Asia urged to raise rice reserves, spend more on agriculture

MANILA: Asian countries need to raise the level of their rice stocks to help stabilise prices and improve food security in a region where 65 per cent of the world's hungry live, a report said.

With populations across Asia growing, tens of millions of extra dollars need to be invested to boost rice production, said the report prepared by the US-based Asia Society and the International Rice Research Institute.

"Not only is rice risky to grow, it is risky to sell and trade," said the report, released in the United States on Monday.

"One way to lower risks is to increase the level of rice reserves, especially in the large Asian countries that have a deep interest in more stable prices."

It noted that while building larger reserves would be expensive, the goal was to use the stockpiles to cushion against price shocks.

To this end, governments could create a futures market for rice in the regional hub of Singapore.

"Under normal circumstances, a robust and deep rice futures market should add substantial stability and transparency to formation of rice prices," the report said.

It noted that rice remained the staple food for Asia, where the grain accounts for nearly half of the expenditures of those mired in poverty.

"For those making less than 1.25 dollars a day, access to adequate food from the market is often too costly," it said.

"Asia's poor, most of whom do not have land to be surplus producers of rice, are especially vulnerable."

The report's release came shortly after the UN's Food and Agriculture Organisation warned that low priority given to the farm sector over the past three decades had led to volatile prices of commodities.

The International Rice Research Institute, headquartered in the Philippines, estimated that annual investment of 120 million dollars in Asia between 2010 and 2030 could increase productivity by 8.5 per cent over the next 25 years.

This could lower the poverty rate in Asia by 15 per cent, the institute said.