Rice Growers Are Getting Rich at the China's Expense

Bangkok (AsiaNews/SCMP) – Thai rice growers are getting rich selling to China. Thailand is expected to export record amounts of rice this year — 8.5 million tonnes compared to 7.6 last year — to satisfy the demands of hard-pressed China.

"No Thai farmer can remember making so much money," said Seri Theparak, a very pleased farmer from the north-east of the country. Thanks to the revenue from sales to China he was able to buy new land and farming equipment.

According to Thailand's Ministry of Trade, the country's economy should grow this year by at least 7% compared to 6% in 2003, and all because of rice and farm product exports. In the first of quarter of this year, rice exports to China rose threefold with earning rising by 54% reaching $US 980 million by the end of May.

Thailand is the world's biggest rice exporter in the world and the only country today with a grain surplus. All other major producers have had to limit exports. India for example was the second biggest exporter last year; but according to Department of Agriculture estimates, it is expected to reduce exports this year.

From the US to India, farmers are enjoying higher grain prices which might surge even more should China, hitherto the world's greatest rice producer and consumer, become a net importer.

According to Mamadou Ciss, managing director at Ascot Commodities, "rice prices in China have risen by 70%. We are in a new bullish trend because nobody believes that China can match local production to demand."

David Dawe, an agro-economist with the International Rice Research Institute in Manila points out that since 1960 this is the fourth time that China has had to import more rice than it has exported. However, according to Vichai Sripasert, president of Thailand's Rice Exporters Association "this is also the first time that the Chinese are buying low-grade rice (sold at US$ 223 per tonne, 13% more than last year). Previously they used to buy only top-grade grain."

Rapid economic growth and related urban sprawl are eating up farm land and pushing millions of farmers and farm workers off the land. Many have left grain farming for better wages and working conditions in factories.

For years China sought 95% self-sufficiency in rice, wheat and maize. In the last ten years production has been erratic with surpluses and downward trends. Still no one considers the present situation a food crisis.

However, the critical situation has pushed the government to take emergency measures designed to boost grain production. Back in March, the government announced a package of "urgent subsidies" worth US$ 114 million that included cutting farm taxes and giving agricultural credits and incentives to farmers.

The package also includes stringent enforcement of rules and regulations against less than perfect law-abiding enterprises and restrictions on farmland. This follows an already-approved reforestation plan that should benefit various regions of the country.

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