Agriculture

A couple of days ago a reader, Nicholas Cantrell, posted a very interesting comment in my post “Nam Theun 2: Just about ready to start filling in.” The comment poised a number of questions, but if I can paraphrase just one of them, I think the basic premise was this: “how does the World Bank [or any of the financiers] ensure that the new lives of the resettled populations are sustainable in the long run?”  The truth is, I ask myself the same question all the time.

Soaring food prices have suddenly become a major concern for policy makers in East Asia.  The price of rice - which provides one third of the region's caloric intake - is a particular worry.  Rice prices have been moving higher since around 2004, although this was from very depressed levels in the early years of the decade.  Prices surpassed $300 a ton in early 2006 for the first time since the late 1990s, kept moving higher, and then took off at an accelerating pace from late 2007:  up 11 percent in the the fourth quarter, then 56 percent in the first quarter of 2008 and then 61 percent in April 2008 alone. Prices touched over $1000 a ton on some days in April. Domestic food price and overall consumer price inflation has accelerated in most economies and the pace of poverty reduction in East Asia  in 2008 is - at a minimum - likely to slow .

I see there has been some blog chatter about the World Bank's position on Thailand's rice exports. Let me take the chance here to set the record straight: Thailand is a great international trading partner, it's commited to maintaining its rice exports, and we support this action. This is very important at this time of food price hikes and it's the responsible thing to do.

(The chatter --see some examples here and here-- started with a Bloomberg story  published yesterday).

I just returned from the Mekong Delta – Vietnam’s “rice basket” – to look at the results of development projects partly financed by the World Bank. With rice prices going through the roof, I expected to see farmers enjoying a financial boom. But, reality was more nuanced and underscored how difficult it is to grow more rice at the drop of a bamboo hat.

One of the projects I looked at improved water management in the delta by upgrading canals and building more gates (known as sluice gates). The idea is to prevent water from the sea from intruding and ruining crops in the dry season; and stop floods from washing away the harvest during the rainy season. The results have been dramatic.

Better irrigation and more security have allowed farmers like Ngo Kim Tan, 64 years old, in Can Tho province, to plan ahead and plant more crops. Keeping salt water out has translated into tastier fruit and higher rice yields. Her rice yield has gone from about 700 kilos of rice per “cong” (1,000 m²) to about a 1 ton per cong. Meanwhile the price of paddy has been multiplied by 1.5 in one year (from 3,000 VND per kilo to 4,500 VND – about 28 cents ofa US$ - this year).