The future of global rice
The global rice industry meets today under the most challenging circumstances. While world rice inventories are at sufficient levels to meet demand, due to export bans, logistics disruptions, climate change, and regional conflicts, rice prices continue to rise and have denied the world’s poor access to this basic staple. But at no other time in our history has agriculture technology also managed to develop to such a level that can drive higher productivity and rural incomes to benefit the consuming public and farmers alike.
Against this backdrop, we continue to face the following challenges and must address them head-on:
1. Rising global populations and their impact on land and water resources. As population increases, continuing urbanization will exact its toll on agricultural lands and water sources. For this reason, greater conservation of water and soil resources must be given preeminent importance and funding by governments. Government cannot do this alone but must incentivize the private sector to work on these through cost-sharing partnerships. Banks can be allowed to enroll projects like soil conservation, impounding, and drip irrigation, as agri-agra law compliant. For the government, land and water use regulations must also promote a balance that takes into account the realities of the use and ownership of these vital resources through more equitable tenurial arrangements. This is not a “zero-sum” game: A balance can be struck by incentivizing the private sector to develop the areas around our most productive land and water resources. As we do so, we must push ourselves to be more productive today by investing in better planting techniques, postharvest, and logistics systems.2. Climate change. Rice is highly sensitive to climate conditions and climate change is expected to significantly impact on future production. In the Philippines, we suffer through more than 20 tropical cyclones a year which the Asian Development Bank has said, registers more than $1 billion in annual damages. El Niño in 2024 will also affect India, Pakistan, Thailand, and Vietnam. Together, these four countries make up 30 percent of global rice sales.
With these realities, we must use the vast array of technologies available to manage risks and costs. We must use precision agriculture, digital agronomy, weather intelligence, better data, as well as better financial and insurance instruments. Without better risk mitigation products in public and private finance, funds will not flow into agriculture and will keep the sector “high risk.” In the Philippines, banks pay annual penalties of more than P3 billion rather than comply with a law that obligates them to lend 25 percent of their loanable portfolios to agriculture activities. That is a clear indictment against the sector’s “bankability.”
3. Sustainability and environmental impacts of agriculture. From the amount of water that rice production consumes (it is the most “thirsty” crop requiring 2,500 liters of water to produce one kilo of rice), to its methane emissions (1.5 percent of total global greenhouse gas emissions), rice production has significant impacts on the environment. Methane sets the pace for global warming in the near term since it has 80 times more warming power than carbon dioxide. Therefore, we must incentivize farmers to use drip irrigation or to laser level their rice fields to minimize flooding of rice fields, and prod farmers to aggressively use balanced fertilization and integrated pest management protocols. As the world meets at the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change in Dubai, allowing farmers greater access to green finance, must be part of the agenda.
4. Maximizing international collaboration. As the world has broken up into multipolar clusters, there is a challenge to engage multilateral associations at different levels, to advocate for policies that will promote the common good. The world is so complex today. Disease and infections, financial melt-downs or misdeeds, adventurism and aggression, trade policies like export bans and tariffs, imposed at the local or regional levels, have a way of affecting the family of nations eventually. Since India, for example, imposed its export bans for white rice, the price of the commodity has jumped up to 25 percent impacting the world’s poor.
Overall, the future of the global rice industry depends on steps taken at the lowest levels of societies: in the paddy fields where the commodity is grown, and adopting innovative financing approaches and partnerships to address urbanization, soil and water conservation, and integrating the value chain. Most of all, leveraging technology, introducing better risk-managing financial instruments, accessing green finance, and addressing political and market dynamics, will determine the longer-term sustainability of this sector on which half the world’s population depends.
—————-
Arthur C. Yap was agriculture secretary (2004-2010), representative of Bohol’s third district (2010-2019), and governor (2019-2022).
