Friday, 20 May 2016

Thai rice: a hunger game with ASEAN or white gold?

Perhaps the strangest aspect of ASEAN in recent years is rice. Clearly Thailand is the Iron Rice Bowl of ASEAN, and ASEAN is the Iron Rice Bowl of the world. Of course Indonesia may well quibble over that description – as Myanmar would have in previous decades before military misrule brought low the Golden Land of rice and rubies. And by World Bank data, the Golden Land has a long way to go: 80% of the Myanmar rural population lacks access to electricity, 37% lack access to clean drinking water, and only 12% of roads are paved. As recently as 2013-2014, total spending by the Myanmar Ministry of Agriculture and Irrigation on seed and extension programs, was only 0.22% of agricultural GDP (or 0.07% of total GDP), well below the globally recommended benchmark of 1% of agricultural GDP. Only 1% of the demand for paddy seed is estimated to be met by supply in Myanmar, compared to nearly 100% in Thailand and Vietnam.

And Thai rice exports are bountiful. Indeed so much rice is grown in Thailand – and quality rice at that – and harvested, that there is a long-term issue of land use. The trade-off of land to be left as jungle, cleared for rice or used for housebuilding, or indeed reservoirs given the ongoing drought, will be ever more compelling for Thailand. If not the rest of ASEAN too with limited land in mountainous Vietnam or crowded Singapore and Malaysia – or crowded and flooded Bangladesh. And the necessity of the dizzying technology of the rice terraces of Philippines maximising every inch of arable land there. Thai rice is all the more important given the impact on agriculture and living standards in ASEAN with say the rubber sector given the development of UK’s Graphene, some 200x more flexible than rubber and capable of being developed in automated lights-out factories. Or the impact on sugar cane across the Pacific and Caribbean nations, and new UK trading partners such as Cuba, with the rise in UK and EU sugar taxes and healthy eating laws - sugar perhaps soon an agri-industry as in decline as tobacco.

An economy on the back-burner without rice? One of the worst droughts in Thailand in living memory with temperatures soaring over 40F – the rubber crop reduced again by over half – resulted in the very unusual situation of a 50% decline in Thai rice in the first half of 2016. A factor of little concern though given the massive Rice Scheme stocks already held for both domestic and export markets. While a key issue in recent years has been a political dispute as to how much of the Rice Scheme was corrupt or not. A politico-legal issue that was a factor in the imposition of military rule in May 2014, and dragging the former PM Yingluck’s regime through the courts that would (almost) make the UK’s Chilcot Inquiry into the Iraq War look rapid.

And raised concerns around a judicial coup not that dissimilar to the recent President Roussef case in Brazil. Military rule while brief and relatively benign, has widely dampened down FDI investment in Thailand through uncertainty: foreign investment already down 70% in 2015, and growth flickering unsteadily around the 3% mark. Even the ban on Yingluck travel to the European Parliament only resulted in an MEP delegation visiting her in Thailand, as the handover process to the new constitution and referendum begins to return the Land of Smiles to full democracy. While the Rice Scheme, where rice is so intrinsic to the economy and society (“have you eaten?” has a more exact Thai translation of “have you eaten rice yet?”), in effect serves as a fledgling welfare programme with Government fixed prices for rice purchases.

With rice and the extensive cuisine culture so central to the Thai psyche it’s perhaps apt that the Hunger Games movies, and that two-fingered salute, become a symbol of opposition to military rule, along with a variation on English afternoon tea, by protestors eating sandwiches and group readings of George Orwell: 1984 rather than Burmese Days. More than rice But the merits of such as the Thai Rice Scheme hides the truly shocking aspect of such a wealth of rice coupled with ASEAN malnutrition. Cambodia and Laos, with a combined population of just 20M of ASEAN’s 600M, would hardly be extra mouths at the table – yet suffer from malnutrition rates of a horrifying 32% according to the UN World Food Programme. A GDP cost to Cambodia of 2.5% or c.$400M pa and a third of all child deaths.. The ADB estimates a further £134M cost in vitamins with 45% of children moderately to severely stunted. Hunger even gnawing at the Cambodian education statistics with a drop-out rate of 50% in primary school. And completion of primary school taking upto 10 years due to retaking years. And similar statistics in Laos within the World Bank citing 45% of under-5’s stunted and a 2.$% loss to GDP and no doubt contributing to the 31,000 person labour shortage for Lao development.

And worth noting the Copenhagen Consensus cited a 30:1 return on investment in solving malnutrition. And just across the Pacific, Peru managed a 10.4% decline in malnutrition in 2008-12. The former ASEAN Secretary-General and Thai Foreign Minister, Surin Pitsuwan has wisely called for ASEAN to decouple itself from a nineteenth century economic model malnutrition would fit into that formula) of stepping through the stages of commodities, manufacturing and services. And to lead on a 21st century ASEAN model of innovation. Malnutrition and MegaTransport A sound policy, but one bound to hit bumps of socio-economic dislocation on the way. Not least the urgent need to fast-forward the MegaTransport projects: ASEANRail will speed the flow of rice to towns and ports across the region.

A 24/7 smooth flow only matched by the flow of 30M forecasted tourists pumping wealth into the Thai and ASEAN economies. Certainly a similar issue the UK could learn from in stumbling through the HS2 and HS3 hispeed rail activity almost 5 years after the 2012 Olympics, and long after the opening of HS1 and Eurostar in Kent through to Europe. While the first trains are already running on the Shanghai-Madrid circuit – the longest rail journey in the world for Chinese computer and auto parts, and Spanish wine and clothes.

And, despite the blandishments of other aspects of the China Silk Road-Belt, a route only ever likely to be surpassed by Shanghai-Vancouver-New York. Overland. Up through the Bering Sea road-rail tunnel, as well as onto the Latin America growth markets of Mexico, Chile, Argentina and Brazil, avoiding the ever-increasing typhoons and storms across the Pacific sea route – if the shoals and rapids of US-Russian Arctic policy can be successfully circumnavigated. Perhaps that’s a useful role for the Commonwealth, with the UK-US Special Relationship and Canada alongside the Asian Commonwealth Pacific Group of Singapore, Malaysia, Brunei, Australia, NZ etc.

New ASEAN Rice Co-operation?

But as Myanmar emerges from dictatorship that too will add to the tsunami of rice available to ASEAN and depressing prices. The World Bank details that one hectare of monsoon season rice from the Delta region in Myanmar – the country’s rice bowl and one of the most fertile growing regions in the world – on average generates just $140 in profits now, compared to $340 in Cambodia and $430 in Vietnam. And for Cambodia, malnutrition is diminished only by the real problems of Bangladesh and India: the poorest regions on Earth bar Africa. All the more surprising that UKAid to the Kingdom of Cambodia with the fairly paltry sum of $20M has not been renewed as yet. Surely in the New 21st Century ASEAN Era, just as there is Naval Cooperation, and Climate Cooperation (the UK’s Met office with an ongoing partnership with Thailand), then an ASEAN Rice Cooperation Programme is imperative. Whether that’s ASEAN-wide or just the Greater Mekong Region initially, given the importance of Mekong river flow to Thailand, Laos, Cambodia and Vietnam, as well as the lack of desalination sites along the coast as a factor in agriculture and malnutrition.

The Mekong Delta and Bangladesh Delta are already the two most endangered areas for farming detailed by the UN Environment agency given Climate Change of not just higher sea levels or fiercer tsunamis, but also degradation of the mangrove forests and increased salination of arable land. Although the Solomon Islands may well stake a claim for that unpopular Climate Change prize with not one but five islands this month disappearing under the waves. ASEAN-Plus and MediFood Indeed surely ASEAN expansion should be considered as a part of a Greater Mekong-Indonesian rice programme – to Papua New Guinea, Timor-Leste and Solomon Islands: a combined population of just c.8M neglected somewhat by both ASEAN and Australia. And certainly ripe for regeneration with the Commonwealth Asia Group again following this month’s Anti-Corruption Summit in London and UKAid budget confirmed at 0.7% of GNI, c.$20BN, second only to USA in scale.

But the value of Thai rice isn’t just the quantity but quality – a white gold of flavours. And Red, Black and Purple too, with the varieties of rice available for consumption and export – a recent visit to the Surin Rice Centre in Isaan was impressive in the dozens of varieties of rice crops and research into yield types. While the innovative OTOP and Kitchen of the World programmes, and raft of Thai Festivals in Europe, are the ideal basis for a healthier ASEAN future based on a food innovation strand of the economy. It’s all the more strange, given that Europe’s jaded palates are only really exposed to the far inferior USA rice in supermarkets. Certainly there’s an opportunity to deepen Western retailer and consumer knowledge and appreciation of Thai and ASEAN rice. Perhaps rice-tasting on a par with wine-tasting is some way off but ultimately why not? Certainly it’s no more outlandish than Jim Thompson elevating the status of Thai silk in previous decades.

Thailand has one of the world’s great cuisines and both the variety of foods, food provenance and regionalisation of cuisine are crucial for the Kitchen of the World brand activity. Already Cambodia has stolen a march with the Kampot pepper food provenance. And unfortunately the flow of Western foods into ASEAN of pizza and burgers has resulted in the knock-on effect obesity and diabetes and supersized cancers that are the Western version of malnutrition: not so much not enough to eat, but too much, and too unhealthy.

ASEAN universities are now in the recent Times Top 200 research rankings, so surely the Food Innovation strand could be developed further in Thailand, whether more medic-based at Mahidol, or agri-based at Kasetsart, as long overdue and booming economic strand of food-health programmes. Science now adding an edge to the adages of eat yourself fitter, and you are what you eat, with the rigour of scientific testing and fortified foods alongside the plethora of health fads (in the tinned and prepacked and microwaved West) such as goji berries. With careful cultivation, Thai rice could well be the antidote not just to ASEAN malnutrition but Europe’s and the wider West too.

Tim Garbutt is a UK candidate for Parliament in 2020, with a Thailand focus, and owner of Sincerity advertising agency soon to launch in ASEAN, and Surin School charity with the first school built in Isaan.

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