Thursday, August 02, 2012

Let them eat....Rice?

The drought in the US midwest that is devestating the corn crop has gotten headlines, but TPMBarnett notes another drought:
Russia/Black Sea region is undergoing another bad drought, raising the specter of another export ban. US is biggest exporter of wheat but the Black Sea trio (Russia, Kazakhstan and Ukraine) account for one-quarter of global exports and are traditionally key suppliers to north Africa and the Middle East.
Put this on top of Egypt's economic problems (LINK) and does this mean we will have riots in an Egypt that imports most of it's food, and now the prices will go up for the poor? The huge gift in monatary aid to Egypt will hopefully prevent this from becoming a catastrophe, but how long will the west continue to keep them afloat?

And if not, will that country descend into riots, or will they just decide a nice small war with Israel will distract the masses?

The rain is also sparcer than normal in the rice areas of India, but the irrigation will stop a loss of the crop in the Punjab. But does this mean that the price of their rice will go up? Or will it mean that the farmers will lose money, since their rice has to compete with cheaper imports (a problem we see here in the Philippine)? But India's drought is also causing problems with the rice farmers in the Sindh of southern Pakistan. But since the rice crop in Southeast Asia and Australia is expected to be good this year, the main problem for those areas is less profit for farmers, not hunger.

Here in the Philippines there's been rain, but no flooding (outside of Manila, which is due to bad infrastructure) so hopefully our rice crop will do good this year (we are in the "rice bowl" area of Luzon). But all we need is typhoon and floods at harvest like last year to ruin our crop and our profit. However, so far we are expecting a good harvest.

There is one major advantage of Rice over wheat, corn and other grains: one irrigates rice. A dry season just means paying for irrigation water. A wet season doesn't hurt. Flooding at harvest is the main problem, but flooding early in the season just means plowing under the crop and replanting. And newer hybrids are being used that are flood and saline resistant, so they wouldn't be destroyed in a minor flood.

So, if the corn and wheat crops are a bit tepid this year, substitution of rice might help stop hunger.

Add to this the good news in the Philippines: an aggressive program to grow higher yield rice is good for those of us who are farmers, and with PNoy hitting corruption, we are hoping for more investment, maybe from firms who are disillusioned with China. Things should be okay, unless China needs to start a small war to keep it's people distracted from internal problems.

The brown out in India has made a lot of western reporters say that country is not ready for prime time, yet fewer noted that the Chinese Potempkin village was exposed with the deaths from the floods in Beijing last week.One expects floods in Manila, but in Beijing?

The UKTelegraph suggests China is going into a recession.
Albert Edwards, for Societe Generale, said this echoes the Asian crisis in the late 1990s when the region flooded the West with goods, transmitting a deflationary impulse through the global system. This time the Asian bloc is a bigger animal, and the West is more fragile.
“The harder the landing in China, the more goods they are going to dump on us. It is political dynamite in the run-up to a US election,” he said.


A China with economic trouble could try a short war against the Philipines, and know they could win, but in the long run, it could result in other countries turning on them. True, the "Pax Americana" might be no more, but there is still Japan, India, and those feisty Vietnamese who won't be as easy to steal land from.

But we worry that a Chinese recession means dumping their artificially cheap and subsidized goods into countries like the Philippines (and in Africa), underpricing local businesses and leading to local joblessness. We in the Philippines can always export labor, but now with the problems in the Middle East, we are hearing warnings about fewer jobs for nurses and maids and hotel clerks there.

With the sanctions hurting Iran, and the uncertainty if the entire Middle East will descend into a war between the three groups wanting to run a Caliphate, (Sunni, Shiite, and Turks) hardly anyone in the US notices the "invisible man": The one million plus Filipinos (and similar numbers of Indians, Pakistanis, Indonesians and other workers) who would end up displaced even in the case of a minor war.

So worry about food instability in Iran, and Egypt could have a ripple effect...

I was in Liberia when food riots and a coup led to that country's long and bloody civil war, so I worry about hunger, not geopolitics, igniting the next war.

My granddaughter is at the age when she worries about these things, but all I can do is assure her if worse comes to worse, we would be under China's influence, and as my husband promised me when I moved here: We grow rice, so we always will have rice to eat.

And one of these days, when the Philippines is "rice independent", we may even be able to export it.

Sorry for the rant: I'll probably cross post this to my bnn site after I get time to do more editing.

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