Regional Office for Asia and the Pacific

Hiroyuki Konuma

FAO Regional Representative for Asia-Pacific

WELCOME SPEECH

by

Mr Hiroyuki Konuma
Assistant Director-General and
Regional Representative for Asia and the Pacific
Food and Agriculture Organization of the United Nations

delivered at the

Workshop on Modernizing the Asian Rice Industry

Bangkok, Thailand
16 February 2011




Ladies and gentlemen,

       I take the opportunity to welcome you to Bangkok for this important meeting.

       The issues to be discussed in the next two days aim to draw lessons from the food price crisis in 2007-08. This is a broad topic and, quite clearly, we do not seek to address all relevant issues. Instead, by bringing together representatives of both government and private sectors we hope to identify areas in which you can work together to reduce the likelihood of events of 2007-08 being repeated.

       The people most affected by high food prices are net food buyers such as urban residents and small farmers, fishers, foresters, and agricultural labourers who do not produce enough food to cover their needs. The poorest among them spend more than 70-75 percent of their income on buying food.

       As we meet, FAO is again warning of high world food prices. The FAO Food Price Index, a measure of basic food prices at international level, has never been higher than in January 2011. With this new price shock only three years after the crisis in 2007/08 there is a serious concern about implications for vulnerable members of our populations. Fortunately for Asia, rice prices are not yet reflecting the recent increase in prices of wheat, sugar and other crops. Nevertheless, with increasing climate variability and several extreme weather events around the world, as well as droughts in China, we cannot be too complacent. The time to invest in change is now; not when there is another major price shock.

       The experience of the 2007-2008 food crisis shows that, in some cases, hastily taken decisions by the world’s governments to mitigate the impact of the crisis actually exacerbated the situation and aggravated its impact on food insecurity. Policy decisions were often taken quickly with little consultation. In particular, those carrying out the bulk of food marketing activities; the mills, the large traders, the exporters and the importers were rarely consulted. Not only did governments develop policies in a national rather than regional context but they did not consider the implications of such decisions on the entire supply chain.

       So what can those in the industry do to ensure increased consultation at the time of policy formulation? This meeting will discuss possible ways of achieving this.

       As we enter a possible era of food scarcity and volatile prices, we can ill afford to be leaving paddy in farmers’ fields as a result of bad harvesting and poor threshing; having grain destroyed as a result of infestation, mould and other consequences of poor drying and storage; and wasting rice as a result of low mill extraction rates. Around the world there is a renewed interest in addressing post-harvest losses and this is a topic we should like you to discuss. This is an area in which FAO has considerable expertise but successful interventions do not mean just working at farmer level. Improvements are needed throughout the chain, and for that we need your collaboration.

       Over the next 40 years, a 70 percent increase in agricultural production will be needed worldwide and a 100 percent increase will be needed in developing countries in order to meet the demands of growing populations. Contract farming is attracting much interest around the world as a means of ensuring reliable supply for buyers and rewarding prices for farmers, thus giving them the confidence to invest in increased production. Contract farming has not yet been used much for rice but many in the industry are starting to consider developing such arrangements.  I hope that this meeting will enable you consider the lessons drawn by FAO on the topic and to learn of the practical experiences of those who have actually implemented contract farming operations in the region. I look forward to learning how FAO can be of assistance to promote such improved linkages between companies and rice farmers.

       There has been some criticism in the last few years of the role of international commodity market speculation in pushing prices higher than market fundamentals would appear to have justified. Two of the most recent observers to make this argument have been President Sarkozy of France and FAO’s Director-General, Jacques Diouf. At the same time, other commentators have argued that the world rice market suffers from the fact that very little rice is traded on futures markets. You will have the opportunity to debate this issue in detail at this meeting and, again, I look forward to hearing of the results of your discussions.

Ladies and gentlemen,

       I believe that the issues to be discussed by you are central to the future of the rice industry in Asia. I wish you every success in your deliberations.

       With these few words, I wish you have a fruitful discussions and pleasant stay in Bangkok.

       Thank you.