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The end of cheap rice: a cause for celebration?

Briefing/policy papers

Written by Steve Wiggins, Sharada Keats

​After more than 30 years of decline as a result of the Green Revolution, rice prices have more than doubled since 2000, rising by almost 120% in real terms.

Restocking among major producers and shifts in trade policy have played their part in recent price increases, but are only part of the story. The more fundamental drivers of increased prices are the higher costs of fertiliser, diesel and labour as rural wages rise in parts of Asia.

Rising rural wages are good news, with potentially far-reaching benefits for poverty reduction in Asia, given that an estimated 1.3 billion of Asia's poor and vulnerable people depended on rural labouring for their livelihoods in 2008.

But more costly rice is a problem for vulnerable groups that do not share in the benefits of economic growth, both in Asia and in Africa, where coastal cities have become accustomed to cheap rice imports. 

The threat posed by higher rice prices calls for social-protection policies to guard against price shocks. But in the longer run, the rice prices present an opportunity for African farmers to replace Asian imports by domestic production, and then export from areas such as coastal West Africa that have high potential for rice production.

Steve Wiggins and Sharada Keats