Asian countries again float idea of rice cartel

Asian countries sought Friday to tame the spiraling rice market, with Thailand proposing an OPEC-style cartel for exporters and the Philippines shoring up supplies while aiming to end its status as the world's largest importer.

The moves came as prices for rice and other food staples have been rising rapidly around the world, sparking violent protests in Haiti and Egypt along with concerns of unrest elsewhere amid profiteering and hoarding.

The sudden crisis — the price of rice has more than tripled since January — has experts calling for major changes in food production to improve crop yields and cut waste.

"The world has come together in the past," said Robert Zeigler, director general of the International Rice Research Institute in Los Banos, Philippines. "I think they could come together again to make sure that humanity has enough to eat. We just need the political will."

Zeigler's comments came as Philippine President Gloria Macapagal Arroyo visited the institute, underscoring the need to show a grumbling public that the government is doing something to deal with the rice prices and stock. Arroyo has ordered a crackdown on speculators and angrily demanded to know why more people haven't been arrested.

Thailand, the world's biggest rice exporter, said it wants to form an OPEC-style cartel with Laos, Myanmar, Cambodia and Vietnam to give them more control over international rice prices.

"Though we are the food center of the world, we have had little influence on the price," Thai government spokesman Vichienchot Sukchokrat said. "With the oil price rising so much, we import expensive oil but sell rice very cheaply, and that's unfair to us and hurts our trade balance."

Laos Foreign Ministry spokesman Yong Chanthalansy said Friday his country would "seriously consider" the idea, saying a cartel would give the five countries "bargaining power."

The hike in rice prices has come amid global food inflation, poor weather in some rice-producing nations and demand that has outstripped supply. Some Asian countries, including India and Vietnam, have contributed to the problem by curbing rice exports to guarantee their own supplies.

Cambodia, which in the past has championed the rice cartel idea, also welcomed the latest proposal and said it was a "necessity" given the current global food crisis.

"By forming an association, we can help prevent a price war and exchange information about food security," Cambodia's chief government spokesman Khieu Kanharith said.

But the rice institute's Zeigler said it would be difficult to apply the OPEC model to rice.

"Rice is grown by millions of farmers in one, two, three hectares (acres) of land. Oil is produced by a few multinational companies in a few countries," Zeigler said. "So I think the differences are so large as to make any comparison between the two wild fantasies."

He would prefer to see a world buffer stock.

"If we stay at the status quo, we will always be battling shortages, and that is completely unacceptable," Zeigler said.

Chookiat Ophaswongse, president of the Thai Rice Exporters Association, said any rice cartel would have little impact because it would exclude big producers like India and Pakistan.

"When there is a crisis with rice, they (the government) talk about this cartel. It has never happened and I don't think it will," Chookiat said.

In the Philippines, Agriculture Secretary Arthur Yap said the government has secured 1.6 million tons of rice to make up for a 10% gap between domestic production and consumption. Still, the country is seeking to buy more for use as a buffer stock.

Yap accompanied Arroyo on her visit to the rice institute, which has been developing rice varieties that can withstand drought or floods to help farmers across the world.

He signed an agreement with the institute Friday to accelerate Philippine rice production.

Yap told reporters he expects the Philippines to achieve rice self-sufficiency by 2010 or 2011, barring bad weather, calling it "not a choice, but an imperative."

He said the plan focuses on irrigation, technology and credit support to farmers. It involves a joint breeding program to create high-yielding varieties, plus mapping new rice-growing areas.

Ambika Ahuja in Bangkok and Oliver Teves in Los Banos, Philippines, contributed to this report.