Samak's 'rice-cartel' plans a pipe dream

No one knows what is going through his mind, but Prime Minister Samak Sundaravej, has, essentially, decided to take on Mother Nature. By asking fellow Southeast Asia rice-growing countries to form a cartel - the Organisation of Rice Exporting Countries, an Opec for rice - Samak is trying to do the impossible. First of all, countries like Laos and Cambodia barely grow enough rice to feed their own citizens.

Cambodia aims to export eight million tonnes of rice by 2015, while Laos, in the same year, hopes to produce enough to feed its 6.5 million citizens, who by then should number about 7 million.

Secondly, exporting countries in the region have a long history of competition, not cooperation, when it comes to this commodity. Thailand and Vietnam, the top two rice-exporting countries in the world, have been at each other's throats since the late 1990s. Try to ask Hanoi about its clients and see what you get. It's the next item on Vietnam's list of state secrets.

Rice prices have tripled this year, with the regional benchmark hitting US$1,000 (Bt31,616) a metric tonne for 100 per cent Grade B white rice.

Increases in the price of rice have come amid global inflation, poor weather in some rice-producing nations and a demand that has outstripped supply. Some Asian countries, including India and Vietnam, have contributed to the problem by curbing rice exports to guarantee their own supplies.

Economically, rice is considered a highly elastic product. This means rice eaters can opt for something else, like corn, wheat, and other forms of carbohydrates.

Farm products, especially in Asia, are unpredictable.

Moreover, Asia's irrigation system is far from perfect. Growing rice in Southeast Asia largely depends on the grace of God, not to mention insects and humidity. One can't control rainfall, the essential element for rice growing. But an Opec member can turn its oil pumps off or on.

An overproduction of rice would not be the answer, as the product does not have a long shelf life. In other words, steering market prices is virtually impossible.

So what can be done?

Filipino senator Edgardo Angara, chairman of that country's Senate Committee on Agriculture, was quite blunt when he said the idea that a small group of producers could control a food staple and set prices out of reach of "millions and millions of people" was immoral.

"Almost 3 billion people are rice-eaters. It's not a good idea. It is a bad idea...It will create an oligopoly and it's against humanity," he said.

The Philippines is paying double what it paid for the same amount of rice just a year ago and has every right to be frustrated.

For a start, Asean countries can work on information sharing and help increase member productivity, enabling members to feed their own citizens. At the heart of this effort should be the wellbeing and food security of fellow Asean members.

If Asean is to be taken seriously as a global player, it needs to stop neglecting the basic needs of its members.

The association can also look beyond its geographical borders, to Africa, for example, where food security has long been an issue.

In fact, food and energy security is one of the points on which Asean has agreed to cooperate. In the agreement, rice-growers are required to reserve food for other members, while energy producers are required to reserve energy. Sadly, this hasn't happened.