growers.
Scientists and economists worry that the reallocation of scarce water resources—away from rice and other grains and toward more lucrative crops and livestock—threatens poor countries that import rice as a dietary staple.
The global agricultural crisis is threatening to become a political one, pitting the US and other developed countries against the developing world over the need for affordable food versus the need for renewable energy.
Many poorer nations worry that subsidies from rich countries to support biofuels, which turn food, such as corn, into fuel, are pushing up the price of staples.
The World Bank and the United Nations Educational, Scientific and Cultural Organization (Unesco) both called on major agricultural countries to overhaul policies to avoid a social explosion from rising food prices.
With rice, which is not used to make biofuel, the problem is availability. Even in normal times, little of the world’s rice is actually exported—more than 90% is consumed in the countries where it is grown. In the last quarter-century, rice consumption has outpaced production, with global reserves plunging by half just since 2000.
Current economic uncertainty has led producers to hoard rice and speculators and investors even see it as a lucrative, or at least safe, investment.
All these factors have made countries that buy rice on the global market vulnerable to extreme price swings.
Senegal and Haiti each import four-fifths of their rice. And both have faced mounting unrest as prices have increased.
Police suppressed violent demonstrations in Dakar on 30 March, and unrest has spread to other rice-dependent nations in West Africa, notably Ivory Coast. Haitian President René Préval, after a week of riots, announced subsidies for rice buyers on Saturday.
Scientists expect the problem to worsen in the decades ahead.
The Intergovernmental Panel on Climate Change, set up by the United Nations, predicted last year that even slight warming would decrease agricultural output in tropical and subtropical countries.
Moderate warming could benefit crop and pasture yields in countries far from the Equator, such as Canada and Russia. In fact, the net effect of moderate warming is likely to be higher total food production around the world in the next several decades.
But the scientists said the effect would be uneven, and enormous quantities of food would need to be shipped from areas farther from the Equator to feed the populations of often less-affluent countries closer to the Equator.
The panel predicted that even greater warming, which might happen by late in this century if few or no limits are placed on greenhouse gas emissions, would hurt total food output and cripple crops in many countries.
Survival techniques
For farmers in a richer nation like Australia the effects of the current drought are already significant.
The rice farmers who do not give up and sell their land or water rights are experimenting with varieties or techniques that require less water. Australia now has some of the world’s highest rice yields for a given quantity of water.
Still, Australia’s total rice capacity has declined by about a third because many farmers have permanently sold water rights, mostly for grape production. And production last year was far lower because of a severe shortage of water; rice farmers received one-eighth of the water they are usually promised by the government.
The accidental beneficiaries of these conditions have been the farmers who grow wine grapes in the same river basin where the Deniliquin mill stands silent.
Even with the recent doubling of rice prices, to around $1,000 (Rs40,000) a tonne for the high grades produced by Australia, it is even more profitable to grow wine grapes.
All told, wine grapes produce a pretax profit of close to $2,000 an acre while rice produces a pretax profit around $240 an acre.
Seeking hardier rice
Researchers are looking for solutions to global rice shortages—for example, rice that blooms earlier in the day, when it is cooler, to counter global warming. Rice plants that happen to bloom on hot days are less likely to produce grains of rice, a difficulty that is already starting to emerge in inland areas of China and other Asian countries as temperatures begin to climb.
“There will be problems very soon unless we have new varieties of rice in place,” said Reiner Wassmann, climate change coordinator at the International Rice Research Institute near Manila, a leader in developing higher-yielding strains of rice for nearly half a century.
The recent reports of the Intergovernmental Panel on Climate Change carried an important caveat that could make the news even worse: the panel said that existing models for the effects of climate change on agriculture did not yet include newer findings that global warming could reduce rainfall and make it more variable.
Many agronomists contend that changes in the timing and amount of rain are more important for crops than temperature changes. Rajendra Pachauri, chairman of the panel, said long-range climate forecasts for precipitation would require another five to 20 years of research, depending on the region.
In addition to drought, climate change could also produce more extreme weather, more outbreaks of pests and weeds, and changes in sea level as polar ices melts.
Most of the world’s increase in rice production over the last quarter-century has occurred close to sea level, in the deltas of rivers such as the Mekong in Vietnam, Chao Phraya in Thailand and Ganges-Brahmaputra in Bangladesh.
Yet the effects of climate change are not uniformly bad for rice. Rising concentrations of carbon dioxide, the main greenhouse gas, can actually help rice plants and other crops—although the effect dwindles or disappears if the plants face excessive heat, inadequate water, severe pollution or other stresses.
Still, the flexibility of farmers and ranchers here has persuaded some climate experts that, particularly in developed countries, the effects of climate change may be mitigated, if not completely avoided.
“I’m not as pessimistic as most people,” said Will Steffen, the director of the Fenner School of Environment and Society at Australian National University. “Farmers are learning how to do things differently.”
Meanwhile, changes like the use of water to grow wine grapes instead of rice carry their own costs, as the developing world is discovering.
“Rice is a staple food,” said Graeme Haley, the general manager of the town of Deniliquin. “Chardonnay is not.”
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First Published: Thu, Apr 17 2008. 11 28 PM IST
More Topics: Australia | Rice | Prices | Water | Farmers |