Rising rice prices not caused by biofuels

Many people have been fast to blame food shortages around the world on government acceptance of biofuels. There do seem to be some connections, but it’s not as simple as it sounds.
Rice, wheat, and corn/soy need completely different soils and climates. That’s why we see a lot of corn and soy grown in Iowa and Illinois, rice in California, and wheat in Kansas. The first generation (or seed based) biofuels have focused on corn, soy, and rapeseed in Europe. None of these grow where rice can grow. Therefore, the amount of rice planted and harvested has nothing to do with land prices or a move to biofuel crops.
Some people have said that the rising costs of corn have caused people to buy rice instead. I can imagine this happening in cultures where both starches are used (such as Mexico and South America) but corn has never been a staple food in south east Asia.
So, what is causing the rice shortage? Rising fuel costs have also increased the prices of agricultural inputs fertilizer and pesticide. Withholding these inputs can cause decreased yield. Floods have wiped out rice fields through force, and rice plants submerged for more than a few days will die. Increased demand without an increase of supply will of course cause a shortage as well.
I’m certainly not the first person to make the disconnection between the rice shortage and biofuels. Philip Bowring of the International Herald Tribune writes:

Some of the immediate causes of the price spike for rice are similar to that of other crops. The cost of fertilizer, closely related to energy, is the most obvious. Futures speculation by financial intermediaries may also have played a part – though rice futures trading is small compared with other major crops.

But biofuels cannot be blamed because rice is not used for them. Nor has there been any major harvest setback among the top Asian producers. Instead, we are now seeing the impact of a series of longer term trends, some of which probably cannot be reversed. In no particular order these are:

Almost zero growth in land suitable for rice production. Soybeans, corn and wheat acreage can expand in South America or in North America and Europe. Rice – which ideally requires flat land, lots of water and a warm climate – has no equivalent.

Indeed, rice bowl areas of China, South Asia and Southeast Asia are losing land to urbanization and in some cases to salination caused by dams built for hydroelectric purposes and other reasons.

Bowring says that global rice prices were depressed by subsidy programs for rice farmers in the US, India, and some other countries artificially lowered the price of rice. Cheap rice has encouraged some cultures to abandon their traditional starch sources, increasing overall rice demand.
A beautifully written article by Mong Palatino at UPI Asia Online describes the historical origins of the rice shortage in the Philippines specifically. Mong says on his blog that the World Bank discouraged the government of the Philippines from providing subsidies for rice farmers, even though the country is the world’s biggest rice importer. Farmers there choose to plant the aptly named cash crops instead of rice. Mong says:

The global rice crisis is an opportunity to review the food security programs of Southeast Asian nations. What steps are being taken to mitigate hunger in the region? What are the reform measures which should be implemented to improve agricultural productivity?

Now is also the time to minimize or even abandon the planting of biofuels or agrofuels in Southeast Asia. Rice and food production should be prioritized.

I agree. Food should definitely come first, and all countries of the world should work to improve rice yields in Southeast Asia. Hopefully, they will use a combination of genetic engineering and organic cultivation methods. Changes in government policies are paramount to solving these food security problems. A unique aid program called the Millennium Challenge Corporation has pledged $21 million to reduce corruption in the Philippines. Once that is accomplished, the program will help the country develop a plan to improve agriculture and infrastructure. The MCC is also working to decrease corruption in Indonesia.
Bowring concludes his editorial by saying:

The current hand-wringing by international agencies and grandstanding by politicians is worthless without a better understanding of the factors behind the rice situation and the anti-market forces that have held back production and enhanced consumption.

It seems to me that the understanding is out there, in sources as diverse as an Asian correspondent for a major British newspaper and a youth activist blogger from the Philippines.
Note: I found Mong’s article through a Google news search for “rice shortage cause”. And people say that bloggers can’t be journalists!
Beautiful image of rice by mtyto via Flickr.



  1. Emery, I can appreciate your feelings about this. Many of the promises made about genetically modified crops haven’t yet been seen. GMOs have been badly managed by businesses trying to protect patents and by governments trying to over-regulate. GMOs have also gotten a bad reputation because scientists haven’t worked hard enough to talk with people about GM.

    Happily, scientists all over the world are working to make crops that have traits like drought resistance available to farmers everywhere, giving the seed to people who can’t afford it. One great example is submergence tolerance rice, which will help farmers keep their crops if they are flooded. You can listen to a story about it from US National Public Radio

    I don’t beleive that there is a conspiracy. The food shortages have many causes. It would be impossible for one person or group of people to organize so many things over the time it took for the problems to get bad enough to cause the shortages.

    Many people (including myself) do beleive that GM crops are good, and that using carefully chosen GM crops in combination with good farming methods will help everyone to avoid crises like this one. They don’t want to hurt people or see them die of starvation – so why would they cause food shortages? If you think it might be the seed companies causing the problems, wouldn’t it make more sense for them to keep people alive to buy seed another day?

  2. I seems to me that this is crises was created only to raise prices and convince people that we GMO rice to feed the world. It’s crock.

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