Asian food crisis has political and civil implications

By Thomas Fuller 

Asia's food crisis is spreading beyond the specter of empty stomachs.

Politicians are facing the wrath of angry voters, government budgets are being stretched to pay for increased food subsidies and the potential for civil unrest looms, especially if the cost of essential items like cooking oil and rice continues to climb.

In Malaysia, where the governing coalition was nearly ousted in March elections, voters overwhelmingly cited the surging price of fuel and food as "the most important problem in the country" in a postelection survey carried out by the Merdeka Center, an independent polling agency.

If Prime Minister Abdullah Ahmad Badawi steps down, which many members of his party are pressuring him to do amid postelection turmoil, he will be the region's first high-profile political casualty of fuel and food price inflation.

In Indonesia, the government recently revised its 2008 budget, increasing the amount it will spend on food subsidies by 2.7 trillion rupiah, or about $290 million. Total government spending on fuel, electricity and food subsidies this year will total $20 billion.
 "The biggest concern is food riots," said H.S. Dillon, a former adviser to the Indonesian Ministry of Agriculture. "I don't see an immediate danger right now, but it has happened in the past and can happen again," Dillon said. A rise in soybean prices in January led to months of small but widespread protests across Indonesia.

The price of rice, which on world markets surged 165 percent over the past year, is being closely watched as a barometer of potential unrest.

"Rice is a political commodity," said Kwanchai Gomez, the executive director of the Thai Rice Foundation, a research center. "It's not only an economic one."

In the Philippines, President Gloria Macapagal Arroyo is scrambling to ensure that there is enough subsidized rice available for the poor.

"The immediate concern is regime survival," wrote Amando Doronila, one of the country's most respected political commentators, in Tuesday's edition of The Philippine Daily Inquirer.

The rise in prices affects consumers differently across Asia. For the wealthiest in Singapore, Hong Kong or Kuala Lumpur, food inflation can engender a political backlash, but it is not a life-or-death problem. But for the poorest across Asia, rising prices mean the prospect of increasing rates of malnutrition.

"Food price increases are especially regressive," said Paul Risley, the spokesman in Asia for the World Food Program, the UN agency that feeds the world's destitute.

Singaporeans on average spend only 8 percent of their income on food, compared with 15 percent in Malaysia, 26 percent in Indonesia and Thailand, 28 percent in China, 33 percent in India and around 40 percent in Pakistan and Vietnam, according to the U.S. Department of Agriculture.

Those likely to be hurt the most by the sharp increase in food prices are the urban poor, the residents of Asia's sprawling megacities, Risley said. People in rural areas may have less cash, but they can resort to hunting and gathering.

Slum dwellers in the Philippines, the world's largest rice importer, are among the worst off in the region. Even before the spike in food prices this year, poverty and food insecurity were on the rise. According to a government report released in March, the number of people who do not have enough income to meet basic food needs in the Philippines rose to 12.2 million in 2006 from 10.8 million three years earlier, an increase of about 13 percent.

In recent weeks the government has mobilized police officers and soldiers to supply the poorest Filipinos with subsidized rice. The rice, much of which was imported from Vietnam, sells for 18.25 pesos a kilogram, or 20 cents a pound, half the price of the cheapest commercially sold rice in the Philippines.

Waiting in line outside a warehouse last weekend to buy government-supplied rice was Julieta Casanova, 60, who lives with her two children and eight grandchildren in Tandang Sora, a slum outside of Manila.

"We can't survive without rice," Casanova said. The government rations the rice to five kilograms per person, which Casanova said would last two days.

Arroyo, the Philippines' president, and many other leaders across the region have blamed hoarding by traders and millers for the price increases. Thai Grade B rice, a widely traded variety, reached $854 per ton last week from $322 a year ago, a rise that appears speculative as much as driven by market fundamentals.

Bad weather and increased consumption have caused rice supplies to shrink, experts say, but the world is not in immediate danger of running out. Indonesia is in the midst of a record harvest this year and after years of importing rice will have a surplus of 1.2 million tons, according to Bayu Krisnamurti, deputy for agriculture for the Coordinating Ministry of Economic Affairs. The Food and Agriculture Organization, a United Nations agency, predicts that an overall good harvest this year will increase rice production by 12 million tons, or about 1.8 percent globally.

Yet this news has been overshadowed in a generalized atmosphere of soaring prices for gasoline and economic uncertainty stemming from the U.S. subprime mortgage crisis. In Hong Kong and other Asian cities, some shoppers have panicked, emptying shelves of rice as news of rice prices became a front-page story.

Even in Thailand, which produces 10 million more tons of rice than it consumes and is the world's largest rice exporter, supermarkets have placed signs limiting the amount of rice that shoppers are allowed to purchase.

During a recent afternoon in the aisles of Tesco Lotus, a supermarket and department store in Bangkok, three worried customers surveyed large bags of rice and complained about the price increase. Jaruwan Krairit, 60, said the type of rice she usually buys had gone up 60 percent. Srisuttha Worawan, 57, said she had been to all the major supermarkets in Bangkok and "no one has the cheap rice," she said, only the fragrant, more expensive varieties.

Yet these particular customers were not worried about going hungry: All three were looking for cheap rice for their dogs.

"I'll have to give them dry dog food for now," said Phanit Chatthanasenee, 60, who has 10 canines. "But my dogs don't like that."

In Thailand, as in many other up-and-coming Asian countries, food may cost more, but it remains abundant.

Carlos Conde contributed reporting from Manila, Janesara Fugal from Bangkok and Peter Gelling from Jakarta.

Da International Herald Tribune, 18 aprile 2008