The world’s attention has been firmly focused on a smog choked Moscow, where record temperatures have caused the often icy countryside to burn with a litany of wild fires, a predicament that lead the government there to suspend wheat exports to preserve local prices.
Such a move created the steepest rise in wheat prices since 2007/2008 when prices caused riots globally. And this year after temperature records were broken in many countries including Burma, are commodity price fluctuations going to cause social unrest in Burma?
A new report meanwhile has indicated that rising temperatures will have a negative impact on rice yields. The study from the University of California, San Diego, found that rice yields fell when night time temperatures increased. Whilst mildly increased day time temperatures can in fact increase yields, the study indicates that night time temperature increases significantly lower yields; a researcher on the study told Reuters that; “we see much more consistently increases in night-time temperature”.
The team included researchers from the International Rice Research Institute in the Philippines and the U.N.’s Food and Agriculture Organisation (FAO) and studied data from 227 irrigated rice farms in six Asian countries.
Whilst the team also found that several sites for data collection had already witnessed a slower yield increase as the effects of climate change kick in and cut into the increased yields derived from greater human inputs with Reuters indicating that; “the past 25 years have already cut the yield growth rate by 10-20 percent in several locations in the study areas.”
Neighbouring Thailand, a leading exporter of key agricultural commodities such as rice and sugar, witnessed massive rises in prices for key commodities like sugar and eggs, partly due to the harsh dry season, and partly perhaps due to increased speculation in the commodities future markets, globally.
In Burma the military government is ever wary of such fluctuations after almost being deposed twice after fuel price protests morphed into huge, popular expressions of discontent.
As a result the government has limited opportunities to export, similar to the ‘emergency’ measures taken by the Russian government recently, a move which induced a 50% surge in wheat prices within days. In Burma such moves come without offering any financial inducements to increase production or assist in efficiency, on the contrary as economist Professor Sean Turnell of Australia’s Maquarie Institute told DVB;
“It has the reverse affect in the long term because all you are doing is destroying the incentive structure to produce the stuff, but the government always just fixes on that short term; rice prices going up, that’s gonna get people on the street”.
“so fearful are they of rising rice prices and bringing people out onto the streets that as soon as there is a slight increase they tend to clamp down on whatever liberalising measures they have brought in; allowing people to export and so on, choke it off, keep the rice inside, keep the price down.”
The military government have presided over a terrific collapse in Burma’s status as a rice producer. During the colonial period the country was the largest exporter of rice on the planet. It now exports less than 1/8 of that which neighbour Thailand does.
“They [the military government] just insist on buying it at a low price and because they don’t provide credit or any sort of support for critical inputs or so on, what tends to happen is that production is really low, quality is low, yields per hectare are really low” Turnell adds.
The need therefore to maintain prices for political ends can be a double bind for agriculturalists and traders as artificially low prices make these people vulnerable to instances such as poor weather conditions that have been witnessed this year. Bare in mind that 70% of Burma’s work force are employed in agriculture.
This therefore adds, as Turnell suggests to food insecurity. For whilst greater liberalisation can lead to price fluctuations, competitive pricings also naturally reflect supply and demand and incentivise farmers to produce more, which then can create surplus’ with which to either export or to store in order that food prices may be maintained when adverse weather conditions play havoc with crops and subsequent pricing.
The fragile food security issue was highlighted this week as reports from Rangoon suggested that the closure of the Thai border crossings had induced a sharp rise in prices for basic commodities that are often imported from Thailand. A housewife in Rangoon told DVB that prices of Thai-made food products have gone up significantly – the price of a 1.5 litre bottle of cooking-oil which previously stood at 2800 Kyat (US$ 2.80) has now gone up to 4000 Kyat (US$ 4) and a pack of biscuits at 1400 Kyat (US$1.40) previously is now 1900 Kyat (US$ 1.90).
The country’s economy is relatively shielded from global commodity fluctuations being so isolated. It is not however isolated from the effects of global climate change or the ravages of hunger, amongst either pure consumers or those agriculturalists ravaged economically by the government who provide no credit and have destroyed agricultural unions effectively crippling a massive chunk of the Burmese economy.
Whilst the utter lack of foresight or long term planning means that the gradual change in climate will most likely reduce harvests year on year. Without government involvement to mitigate the effects of a harsher climate, the number of those experiencing food insecurity will grow from the current estimate of 1 in 10 living below the food poverty line and 1 in 3 children considered chronically malnourished.
Burma has the capacity to feed its people and export, it is in a privileged position in this respect, yet food insecurity looks like a spectre that not only ruins the lives of millions in Burma now, but looks set to be a serious cause of social unrest in years to come.
“…everything, now restrains itself and anxiously hopes for just two things: bread and circuses.”
Additional reporting by Naw Noreen
