Cambodia hit hard by rice cost

Tuesday, July 01, 2008
By Kathy SaeNgian,

Pittsburgh Post-Gazette

The price of rice has more than doubled over the past year, making the commodity an expensive luxury for poor countries such as Cambodia.

These residents may spend up to 80 percent of their household income on food, said Jennifer Parmelee of the United Nations World Food Programme in Washington.

"You can imagine what happens when the price of basic food doubles and triples. What is a 'pinch' for Western consumers is a disaster for them," she said.

As of June 6 the cost of Thai 100 percent B Second Grade, the most commonly imported rice around the world, was estimated at $880 per metric ton. Last year at this time the price was $330.

"Hunger constituted the world's No. 1 public health problem, killing more people than AIDS, tuberculosis and malaria combined," Ms. Parmelee said. "Before this [recent rice] crisis, more than 850 million men, women and children went to bed hungry. Now tens of millions more will be pushed into hunger and desperate poverty."

The inflation has had a particularly adverse impact in Cambodia, where government officials have restricted rice exports to help stabilize the prices within the country. The hope is that the country will be able to rely on its own rice stock instead of buying from Thailand, the world's largest rice exporter.

As with other industries, the rising cost of oil is a major contributor to the rice crisis. Oil is needed to produce ammonia nitrate fertilizer, the most commonly used in the agriculture industry, and as oil prices soar so does the price of fertilizer.

But this is only part of the problem.

In the past, the demand for basic grains in large-population countries was high because those grains were cheap. Over the past 10 years, developing countries in Africa, for example, have seen their populations steadily increase by 6 percent every year.

Now many of those children have reached an age where they can work and bring money into the household. With this higher household income, families have been able to afford more than grain to eat.

"As people get richer, they switch from eating rice to eating more meats and vegetables, which use grains indirectly and inefficiently," Nick Minot, senior research fellow of the International Food Policy Research Institute in Washington.

Converting grains to produce animal protein has taken a toll on rice farmers because it takes two to three pounds of grain to produce a pound of chicken and 10 pounds of grain for a pound of beef.

"The food crisis is the result of progress in poor countries becoming richer," Mr. Minot said. "It's a real Catch-22."