Rice price volatility: Sustainable policies in Asia and Europe

Abstract

In 2008, world attention focused on the global food crisis and, as a consequence, on global food security. Although food prices had dropped substantially by mid-2009, most remain at or above past trend levels. Of all cereals, rice has a strategic importance, with its production and consumption being concentrated in Asia. Consequently, it is, and has been, subject to a host of policy intervention measures that have placed it among the most distorted of all agricultural commodity markets. Responses to the 2008 food crises included export policies, the removal or reduction of import duties and taxes on food commodities, and various producer and consumer support measures. In particular, policies in favour of consumers have been motivated by the need to shelter vulnerable income groups from threatening rising poverty levels. Policies have therefore tended to be ‘sustainable’, in that they have helped shape socially responsible strategies by principal actors (such as traders) in these markets, whether public or private. Towards exploring how socially embedded government policies can serve as benchmarks for private corporations’ future strategies in the rice market, this article outlines the market's characteristics and compares policies adopted in Asia and the European Union from an economic and social perspective.