World rice crisis calls for agriculture research: IRRI

By Lewa Pardomuan

SINGAPORE (Reuters) - Asian governments need to invest in agricultural research as tight supplies of rice persist due to low yields and high population growth, an industry official said on Wednesday.

"People had become somewhat complacent. Food was not a big issue until now," said Sushil Pandey, senior agricultural economist at the Philippines-based International Rice Research Institute (IRRI).

"Five to seven years of research can help bring the price substantially down. We can bring it down if we invest enough in agriculture research," he told reporters on the sidelines of a conference.

Global rice prices nearly trebled to a lifetime high above $1,000 a tonne in 2008 due to rising demand and export curbs by producing nations, causing importers to scramble in search of scarce supplies.

Nearly half the world's population depends on rice to survive and demand for rice, which is eaten for breakfast, lunch and dinner in parts of Asia, is expected to jump 50 percent by 2030, industry sources say.

Global rough rice output was estimated around 666 million tonnes in 2008, up 1.4 percent from 2007, while consumption was forecast to reach around 645 million tonnes this year, leaving a modest surplus around 21 million tonnes, said Pandey.

Output grew around 2 percent in 2007, with about 90 percent of global rice output coming from Asian countries.

"Population growth is around 1.2 percent but yield growth is about 0.7 percent. The yield growth is not keeping up with production growth and hence there will be shortage. If there's shortage, the price will move up," said Pandey.

"The situation is the increase in rice yield has been much slower in the past five to six years. Many countries are now buying more to mill their stocks. It's a very tight balance," he said.

Thai rice prices, used as the price benchmark in Asia, have come down to around $700 a tonne since hitting record highs around $1,000 a tonne in April as more grain came into the market, but prices are still far above $300 a tonne seen in 2007.

"What I can say is that the pressure on rice price is very strong because of this situation. Compared to 2007, (the price) is still substantially high and that's the worry because poor people depend on rice," said Pandey.

"It's only by investing more in technology and development that we can find a long-term solution. We need another Green Revolution. That's exactly the point. Better technology will come only by investing," he said.

IRRI kick-started the Green Revolution in the late 1960s with the development of high-yielding rice seeds which multiplied harvests of Asia's food staple and enabled countries such as Thailand and China to industrialize.

"Our view is that governments and international donors are not investing enough in agricultural research and development," said Pandey.

(Editing by Ben Tan)