Quality production, greater efficiency seen as essential as world demand shifts
The Thailand Development Research Institute (TDRI) expects lower consumption, plantation area and prices for rice worldwide next year, while urging the government to speed up zoning for quality rice production.
Delivering a lecture on “The Future of Thai Rice on the Global Stage” yesterday, Nipon Poapongsakorn, a TDRI distinguished fellow, said that between 1990 and 2008, worldwide rice consumption per capita dropped by 0.11 percentage point, and even lower consumption figures are expected in the next 10-15 years.
The reduction is due to rising incomes, especially in Asia, along with urbanisation and changing lifestyles amid a slowdown in the growth of the world’s population, he said.
Based on a recent study, rice consumption across the world is projected to rise at a gradual pace from 430 million tonnes in 2008 to between 450 million and 470 million tonnes in 2020, he said. After that, rice consumption is forecast to drop to 360 million tonnes in 2050.
White rice is expected to become rarer in the market, while quality rice becomes more popular, if consumers’ incomes rise as projected. Some countries may stop importing white rice altogether.
Nipon said rice-plantation areas would likely shrink because of water shortages and higher costs in the future. To meet demand for rice and while keeping its prices affordable, the world’s rice production per rai needs to be increased, he said.
Offshore consumers have been buying more jasmine rice from Laos and Cambodia after Thai farmers cranked up production to cash in on the government’s pledging scheme, resulting in a decline in quality, he said. Thailand’s rice exports fell from 10 million tonnes in 2011 to 6.95 million tonnes last year.
“Thai farmers should combine rice fields for bigger plots and use machines to lower production costs. There’s no need for the rice pledging. In 2014, rice prices will trend lower as they follow the global prices,” Nipon said.
Yukol Limlamthong, the caretaker agriculture minister, said rice trading was expected to see higher competition as Asean countries, including Thailand, Vietnam, Laos, Cambodia and Myanmar, all aim to become leading producers.
Thailand may need to adjust to this rising competition, as rice production is as low as 300 kilograms per rai (1,875kg per hectare) in some areas, he said. Thailand’s average rice production is 509kg per rai.
The Ministry of Agriculture has a policy to promote zoning for rice production, and it is in the process of gathering data for each province, Yukol said. The plan includes establishment of basic infrastructure and irrigation systems for efficient rice production. Farmers may need to improve production of quality rice.
The government may need to improve transparency in the rice-pledging scheme, Nipon said, adding that an independent committee might have to be set up to monitor the government’s rice warehouses.
Previously, the government could not explain all the issues arising from the pledging programme and that could lead to corruption, Nipon said. Such issues include apparently missing rice stocks, uncertain financial accounting, and non-payment to farmers. These issues need to be settled, he said.
Kobsook Iamsuree, president of the Thai Rice Exporters Association, said the country had lost its export competitiveness, with the volume of rice exports declining continuously from previous years.
“The government’s rice-pledging scheme has resulted in high prices for Thai rice in the world market. The export problem has led to a huge volume of unreleased rice in the stockpiles. Many importing countries, such as the Philippines and Indonesia, have lost interest in Thai rice and shifted their orders to rival countries, such as Vietnam, that offer lower prices than Thailand,” Kobsook said.
Prasit Boonchey, chairman of the Thai Farmers Association, said farmers were burdened by very high plantation costs, and the government’s zoning policy would not do anything about reducing costs.
First published: The Nation, December 17, 2013