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Published on April 25, 2008

Thanong Khanthong

Americans shopping at these stores can only purchase four bags of jasmine, basmati and long-grain white rice per visit. The food crisis is not sparing the world's largest and most affluent economy.

According to the UN, the food-price index rose sharply in March compared to the corresponding period last year. The grain price rose by 88.1 per cent, compared with 106.5 per cent for oil and fat, 48.4 per cent for dairy products, 26.1 per cent for sugar and 9.9 per cent for meat products.

Global food shortages are due to an imbalance between demand and supply. Global warming has resulted in unpredictable droughts and floods, which hurt farming and food production. Most industrialised countries have turned their farmlands into residential areas, thus reducing farm production. Incomes in countries such as India and China have increased, a development associated with a higher demand for food. Traditional farming countries have also shifted away from food production to planting biofuel crops in the wake of skyrocketing oil prices.

The heads of the UN, the World Bank and other organisations have warned about the looming social unrest, if not starvation, that is bound to result if the world does not get its act together to tackle the food crisis. They have also voiced concern over the prospects of even higher food prices, as farm-producing countries have turned to planting biofuel crops instead of reserving the land for food production. The World Bank, in particular, has called for Thailand, which is the world's major exporter of rice, to keep its rice exports going in order to alleviate the global food crisis.

Prime Minister Samak Sundaravej is angry with the UN and World Bank. He said they should have blamed oil-producing countries or other oil speculators, who have driven up oil prices without any justification. Instead, they have pointed their fingers at countries in which farm production has shifted from food to biofuel crops.

Jim Adams, the World Bank's vice-president for the East Asia Pacific Region, was forced to come out yesterday and try to calm the heated debate. Without referring to Samak's comment, Adams said: "Noting Thailand's long and successful history as a rice exporter, I emphasised that we feel the government of Thailand was being responsible in resisting pressures to cut off exports and that there was, in our view, an adequate supply of rice to meet needs."

The global food crisis is a telling event for Thailand. We had been ignoring the agricultural sector, as the country embraced the manufacturing sector. Now agricultural output represents less than 10 per cent of the gross domestic product, although about 30 million Thais are dependent on the sector.

On the export front, Thailand's main exports are now integrated circuits, automobile-related products, plastics, jewellery and electrical appliances. In March of this year, these manufactured export items accounted for a 64 per cent share of all exports, totalling almost $10 billion. At the same time, agricultural exports represent a 16.7 per cent share for all exports, worth $2.4 billion. The major agricultural export items are rice, rubber, tapioca and food. The share of other export items was 17.6 per cent, worth $2.6 billion.

Although the value of Thai agricultural exports and output remains small compared with other modern sectors of the economy, it would really make a big difference for the livelihoods of Thai farmers and labourers if the crop prices can be increased. For the moment, farm incomes have already risen and this has led to an increased standard of living for rural Thais. SCG Buildings Materials, a unit of Siam Cement Group, has come out to assert that sales of its building materials rose 5 -10 per cent in the first quarter of this year, largely due to the higher farm incomes.

The strategy ahead for Thailand is to look back at our strengths in farming; Thailand can really become the "Kitchen of the World". If we can improve productivity and the quality of Thai farm produce, we can raise the standard of living of the majority of Thais upcountry. Once we have accomplished this task, we'll be able to bridge the income gap and help ease the age-old political and cultural conflicts between the urban rich and the rural poor, which is now polarising the country.