Higher Rice Prices Research Articles

Price and Non‐Price Factors in Development of Rice Cultivation: Case Studies From Southern India and Mekong‐Delta Vietnam

ABSTRACTThe high rice prices of 2023 have highlighted the need for increasing rice productivity. But improving productivity, especially in low‐performing rice‐producing regions, should also improve incomes for the numerous smallholder cultivators. This article examines what we can learn from the experience of high‐performing rice‐growing regions, which have both high rice yields and incomes. We focus on two best‐performing villages from Kerala, southern India and Mekong Delta, Vietnam. Using a detailed case study approach combining farm budget analysis, counterfactual simulations using agricultural household models, and qualitative insights, our analysis shows the contribution of price support, irrigation, and agricultural research in these two regions to the current situation. While price support was the prominent factor in Keralaʼs village, irrigation and extending the cropping intensity was important for farm incomes in the Mekong Delta village. This comparative analysis demonstrates the need for an ongoing evaluation of price and non‐price factors and supplementing farm incomes through specific interventions for developing low‐performing rice‐producing regions.

A simulation of increasing rice price toward the disparity of income distribution: An evidence from Indonesia

PurposeConsidering the significance of rice as a staple food in Indonesia, this study aims to analyze the impact of various factors, i.e., domestic price production level, exchange rate, international rice price, and Gross Domestic Product (GDP) per capita, on domestic rice prices and the resultant disparity in income distribution and inequality in the country. MethodsA simulation analysis has been performed to assess the impact of the above-mentioned factors on rice prices and the resultant income disparity in Indonesia. For that, input data from 2006 to 2020 was used to depict the change in domestic rice prices from 2021 to 2026 due to independent variables changes. FindingsResults revealed that a regular increase in rice production decreases rice prices in the longer term. Besides, a rise in the exchange rate decreases rice prices, and a fall in the exchange rate results in higher rice prices. Results also showed the insignificant impact of international rice prices on domestic rice prices in Indonesia. In contrast, an increase in per capita income reflected an increase in rice prices. Moreover, the result of the study exemplifies that the expenditure for rice has a very low elasticity (0.0975) compared to the expenditure on non-rice food (0.4096). More than half of the total household expenditure (50.71%) is spent on food, while the rest (49.29%) is used for non-food. The increase in rice prices affects the rise of income amongst farmers and declines the income of non-farmers. Hence it affects the decline of disparity in households' income distribution. Originality/valueThis study adds value to the existing literature with several implications for practitioners, policymakers, and government organizations to take necessary measures to stabilize rice prices and income distribution among the various income groups.

Rice Value Chain Analysis: Rice Seed Production as a Profitable Agribusiness in Nueva Ecija

This study explored the rice value chain (RVC) in Nueva Ecija, value additions, found restrictions, and offered to upgrade solutions to improve the competitiveness of the rice industry and specific segments in the RVC using the value chain analysis (VCA) methodology. Farmers, paddy dealers, millers, wholesalers, wholesaler-retailers, and retailers in Nueva Ecija provided primary data. Workshops with stakeholders were also held to validate preliminary findings and identify upgrading strategies. The RVC begins with the provision of inputs for paddy production and concludes with the consumption of milled rice. The RVC is dominated by a traditional multi-layered supply chain with interconnected chain actors consisting of competing farmers, paddy traders, millers, and rice traders in each segment and, frequently, with the involvement of brokers in both paddy aggregation and rice distribution, thereby increasing marketing cost. The major constraints identified in the RVC included high production and marketing costs of paddy and rice due to low yield, high labor and material inputs, and a lack of critical infrastructure and market facilities (e.g., modern mills, dryers, cheap transport, and energy), resulting in high domestic paddy and rice prices and low competitiveness of the entire rice VC. To improve competitiveness, the rice industry should focus on developing and promoting yield-increasing, postharvest loss-reducing, and cost-cutting technologies, as well as those that improve overall RVC efficiency, such as investments in enabling infrastructure and facilities for transport, handling, storage, drying, and milling.

Farmers' technology preference and influencing factors for pesticide reduction: evidence from Hubei Province, China.

Based on the successful experience of pesticide reduction in China, this study uses survey data from Hubei Province to measure rice farmers’ technology preferences for pesticide reduction considering their needs, and compare the heterogeneous factors influencing farmers’ adoption behavior. The results show that large-scale farmers prefer drone services and efficient machinery, while small-scale farmers prefer scientific standards and biopesticides for pesticide reduction. Second, farmers’ adoption behavior of pesticide reduction technologies is mostly influenced by education, risk attitude, income, agricultural labor, scale, rice price, residue testing, brand, training, subsidy, and demonstration. Among them, education, risk attitude, scale, rice price, cost, and training, significantly affect farmers’ adoption level of multiple pesticide reduction technologies. Further, higher rice prices and participation in training could promote the use of pesticide reduction technologies in a larger area by farmers. Therefore, the real needs of farmers should be focused on the promotion of pesticide reduction technologies, and pesticide reduction programs in different regions should carry out precise intervention policies. These findings can provide practical policy guidance for effective pesticide reduction in the central region of China.

Investigating the Effect of Rice Commodity Price Volatility on Provincial Capital Poverty: An Evidence from Indonesia

Poverty is one of the macro problems faced by all countries. These problems have different solutions depending on the character of the poor population in the country. One of the proposed solutions is to control prices so that the level of public consumption is maintained. The purpose of the study was to analyze the effect of rice prices on poverty and to map the condition of rice price movements related to poverty in provincial capitals in Indonesia. This study uses panel data from 34 provincial capitals in Indonesia from 2011 to 2020. The data was collected from the Central Bureau of Statistics of Indonesia and uses a panel regression model and important performance analysis (IPA). The results of this study indicated that the price of rice positively affects poverty in provincial capitals in Indonesia. The IPA results show that most provincial capitals in Indonesia are in areas with low poverty rates accompanied by low rice prices and areas with poor people but tend to have high rice prices compared to the average price of rice. It concludes that rice greatly influences the consumption needs of the people of provincial capital cities in Indonesia. This finding shows the importance of maintaining the stability of rice prices due to the large influence of rice price movements on the increase in the percentage of poor people. Suggestions should be given for subsidized rice distribution in areas with high prices.

Global food price surge, in-kind transfers and household welfare: Evidence from India

This paper studies the impact of high global rice and wheat prices on household welfare in India. I use the 2007–08 surge in global food prices and household share of area under rice and wheat at the baseline to show that rice and wheat cultivating households gain from high prices. These welfare gains mainly accrue to net producers. I observe that net producer households were able to maintain their per capita spending and consumption of rice and wheat by decreasing consumption of market purchased rice and wheat and increasing consumption of government-subsidized rice and wheat. Net consumers, on the other hand, experienced a decline in the total per capita consumption of rice and wheat even though they substituted their market purchases with homegrown produce and subsidized grains. The role of in-kind food transfers in insulating households from high prices was evident for both net producers and consumers. The combined effect of substitution within food staples from different sources was that both net consumer and producer households could maintain their total calorie intakes and resist an increase in the total food expenditure. Finally, I find evidence that high rice and wheat prices induced working-age adult males in net producer households to increase total workdays and workdays on their own farm.

Carbon, Nitrogen and Water Footprints of Organic Rice and Conventional Rice Production over 4 Years of Cultivation: A Case Study in the Lower North of Thailand

An integrated method is required for comprehensive assessment of the environmental impacts and economic benefits of rice production systems. Therefore, the objective of this study was to apply different footprinting approaches (carbon footprint (CF), nitrogen footprint (NF), water footprint (WF)) and determine the economic return on organic rice farming (OF) and conventional rice farming (CVF) at the farm scale. Over the 4-year study period (2018–2021), the results showed lower net greenhouse gas (GHG) emissions in OF (3289.1 kg CO2eq ha−1 year−1) than in CVF (4921.7 kg CO2eq ha−1 year−1), indicating that the use of OF can mitigate the GHG emissions from soil carbon sequestration. However, there was a higher CF intensity in OF (1.17 kg CO2eq kg−1 rice yield) than in CVF (0.93 kg CO2eq kg−1 rice yield) due to the lower yield. The NF intensities of OF and CVF were 0.34 and 11.94 kg Neq kg−1 rice yield, respectively. The total WF of CVF (1470.1 m3 ton−1) was higher than that in OF (1216.3 m3 ton−1). The gray water in CVF was significantly higher than that in OF due to the use of chemical fertilizers, herbicides, and pesticides. Although the rice yield in OF was nearly two times lower than that in CVF, the economic return was higher due to lower production costs and higher rice prices. However, more field studies and long-term monitoring are needed for future research.

Rice Value Chain Analysis in the Philippines: Value Addition, Constraints, and Upgrading Strategies

Using the value chain analysis (VCA) framework, this research analyzed the rice value chain (RVC) in the Philippines, examined the value additions, identified constraints, and proposed upgrading strategies to enhance the competitiveness of the rice industry and the specific segments in the RVC. Primary data were derived from key informant interviews in government and non-government agencies, surveys from farmers, paddy traders, millers, wholesalers, wholesaler-retailers, and retailers in 20 major rice-producing provinces and demand centers. Stakeholders’ workshops were also conducted to validate the preliminary findings and identify upgrading strategies. Descriptive and economic approaches were applied in data analysis. The country’s RVC starts with the provision of inputs to produce paddy, and ends with the consumption of milled rice. The RVC is dominated by a traditional multi-layered supply chain with interconnected chain actors composed of competing farmers, paddy traders, millers, and rice traders in each segment and, oftentimes, with the engagement of brokers in both paddy aggregation and rice distribution, thereby, increasing marketing cost. The major constraints identified in the RVC included high production and marketing costs of paddy and rice attributed to low yield, high labor cost and material inputs, and insufficient crucial infrastructure and market facilities (e.g., modern mills, dryer, cheap transport, and energy), which result in high domestic paddy and rice prices, and low competitiveness of the entire rice VC. To enhance the level of competitiveness, the rice industry should concentrate on generating and promoting yield-increasing, postharvest loss-reducing, and cost-minimizing technologies, as well as those that improve overall efficiency in the RVC such as investments in enabling infrastructure, and facilities for transport, handling, storage, drying and milling.

Domestic and international impacts of the rice trade policy reform in the Philippines

Faced with high domestic rice prices that have fueled inflation above the 2018 target and penalized poor consumers the most, the government of the Philippines has decided to abandon the quantitative restrictions on imports and replace them with tariffs. This paper uses a global rice model based on a partial equilibrium framework to assess the possible impacts of this reform on imports, production, consumption and prices. In contrast with past similar studies, we address three key concerns (i) the heterogeneity in farm price across 16 regions in response to the combined effect of the tarriffication and the average historical trend in productivity increase at 1.5% between 2001 and 2018, (ii) the differentiation of imports by origin partly due to the different tariffs applied to countries within and beyond the Association of South East Asian Nations, and (iii) the effect on domestic prices in third countries. The simulation results suggest that the reform would increase imports by 2.47 million tons (20.7%) in 2019. We also find a large decline in farm prices and retail prices respectively by PhP 6.1/kg (30.1%) and PhP 7.6/kg (17.4%) in 2019 that explains an increase in rice consumption. We estimate the fall in total inflation at 1.2% in 2019 but less over time. Further, the large fall in farm prices in 2019 is shared quite evenly among regions in the short term but returns to pre-reform levels in the near term. Using a higher price elasticity of supply for one region obtained from panel data surveys, we show a more pronounced decline in production than the national average. Such differentiated results confirm the relevance of using a regionally disaggregated model to design more targeted policies. We also show a slight increase in world prices, which led to small increases in the domestic prices of South and Southeast Asian rice markets. While this reform is largely pro-poor consumers, policy makers would need to use the additional tariff revenue to help rice growers either increase their competitiveness and modernize their rice production or shift to other crops.

Estimation and Analysis of Food Demand Patterns in Vietnam

The paper analyzes food consumption patterns of Vietnamese households, using a complete demand system and socio-demographic information. Demand elasticities are estimated applying a modified Almost Ideal Demand System (AIDS) model on the Vietnamese household survey data in 2006. The results indicate that food consumption patterns in Vietnam are affected by income, price, as well as socio-economic and geographic factors. All food has positive expenditure elasticities and negative own-price elasticities. Rice has mean expenditure elasticity of 0.36 and mean own-price elasticity of −0.80. Using the estimated elasticities, the study finds that when rice prices increase by 20 percent, average household welfare rises by 1.3 percent, yet it is important to note that the benefits and costs are not spread evenly across the population. Overall, middle-income households gain the most, while the poorest households gain the least from higher rice prices. This indicates that support programs should target the poorest quintile, especially the poor in the regions hit hardest by higher prices. More generally, our study points out that targeted food policies should be formulated based on specific food demand patterns in the groups.

Policy measures to promote mid-summer drainage in paddy fields for a reduction in methane gas emissions: the application of a dynamic, spatial computable general equilibrium model

Rice production is affected by climate change, while climate change is simultaneously accelerated by methane gas (CH4) emissions from paddy fields. The rice sector must take suitable mitigation measures, such as prolonging mid-summer drainage (MSD) before the rice flowering period. To propose a mitigation policy, this study aims to demonstrate the environmental and economic effects of MSD in Japanese paddy fields by using a dynamic, spatial computable general equilibrium (CGE) model and crop model; the study also considers environmental subsidies with a carbon tax scheme to promote MSD measures. The results demonstrate that climate change under the 8.5 representative concentration pathway (RCP) scenario will reduce rice prices and rice farmers’ nominal income due to bumper harvests until the 2050s. Promoting MSD in paddy fields can prevent a decrease in farmers’ nominal income and effectively reduce CH4 emissions if all farmers adopt this measure. However, some farmers can potentially increase their own yield by avoiding MSD under high rice prices, which would be maintained through other farmers’ participation. A strong motivation exists for some farmers to gain a “free ride,” and an environmental subsidy with a carbon tax can help motivate farmers to adopt MSD. Therefore, the policy mix of prolonging MSD and environmental subsidies can increase all farmers’ incomes by preventing “free rides” and decrease greenhouse gas emissions with a slight decrease in Japan’s GDP.

IMPACTS OF FOOD PRICES ON THE ECONOMY: SOCIAL ACCOUNTING MATRIX AND MICROSIMULATION APPROACH IN INDONESIA

This study investigated the impacts of increasing the prices of heavily protected food commodities in Indonesia on producer and consumer prices. It also evaluated the changes in household living expenses and poverty. The Indonesian Food Social Accounting Matrix was developed along with a price multiplier matrix–microsimulation approach that was used to analyze problems. Poor rural households were the most negatively affected by the increments in food prices. This result contrasted with the standard political argument stating that high rice prices will decrease poverty, particularly in rural areas where the poor live or work as farmers. Of all the food commodities observed, the changes in the rice prices had the most substantial impact on both producer and consumers price, as well as the households’ living cost, particularly low‐income households. Therefore, an increase of 25% in rice price will raise urban, rural, and national poverty levels by 0.13%, 0.10%, and 0.11%, respectively.

The 1855 to 1859 locust plague in China

Historical disaster studies tend to be addressed from various perspectives, and case studies (i.e., event reconstruction) are an important aspect of such research. Using records extracted from historical documents and focusing on locust plague events, this study investigated disasters that occurred from 1855 to 1859. The objective was to reconstruct the temporal dynamics and spatial patterns of a major locust plague event to explore the social impact and reveal the underlying climate trends. The results suggested that: (1) the locust plagues followed an approximately 5-year duration from 1855 to 1859. Over this period, the frequency of individual plagues varied greatly and 1857 was the peak year. Locust plagues showed clear distribution patterns on a spatial scale during this period, with the mean center located in Henan Province. Locust plagues tended to be localized at the beginning and then spread out from the original locations, presenting a general spatial pattern of “radiating after clustering.” (2) Locust plagues were closely related to drought and showed a correlation with the overall drainage pattern of major bodies of water in the regions studied. The main reason for the locust plagues was probably drought events, climate and other geographic factors. The droughts were likely related to teleconnection between the increasing El Nino, frequency of sunspot activity and declining SSTs. (3) Locust plagues impacted society and damaged agricultural yields, as indicated by higher rice prices and increased wars. A hysteresis transfer effect was observed between locust plagues and the corresponding social responses; rice prices increased about half to 1 year after locust plagues occurred, while the frequency of wars increased after a clear delay of about 1–2 years. This showed locust plagues caused the rice price and refugee increasing and then caused social unrest.

DETERMINANT OF FOOD INFLATION

In this paper, we investigate the determinants of food inflation in Indonesia by applying General Method of Moments (GMM). The period of quarterly data is 2008:Q1 to 2017:Q4. The empirical finding of this study shows that backward-looking and forward-looking expectations have a strong impact on food inflation. Also, this study provided evidences that the determinants general food price inflation, such as food production, agriculture sector output, infrastructure, food import, agriculture sector credit, demand level (M1/consumption), and seasonal event (Eid Mubarak) are highly significant. Backward-looking and forward-looking expectations, domestic oil price, and level of demand have been a contributor toward high food price while the factors of general food price inflation reduce food price.
 In particular, we also identify the determinants of rice price inflation since it has the largest share in food price inflation. We found that backward-looking and forward-looking expectations, climate change, and demand have a strong impact on high rice price while production, productivity, harvested area, infrastructure, import, and credit reduce rice price.

Importing High Food Prices by Exporting: Rice Prices in Lao PDR

AbstractLao PDR has extensive export controls on its staple food, glutinous rice, which keep domestic prices low relative to international prices. Using price, harvest, and export data this paper analyses how glutinous rice prices in Laos PDR are related to those in its trading partners, Thailand and Vietnam. We find that rice prices in Lao PDR are more likely to rise following a good harvest year than a bad or a normal year. This is consistent with export controls being relaxed after good harvests, leading to an increase in exports early in the season and rising prices later as stocks are depleted. There is thus a case for removal of trade restrictions since they give rise to price spikes while keeping the long‐term price of glutinous rice low, and thereby hinder increases in income from agriculture. However, since high rice prices are likely to affect the poor negatively in the short to medium term, a combination of an export tax and cash transfers is recommended during the transition period. Although this is a case study of Lao PDR, the findings may equally apply to other developing countries that export their staple food.

Volatility of World Rice Prices, Import Tariffs and Poverty in Indonesia: A GCE-Microsimulational Analysis

.

Food Security in Asia and the Pacific: The Rapidly Changing Role of Rice

AbstractFood security in Asia and the Pacific presents a frustrating paradox. At one level, huge progress has been made in the past half century in bringing most of the population out of poverty and hunger. Measured by the key determinants of food security—improved availability, access, utilisation and stability—food security has never been at higher levels. Large pockets of food‐insecure populations remain in the region, especially in South Asia, and continued efforts to reach these households are necessary. At the same time, food security strategies in Asia are mostly in disarray. Most countries are protecting their rice farmers and providing high price supports, but high rice prices hurt the vast majority of the poor. Continued efforts to stabilise rice prices are understandable politically and desirable economically, but much more open trade regimes for rice will help food security throughout the region.

An Analysis of Price Behaviour of Rice in Sri Lanka After Liberalization of Economy

Wholesale prices as well as retail prices of rice increased sharply towards the end of 2007 and 2008. The year 2008/09 rice prices of Samba , Kakulu and Nadu rice have reached Rs 70, Rs 65 and Rs 50 respectively. Therefore, the objective of this study were to identify the price behaviour of rice in Sri Lanka, to develop the appropriate price forecasting model for rice and to identify the farmers’ perception on high rice price in resent past. Year wise nominal market price for Samba , Nadu , and Kakulu rice were collected form different secondary sources. Further, a survey was carried out in Thissamaharama to measure the farmers' perception on high rice prices in the recent past. Forty five farmers were randomly selected to collect the primary data.Year-wise nominal market price (NMP) of all types of rice had increased continuously. However, the real market prices (RMP) of rice have decreased. The Compound Growth Model (CGR) was most appropriate to analyze the price behaviour of Samba and Nadu rice while quadratic model was suitable for Kakulu rice in term of NMP. Further, CGR model was suitable to analyze the price behaviour of Samba while Quadratic model was suitable for Nadu and Kakulu rice in term of RMP. However, 44% of farmers were satisfied with the high rice price. According to the farmer view, price increment was a result of oligopolistic behaviour of middlemen and insufficient government involvement to control the price. Key words: Nominal market price; Price behaviour; Price forecasting; Real market price DOI: 10.4038/tare.v12i2.2795 Tropical Agricultural Research & Extension 12(2): 2009 pp.81-84

Profits, supply and HYV adoption in Bangladesh

The adoption of HYVs (High Yielding Varieties), for increased farm profitability, and the accelerated supply of cereals are important objectives for Bangladesh agriculture. In this paper, we have investigated the manner in which price and non-price factor affect these three criteria, based upon a model of rational variety choice. The model is empirically implemented using translog profit functions and a switching regression framework, and applied to a cross-sectional farm-level dataset of Bangladeshi farms for the 1996 crop year. Results indicate that rice prices, land availability, irrigation, rural infrastructure, labour wages and prices of animal power services are important factors, while fertilizer price plays a marginal role. Given these results, the policy of liberalization of agricultural inputs (particularly fertilizers) and reforms to maintain high rice prices during harvest seasons appear sound since these allow producers to receive rice prices close to world levels without burdening the government with input subsidies. Result also shows that educated Bangladeshi farmers substitute their time inputs away from agriculture, resulting in lower HYV adoption, farm profitability and rice supply.

RICE PRICES AND POVERTY IN INDONESIA

One of the reasons often given for government policies that promote higher rice prices is the desire to protect farmers and to reduce poverty, particularly in rural areas. The underlying assumption is that farmers benefit from higher rice prices and that helping farmers will reduce poverty since the majority of the rural poor are connected in some way with agriculture. This paper examines the evidence underlying this assumption. I show that only around a quarter of all households plant rice. A large majority of the population, including in rural areas, consume more rice than they produce and most are therefore harmed by higher rice prices. Those that gain from higher prices tend to be farmers with access to slightly larger plots of land. Thus an increase in the rice price constitutes a transfer from the large majority of consumers to a minority of producers at all income levels.