Rice Shortages Provoke Panic at Home and Riots Abroad

April 23, 2008— -- Starting today, if you're a member of the warehouse shopping club Sam's Club, you will not be allowed to buy more than four bags of jasmine, basmati and long grain white rices.

BJ's Wholesale Club also said it reserves the right to limit rice purchases, and Costco said it's trying to deal with a spike in demand for both rice and flour.

"We don't want to create a panic where we don't think there is a panic, because if we weren't able to get any more rice or more flour, that would be a different story. But we are able to replenish our supplies," Costco president and CEO Jim Sinegal said.

He said he doesn't want to set off a panic, but some people worry that announcements like these will do just that.

"The danger is that when you do it, you cause the problem to get worse," professor and Brookings Institution economist Colin Bradford said. "This starts a panic ... as governments try to protect themselves on this front, the problem is that people get scared and they hoard — [a] vicious cycle."

"What we are looking at is one of the manifestations of tightening food supplies. Rice prices are skyrocketing," said Lester Brown, president of the Earth Policy Institute and author of "Plan B 3.0: Mobilizing to Save Civilization."

According to Brown, older people living on social security and single mothers are the ones in serious trouble. But the shortage will be annoying, not life-threatening, for most Americans because the United States, compared to other countries, is sheltered from commodity price increases.

"This [shortage] is not very common. I mean, I have to go back to my memories of World War II to remember rationing in any serious way," Brown said.

This rationing is the result of the worldwide food price crisis, caused by rising demand for food in places like India and China, the rising cost of fuel to get food to market, and by the fact that enormous amounts of corn in the United States are being diverted to produce ethanol as an alternative to gasoline.

In the United States, this food crisis is unlikely to create the sort of riots and political instability that have occurred in poorer countries around the world in recent weeks. Brown pointed out that in Pakistan, military escorts are already following all trucks carrying grain, and are guarding grain silos.