Rice Prices Look To Head Up

The grain is "a staple food for half the world including nearly 700 million poor Asians" and a second year of increasing prices could be devastating.

The article notes that farmers face restricted access to credit to purchase supplies this year, and that though more acreage has been planted with rice in recent years, yields have been falling. Governments have had to dip into grain reserves to meet consumption needs for five of the last seven years because demand has outstripped harvests. That can't go on forever.

While many articles are calling for better technology to meet this yield shortfall, by which they almost certainly mean biotech, it isn't clear that biotech can handle a credit crisis. The higher cost and input needs for patented seeds mean that farmers would be right back to where they are this year, short of the cash needed to maximize their crop.

Consider the news about Monsanto's blowout earnings in 2008. They're selling, as an analyst in the article notes, more technology in seed that's going for higher prices.

A bright spot in the world of rice, however, is Lotus Foods. I met their founder at the Clinton Global Initiative last year and got to ask him a lot of questions about their business model and farming practices.

Using techniques that are being advanced by Cornell University researchers, they work with small farmers throughout the world to grow heirloom rice varieties through low input, organic methods with high yields. Their methods don't even require much water, making them ideal where irrigation is a problem. The company then handles marketing and distribution, enabling human-scale agriculture and the preservation of rice biodiversity.

No one company can save the world, but Lotus has the right idea. Save the farmers, save the amazing crop varieties we already have, sell food worth eating. And who knows, if US employers can give up the beggar-thy-neighbor policies that have driven wages into crisis territory, more people might be able to afford food worth eating.

(Photo credit: wEnDaLicious on Flickr)