Rice – scenario :: INDIA
68% of the world’s irrigated area is in Asia, and that
about half of this land is used for rice.
Rice is also the most important crop to millions of small
farmers who grow it on millions of hectares throughout the region, and to the
many landless workers who derive income from working on these farms.
Economic pressure is likely to move land, water, and
labor away from rice to other activities.
Under the Business as usual reference
scenario, the price of rice will increase almost 50% by 2025, and will continue
to increase, although at a slower pace, from 2025 to 2050.
Labor :: By far the main costs in rice
farming are land and labor, saving labor in rice cultivation has a price
because many poor laborers receive a substantial portion of their income
from available work in rice fields, and lower rice prices may force wages down.
In the short run, laborers will have difficulty finding new jobs. Rural-urban
migration are leading to rural labor shortages and higher rural labor wage
rates, further discouraging labor-intensive rice farming.
Rise of $ :: Most commodities, including crude oil
and grains are priced in U.S. dollars, but are purchased in the local currency.
The world market
price of rice in dollars is a poor indicator of profitability in the
domestic market. Inflation in the market drops the price of rice but if
the price doubles the domestic market shows a relatively no rise in price over
the past few decades.
Lower prices do not necessarily mean lower profitability.
The main factor driving the long-term decline in agricultural prices is
technological progress that contributes to a drop in the unit cost of
production.
Crude price :: Crude price will continue to
rise in future. Rise in crude price will lead to rise in cost of fertilizers
and insecticides needed to harvest the ‘Green revolution’ rice verities causing
the increase of expenditure of the farmer.
Insecticides and
fertilizers :: Reoccurring
pest outbreaks. - Many pests that caused major problems for rice
intensification programs in the 1970s and 1980s have returned as major threats
to production, primarily due to breakdowns in crop resistance and the excessive
use of broad-spectrum, long-residual insecticides that disrupt natural pest
control mechanisms.
Urban food habits :: At high levels of income, rice
becomes an inferior commodity, and consumers prefer diverse foods with more
protein and vitamins, such as vegetables, bread, fish and meat. Growing
urbanization that accompanies economic growth leads to changes in food habits
and the practice of eating away from home, which further reduces per capita
rice consumption.
Rise in retail price of
rice and its effects :: Rice retail food prices have increased
due to such reasons as increasing food demand, high crop prices, increasing
labor cost(excluding labor at rice field) and energy costs. These effects are
not likely to stop, and the same increases will be experienced in future. A rise in the price of rice is equivalent
to a drop in real income for the majority of the poor who are net consumers of
rice. Higher prices increase the number of poor people and push people deeper
into poverty and hunger, forcing them to sacrifice essentials such as more
nutritious food, health care, and children’s education—thus condemning future
generations to a vicious poverty cycle. The rice price will continue to rise because of low yield
growth and limited area expansion. Statistical analysis of these factors and other key
trends suggests that prices will remain near their current levels for the
medium term. The one possible countervailing factor is the long-term
slowdown in yield growth that has occurred throughout. If yield growth
continues to decelerate, and does so more quickly than population growth, per
capita production will begin to decline, and this may cause rice prices to rise
again.
Trade
Import/Export::
India is not a major
factor in determining world commodity prices at world market because they do
not trade. Increasingly
popular food in Africa, with imports into Africa accounting for almost
one-third of the total world trade. Latest trend of agricultural investment is
seen by Indian firms in African continent.
Rice farmers :: Despite the higher cultivation costs of modern rice
varieties has left the farmer poorer over the 40 years. Spending on education
or health care for their children is a luxury many rural poor cannot afford at
all. This condemns one generation after another to a prison of poverty and debt
reinforced by cost of farming on to the farmer. In turn, malnutrition
perpetuates poverty as it directly reduces the productive ability of those
afflicted. Lead to a reduction in rice area there as farmers switch to other
high-value crops. The High
wages elsewhere, small town boredom, changing mindset of rural population
towards city facilities, some may say but so is the believe that farming is low
status job unworthy of modern youth causing the youth to drift as hired workers provide the vast bulk
of labor to the cities.
Bio- fuel :: Rising
marketing costs (the difference between farm value and what consumers spend on
food) are accounting for an increasing share of retail food expenditures.
Higher and more volatile energy prices are quickly being passed onto the
consumer. At the same time, the share of retail food expenditures spent on farm
commodities is declining. Global economic conditions may result in continued
food inflation. Global crop stocks are at record lows due to crops being used
for non-food purposes. The use
of raw materials in the fast-growing bio-fuel industry for the production of
the petroleum-substitute ethanol
Population :: World population has more than doubled since the 1950s. .
It may increase another 3 billion before stabilizing in 2100. Population growth is outstripping production growth. Expanding global populations with
rising incomes are also cutting into global food supplies. This growth in
population and consumption could outpace the projected growth of agricultural
production and maintain high food inflation unless agricultural productivity is
boosted.
Real estate land
grabbing :: Over
the years little room for expansion of rice area. The possibility of increasing
the rice area is almost exhausted in most Asian countries. In many areas,
highly productive rice land has been lost to housing and industrial
development. The rice
area will remain at this level or decline in future because of scarcity and
competition from other agricultural and non-agricultural uses such as
industrialization and urbanization urbanization in spite of global rise in
stocks of rice production will fails to keep pace with demand growth.
