AJAD Volume 7 Issue No. 2 December 2010

A rapid increase in food grain prices in the first half of 2008 has diverted global attention to the food crisis. Rice, the staple food of millions of Asia’s poor, is not only an economic good but also a political commodity. The price of rice escalated in May due to a number of shortand long-term factors, with the export price exceeding USD 1000 per ton.

Keeping the price of rice low, thus making the commodity affordable to the poor, is critically important in reducing poverty. Poor households spend a substantial portion of their incomes on rice; an increase in rice price is equivalent to a reduction in their real incomes.

This paper analyzes the factors that have contributed to the rapid rise in rice price and assesses the impact of price upsurge on poverty. A scenario analysis on rice prices was conducted through projection of long-term demand and supply of rice. The final section of the paper includes short- and long-term solutions to the price crisis.

The development of biotechnology in Indonesia is a response to more serious food security challenges as the growth of food yield in the last decade has been much less than that of population. This paper describes biotechnology development in Indonesia, examines government policies related to biotechnology, and exposes challenges facing biotechnology development in the future. It also suggests that the government should provide clearer policy actions including fiscal incentives and legal protection, involve the private sector in developing innovations in research and development, and encourage wider participation of civil society in the development of biotechnology.

The poor performance of various people-oriented forestry projects has prompted the government to adopt the Community-based Forest Management (CBFM) program as the development pathway for addressing upland poverty and deforestation. The Program is based on the premise that if local communities were given access to, control of, and benefits from forest resources, they will be transformed into responsible stewards and partners in the promotion of sustainable forest management.

This paper documents and evaluates the impacts and influences of the CBFM strategy on upland development pathways, forest resource management, and the well-being of upland communities. Findings were derived from household and key informant interviews of 20 People's Organizations that were awarded CBFM projects in various areas.

The well-being of CBFM participants improved, as evidenced by the marked increase in income over the benchmark income before they were awarded a CBFM project; acquisition of several household and farm assets, which were before uncommon to forest-dependent communities; and generation of employment in the community. The CBFM program has achieved an increase in forest cover compared with past reforestation projects. Policy implications on development pathways in the uplands were also drawn.

The rice-prawn gher (RPG) farming system, locally known as the White Revolution, is an advanced, indigenous agricultural technology solely developed by local farmers in southwestern Bangladesh in the mid-1980s.

This paper examined the impact of RPG farming on soil quality and land productivity of paddy production of modern varieties (MV) in Bangladesh. Two contrasting farming systems — RPG and year-round modern varieties (YRMV) — were considered. A total of 40 farmers (20 farmers from RPG and 20 from YRMV paddy farming) were randomly selected. Each of the sampled 20 RPG and 20 YRMV paddy farmers owned 30 farm plots. Soil sample collection procedures were conducted in two phases — at the beginning of paddy transplanting and during harvesting — in both farming systems.

RPG farming has significant impacts on soil quality and land productivity in Bangladesh. The findings indicate that the leftover feeds of prawn production provide a significant amount of soil nutrients, such as nitrogen, soil organic matter, phosphorus, potassium, to soils in fields for paddy production under the RPG farming system. As a result, RPG farmers use comparatively less chemical fertilizers per unit of MV paddy production compared to YRMV farmers. Moreover, per unit yield of MV paddy was higher in RPG farming than in YRMV paddy farming.

This paper examines the global sustainability regulation in agricultural trade by conducting an in-depth assessment of the economics of coffee-producing regions in Lampung Province, Indonesia.

A negative campaign blaming illegal coffee producers for the loss of tigers in the Bukit Barisan Selatan (BBS) National Park in the province further complicates the issue, as the current coffee supply chain could not guarantee the workability of price transparency and asymmetric structures of coffee markets, to name a few. In this region, community initiatives have been developed to foster forest conservation by adopting coffee multi-strata practices under the agroforestry system and community-based forestry management in the buffer zone outside the BBS National Park.

Based on research findings, buyer-driven regulation of environmental practices in the coffee industry, which characterize most global initiatives, have somehow restructured the supply chain in producing regions. Recent global sustainability standards require adequate organizational capacity of coffee-farmer groups and rural cooperatives involved in the supply chain. The paper recommends policy integration between bottom-up initiatives at farm level or institutional changes at supply-chain organizations, and top-down sustainability standards set by the private sector and non-government organizations.

In Myanmar, rice is an invaluable commodity both as a staple food and a source of high foreign exchange earnings through export. The country's agricultural economy has been transitioning from a planned economy to a market system since the late 1980s; however, the government has yet to engage in full-scale rice export deregulation. Therefore, Myanmar's rice marketing system works within the boundaries and limitations of a halfway-liberalized economy, inevitably eliciting questions about its performance.

Using the Engle and Granger two-step co-integration method and the restructured Ravallion model of unrestricted vector auto-regression (VAR) error correction form, three surplus markets, three deficit markets, and Thai rice price series were tested to determine market integration and price causality. All price series were monthly data in both nominal and real values from 2001 to 2004.

Results revealed that in the domestic market, integration was weak in real value of rice price, and the supply side eventually depended on the demand side. Price co-integration did not exist between Myanmar and Thai rice prices in real value, reflecting market segmentation. Consequently, accurate price information from international rice market price over time was unavailable for Myanmar rice price movement. Looking at the direction of rice price causality, deficit market prices were driving the consumer price index (CPI), and the CPI was forcing the surplus rice market price. Hence, deficit markets are the prime movers in rice price changes in Myanmar.

Market integration suggests that the government should focus on managing inflationary pressure instead of being directly involved in the rice marketing sector in order to control the domestic rice price stability in the long run. Government monopoly in rice export has caused segmentation between domestic and international markets. If private rice export was permitted via trade policies, the marketing system would be able to transfer correct price signals from the world market to the producers, consumers, market participants, and finally, the government. Only then will Myanmar's rice market not be isolated from the international market and get the right price co-integration that may push the efficient market-oriented economy to move faster.