The fight for rice

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October 12, 2013: There is no denying that rice is one of the most essential food items all over the world. The Chinese eat rice all the time, but you will find an average Chinese man to be thin and not well covered up like the ones that you find in North America. This is one of the reasons why the demand of rice has been rising. Countries like Thailand, India and China produce rice on a large scale and are trying to fulfill the world demand. Thailand is the world’s leading rice exporter and this commodity has been pumping money into its economy besides Tourism.  The government in Thailand further plans to allocate more land for rice cultivation. But currently, the supply has been affected dearly as rice farmers in Thailand have stopped tilling their soils as they have not received payment from the government for the past seven months.


Thailand has stopped being the biggest exporter of rice and now China has taken the position of the largest rice exporter in the world. In 2011 the Thai government initiated a program to buy the crop at above-market rates and this resulted in a buildup of stockpiles big enough to meet about a third of global import demand, but as of now the prices have dropped and exports have stalled, farmers aren’t being paid. The farmers have taken to the streets which has further escalated the Political unrest and contributed to slower growth of Thailand.
Senior economists have complained that this program of buying rice from farmers at above market rate is not helping and they should put an end to it. India has already taken over the supply chain and is exporting rice to places where Thailand would traditionally export. Thailand has fallen behind its competitors like India, Vietnam and Cambodia.

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Reserves surged and Thailand was thrown back by the rest of the South Asian Countries. According to U.S Department of Agriculture data Thailand sold a whopping 10.65 million tons of rice all over the world in 2011, shipments slipped to 6.7 million in 2012. According to the farmers the government has to sell the stockpiles in order to be able to pay the farmers back Meanwhile thre government is seeking alternative funding methods to repay its debt to the farmers, including loans from state-owned banks. According to David Dawe, a U.N. Food and Agriculture Organization (FAO) economist, if this problem ensues then Thailand will lose its place in the global rice market.

Thailand once stood as the no 1 exporter of rice but political turmoil has put them behind their competition.

 

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