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Rice Crisis Forensics: How Asian Governments Carelessly Set the World Rice Market on Fire

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  • Tom Slayton

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Abstract

The world rice market was aflame last spring and for several months it looked as if the trading edifice that had exhibited such resilience over the last two decades was going to burn to the ground. World prices trebled within less than four months and reached a 30-year inflation-adjusted high. Many market observers thought the previous record set in 1974 would soon be toast. The fire was man-made, not the result of natural developments. While the governments in India, Vietnam, and the Philippines did not to set the world market on fire, that was the unintended result of their actions which threatened both innocent bystanders (low-income rice importers as far away as Africa and Latin America) and, ultimately, poor rice consumers at home. This paper describes what sparked the fire and the accelerants that made a bad situation nearly catastrophic. Fortuitously, when the flames were raging at peak intensity, rain clouds appeared, the winds [market psychology] shifted, and conditions on the ground improved, allowing the fire to die down. It remains to be seen, however, if the trading edifice has been seriously undermined by the actions of decision makers in several key Asian rice exporting and importing countries. In describing the cascading negative effects of these seemingly rational domestic policies, this paper aims to help policy makers in the rice exporting and importing nations to avoid a repeat of the disastrous price spike of 2008.

Suggested Citation

  • Tom Slayton, 2009. "Rice Crisis Forensics: How Asian Governments Carelessly Set the World Rice Market on Fire," Working Papers 163, Center for Global Development.
  • Handle: RePEc:cgd:wpaper:163
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    File URL: http://www.cgdev.org/content/publications/detail/1421260
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    Cited by:

    1. Rude, James & An, Henry, 2015. "Explaining grain and oilseed price volatility: The role of export restrictions," Food Policy, Elsevier, vol. 57(C), pages 83-92.
    2. Gibson, John & Kim, Bonggeun, 2013. "Quality, Quantity, and Nutritional Impacts of Rice Price Changes in Vietnam," World Development, Elsevier, vol. 43(C), pages 329-340.
    3. L. Christiaensen, 2009. "Revisiting the Global Food Architecture. Lessons from the 2008 Food Crisis," Review of Business and Economic Literature, Intersentia, vol. 54(3), pages 345-362, September.
    4. Senate Economic Planning Office SEPO, 2012. "Subsidizing the National Food Authority: Is It a Good Policy?," Working Papers id:4814, eSocialSciences.
    5. repec:oup:apecpp:v:39:y:2017:i:3:p:479-498. is not listed on IDEAS
    6. Schoneveld, George Christoffel, 2014. "The geographic and sectoral patterns of large-scale farmland investments in sub-Saharan Africa," Food Policy, Elsevier, vol. 48(C), pages 34-50.
    7. Christophe Gouel, 2012. "Agricultural Price Instability: A Survey Of Competing Explanations And Remedies," Journal of Economic Surveys, Wiley Blackwell, vol. 26(1), pages 129-156, February.
    8. C. Peter Timmer, 2014. "Food Security in Asia and the Pacific: The Rapidly Changing Role of Rice," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 1(1), pages 73-90, January.
    9. Uttam Kumar Deb & Mahabub Hossain & Steve Jones, 2011. "Rethinking Food Security Strategy: Self-sufficiency or Self-reliance," Working Papers id:3458, eSocialSciences.
    10. Ian Gillson & Amir Fouad, 2015. "Trade Policy and Food Security : Improving Access to Food in Developing Countries in the Wake of High World Prices," World Bank Publications, The World Bank, number 20537.
    11. Arnold H. Fang, 2016. "Linkage between Rural Voters and Politicians: Effects on Rice Policies in the Philippines and Thailand," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 3(3), pages 505-517, September.

    More about this item

    Keywords

    rice; inflation; prices;

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