No quick fix to soothe Asian rice shortage fears

By Jacqueline Wong

MANILA (Reuters) - Asia's fear of impending rice shortages looks to have become something of a self-fulfilling prophecy and exposed the over-reliance of many of the region's economies on food subsidies and other market-imbalancing steps.

Economic analysts and experts said the sense of crisis should begin to ease with harvests arriving in markets in coming weeks, but policymakers should take this as a wake-up call to start focusing on sustainable increases in productivity.

Spooked by the possibility of a shortfall and surging prices, Asian nations have in recent weeks slapped export curbs on their staple food and subsidized prices, reversing years of economic reform. The measures have helped stoke inflation and sowed more panic, the analysts said.

"The current rice crisis is sort of man-made," said Randy Barker, acting head of Philippines-based International Rice Research Institute's social sciences division.

"We sort of created this situation by restricting exports and even on the imports side, countries are trying to build stocks."

Trade officials are now urging the World Trade Organisation to push food-producing countries to maintain exports to prevent a worsening of the crisis.

"At the moment there is no shortage, but the controls are based on the national security point of view. It's a decision by governments," said Kazuyuki Tsurumi, representative of the Food and Agriculture Organization of the United Nations in Manila.

"When the harvest in 2008 becomes clear, maybe some countries' export bans will be relaxed or lifted I hope."