Rice is a crucial staple for
over half of the world's Population, and there might
be a shortage that puts Communities that need
affordable rice on the Precipice of crisis. The only shortage out there
right now is India's plain, White, long grain rice. It's cheap and lower
quality that they ship to Developing countries. Because rice is loved all
over the world and also Continues to be manipulated
commodity by governments in The world. India's export bans are
reverberating through global Rice markets. You know, the protectionist
measures basically send a Panic signal globally. The US has been dealing with
India's over-subsidization. They've created this
monster by subsidizing so Much that now there are so
many rice farmers that if They upset those farmers,
that's a huge voting block. America's rice industry
contributes over $34 billion To the economy. But US farmers face the
same volatility. And you know, our farmers,
they'll go up against any Rice farmer in the world,
but they can't compete with A foreign government. Rice is a finicky crop and
the US produces about 20 Billion pounds of it every
year despite changing Climates that are making it
even more difficult to grow. With rice, it's not just the
question of enough water, But enough water at the
right time. So it doesn't need to be a
corn or a soybean to be Incredibly important to the
US agricultural economy. Here's how rice markets can
threaten affordable food, Trade, relationships and
the livelihoods of millions
Of farmers. There are about 40,000
different varieties of rice, But the market is comprised
mainly of long grain, medium Grain and short grain
races, as well as higher Value rices like jasmine
and basmati rice. Southeast Texas produces
millions of bushels of rice Yearly. People don't really think we
grow rice in the US. First of all, it's a small
crop. We're on 3 million Acres as opposed to some of
the other crops. It's a crop that makes use
of a lot of land that other Crops can't make use of. Most of the rice harvested
in the US is eaten in the US. About 80% of it. And also if you think about
your cereals like Rice Krispies, you know,
Kellogg's. Tex-mex or Chinese food,
food service like Chipotle. Rice is a key input into
many products that we Consume, but especially
beer. Anheuser-Busch is the number
one user of US rice Domestically. Rice requires unique growing
conditions. It's a plant that's half
submerged in pools of water, Often on top of heavy clay
soils that wouldn't Effectively grow other
crops. When you think of a rice
field, you think of steps. A field maybe in India or
maybe in Vietnam or Thailand. We don't have
land like that, right? Our land is flat, but the
farmers will grade it Slightly so that the water
can move from one end of the Field to the other, and
they can capture it and Recycle it. While the US is the largest
rice exporter outside of Asia, the US only accounts
for around 5% of global rice
Exports. The onset of the coronavirus
pandemic, and then the Outbreak of the
Russia-Ukraine war caused Global inflationary
pressures. Some countries responded to
the market shock with export Bans. For an individual country,
it makes sense to do export Bans and help the more
vulnerable parts of society. But if a lot of countries
do that, and they are doing That now, it further pushes
up prices. Then, one of the top
rice-producing countries Limited exports. India, a country which
exports make up 40% of the World's rice supply. India is a larger rice
exporter than the next four Rice exporters in the
world. In September 2022, India
banned exports of broken Rice and imposed a 20% duty
on exports of some rice Varieties. India is a country that has
suffered from food Insecurity in a significant
way, there's an Understandable desire to
ensure appropriate Availability of staple
foods like rice within the Country. But there's a
trade off of that. You end up, you know,
distorting the price signal For farmers. Rice prices spiked 15 to 20%
by 2023. Rice prices hit their
highest in almost 12 years. India added another export
ban in July 2023 on its Plain white, long grain
rice. So it is concerning that we
see a sharp rise in rice Prices across the region. Part of the problem is that
despite facing the same Rising input costs for
energy and fertilizer in
Comparison to other
agricultural commodities, Market prices for rice
stayed relatively stable, Which makes it harder for
farmers to make ends meet. The equipment is expensive,
the investments expensive, And then you have all these
outside factors really Working against you. You know, a lot of times
people will picture Ma and PA in overalls with a
pitchfork. They're not going to
picture an $850,000 combine That's sitting out there
that's connected to Satellites. India's rice export ban
impacts developing countries That depend on its
affordable rice. That adds to fears of
global food insecurity if Rice supplies are limited. It's impossible to think
about rice without thinking About the food security
lens. Over 42 countries depend on
India for over 50% of their Total rice imports. The only shortage out there
right now would really be India's plain white, long
grain rice that they ship to A lot of countries
throughout Africa and Southeast Asia. They don't
ship their best rice there. It's cheap and it's lower
quality. And when they slap a ban in
place, you know that that Impacted those developing
countries the hardest. India has historically been
the cheapest supplier of Rice. Africa or Southeast Asia,
they're going to buy from India because they got a
ton of rice. They can get it here fairly
quickly. For example, Indian rice
made up over 80% of the Market share in a number of
African countries. But even in places like
Indonesia, which is one of
The largest producers
itself, it is still Vulnerable because it still
requires imports to satisfy Domestic demand. India states that its export
bans ensure ample food Supplies domestically. However, at the same time,
food inflation concerns are At the center of India's
elections. You know, from an economic
standpoint, it does not make Sense for them to keep this
ban in place or to have ever Put it in place in the
first place. It's purely political. You know, Prime Minister
Modi is running for Reelection. You know, he's
seen consumers complaining About increased inflation
and. Rice prices domestically. And what they're really
doing is they're trying to Secure enough rice in their
domestic market at their Prices will drop for
consumers. India has stockpiles of rice
in government storage and is Harvesting one of the
largest rice crops on Record. The other risks that that we
see are, of course, rising Temperatures, but
specifically rising Nighttime temperatures,
because rice likes this kind Of warmer day and cooler
night. The rice industry faces
environmental threats that Can lower yields or destroy
crops entirely, making it Harder for farmers to make
a profit. For example, water is
crucial for rice production, But it can't be too much or
too little. I think we've seen, you
know, significant drought in California causing in 2022
a 50% reduction in planted Acres. And now that there's
been more water availability This year, significant
recovery, maybe 40%
Increases in yield
estimated. And then of course, you
bring water and temperature Together. And what do you
get is is moisture. And that can become a
breeding ground for pest and Disease or weeds and herbs
and things that are already Fairly challenging for rice
producers. When US rice farms can't
compete with global rice Prices, the government may
step in with additional Financial safety nets,
which is exactly what Happened in 2022. The government passed the
rice production program as a Supplement. $250 billion in funding that
was provided by Congress at The end of 2022 was to
support rice farmers at grew Rice only during the 2022
crop year, as a way to Offset some of the losses
that resulted from the Extreme increase in input
costs that did not Correspond with the
increases in crop prices That the farmers received. USA Rice is lobbying
Congress to include an Updated safety net program
in the next farm bill. A relatively small
investment from the US Government goes a long way
in keeping our prices Stable, but also keeping us
competitive on the world Market Rice farmers can already opt
into USDA insurance programs Like price loss coverage
and agriculture risk Coverage. These programs exist really
just to stop these farmers From falling through the
cracks, because that would Be a huge disaster, not
just for the communities, For their food supply. Rice growing communities in
the six states where it's Primarily grown are built
around the rice
Infrastructure so that the
rice mills, the rice dryers, Employ people, the farms
employ people. It's the entire supply
chain. I mean, these are very
important pillars of these Rural communities. USA Rice estimates that each
rice farm adds $1 million, On average, to their local
economies. Rice farmers and exporters,
they're all going to suffer Because of distorted
prices. It's such a risky business. On the other side of a rice
shortage, it looks like the Market can bounce back. For the most part. Rice
prices could drop nearly 10% By 2024. And if that happens, global
rice markets may even reach A surplus by 2025. And when they decide that
they've had enough of the Export ban after the
election or when they feel Secure politically, they
will end the export ban. And then that means that
rice prices globally will Tank. That will impact all
of the countries that export Rice again. A farmer in Louisiana told
me he was he said, you know, Every year we take every
bit of money that we're Worth and a little more,
and we put it in the ground, And we hope we can come
back in six months and Harvest a crop and sell it
at the market.
