The New York Times (pg. A1)  [Printer-friendly version]
April 17, 2008

FROM SIX-YEAR DROUGHT IN AUSTRALIA, A GLOBAL CRISIS OVER RICE

By Keith Bradsher

Keith Bradsher reported from Australia last month and later added
updated information. Rose Skelton in Fadiouth, Senegal, contributed
reporting.

DENILIQUIN, Australia

Lindsay Renwick, the mayor of this dusty southern Australian town,
remembers the constant whir of the rice mill. "It was our little
heartbeat out there, tickety-tick-tickety," he said, imitating the
giant fans that dried the rice, "and now it has stopped."

The Deniliquin mill, the largest rice mill in the Southern Hemisphere,
once processed enough grain to meet the needs of 20 million people
around the world. But six long years of drought have taken a toll,
reducing Australia's rice crop by 98 percent and leading to the
mothballing of the mill last December.

Ten thousand miles separate the mill's hushed rows of oversized silos
and sheds -- beige, gray and now empty -- from the riotous streets of
Port-au-Prince, Haiti, but a widening global crisis unites them.

The collapse of Australia's rice production is one of several factors
contributing to a doubling of rice prices in the last three months --
increases that have led the world's largest exporters to restrict
exports severely, spurred panicked hoarding in Hong Kong and the
Philippines, and set off violent protests in countries including
Cameroon, Egypt, Ethiopia, Haiti, Indonesia, Italy, Ivory Coast,
Mauritania, the Philippines, Thailand, Uzbekistan and Yemen.

Drought affects every agricultural industry based here, not just rice
-- from sheepherding, the other mainstay in this dusty land, to the
cultivation of wine grapes, the fastest-growing crop here, with that
expansion often coming at the expense of rice.

The drought's effect on rice has produced the greatest impact on the
rest of the world, so far. It is one factor contributing to
skyrocketing prices, and many scientists believe it is among the
earliest signs that a warming planet is starting to affect food
production.

It is difficult to definitely link short-term changes in weather to
long-term climate change, but the unusually severe drought is
consistent with what climatologists predict will be a problem of
increasing frequency.

Indeed, the chief executive of the National Farmers' Federation in
Australia, Ben Fargher, says, "Climate change is potentially the
biggest risk to Australian agriculture."

Drought has already spurred significant changes in Australia's
agricultural heartland. Some farmers are abandoning rice, which
requires large amounts of water, to plant less water-intensive crops
like wheat or, especially here in southeastern Australia, wine grapes.
Other rice farmers have sold fields or water rights, usually to grape
growers.

Scientists and economists worry that the reallocation of scarce water
resources -- away from rice and other grains and toward more lucrative
crops and livestock -- threatens poor countries that import rice as a
dietary staple.

The global agricultural crisis is threatening to become political,
pitting the United States and other developed countries against the
developing world over the need for affordable food versus the need for
renewable energy. Many poorer nations worry that subsidies from rich
countries to support biofuels, which turn food, like corn, into fuel,
are pushing up the price of staples. The World Bank and the United
Nations Educational, Scientific and Cultural Organization called on
major agricultural nations to overhaul policies to avoid a social
explosion from rising food prices.

With rice, which is not used to make biofuel, the problem is
availability. Even in normal times, little of the world's rice is
actually exported -- more than 90 percent is consumed in the countries
where it is grown. In the last quarter-century, rice consumption has
outpaced production, with global reserves plunging by half just since
2000. A plant disease is hurting harvests in Vietnam, reducing supply.
And economic uncertainty has led producers to hoard rice and
speculators and investors to see it as a lucrative or at least safe
bet.

All these factors have made countries that buy rice on the global
market vulnerable to extreme price swings.

Senegal and Haiti each import four-fifths of their rice, and both have
faced mounting unrest as prices have increased. Police suppressed
violent demonstrations in Dakar on March 30, and unrest has spread to
other rice-dependent nations in West Africa, notably Ivory Coast. The
Haitian president, Rene Preval, after a week of riots, announced
subsidies for rice buyers on Saturday.

Scientists expect the problem to worsen. The Intergovernmental Panel
on Climate Change, set up by the United Nations, predicted last year
that even slight warming would lower agricultural output in the
tropics and subtropics.

Moderate warming could benefit crop and pasture yields in countries
far from the Equator, like Canada and Russia. In fact, the net effect
of moderate warming is likely to be higher total global food
production in the next several decades.

But the scientists said the effect would be uneven, and enormous
quantities of food would need to be shipped from areas farther from
the Equator to feed the populations of often less-affluent countries
closer to the Equator.

The panel predicted that even greater warming, which might happen by
late in this century if few or no limits are placed on greenhouse gas
emissions, would hurt total food output and cripple crops in many
countries.

Survival Techniques

Paul Lamine N'Dong, an elder in Joal, Senegal, worries that hot
weather and failing rains have already crippled his village's crop of
millet, a coarse grain eaten locally and traded for rice.

Sitting on a concrete dais reserved for elders, Mr. N'Dong said on a
recent morning, "The price rises very quickly, which means we really
have to go and look for money."

"It is live or die," he said.

For farmers in a richer nation like Australia, the effects of the
current drought are already significant.

The rice farmers who do not give up and sell their land or water
rights are experimenting with varieties or techniques that require
less water.

Still, Australia's total rice capacity has declined by about a third
because many farmers have permanently sold water rights, mostly for
grape production. And production last year was far lower because of a
severe shortage of water; rice farmers received one-eighth of the
water they are usually promised by the government.

The accidental beneficiaries of these conditions have been the farmers
who grow wine grapes in the river basin where the Deniliquin mill
stands silent.

Even with the recent doubling of rice prices, to around $1,000 a
metric ton for the high grades produced by Australia, it is even more
profitable to grow wine grapes. All told, wine grapes produce a pretax
profit of close to $2,000 an acre while rice produces a pretax profit
around $240 an acre.

Also selling water rights to grape growers are ranchers like Peter
Milliken, who raises sheep on 37,500 acres near Hay, Australia. Some
ranchers have water to sell because they are reducing the water they
use. Mr. Milliken is installing a buried nine-mile pipe to replace an
irrigation canal that lost up to 90 percent of its water to
evaporation -- and is planning for the day when he does not irrigate
at all.

Sheep farmers have already worked out cooperative arrangements to send
flocks to whatever fields have recently received rain, sometimes
herding or trucking them long distances. Keeping an eye on a flock,
Frank Cox, a drover, said recently, "We had to move the sheep because
they were dying of starvation, and truck them down here."

The drought is making rice harder to find. For instance, SunRice, the
Australian rice trading and marketing giant owned by the country's
rice growers, began preparing to mothball the Deniliquin mill five
months ago, when it noticed that Australian farmers were planting
almost no rice. To make sure that it could continue supplying the
domestic market, as well as export markets in Papua New Guinea, South
Pacific island nations, Taiwan and the Middle East, SunRice stepped up
rice purchases from other countries, said the chief executive, Gary
Helou.

The SunRice purchases became one among the many factors that are
making it harder for longtime rice importers elsewhere to find
supplies.

Researchers are looking for solutions to global rice shortages -- for
example, rice that blooms earlier in the day, when it is cooler, to
counter global warming. Rice plants that happen to bloom on hot days
are less likely to produce grains of rice, a difficulty that is
already starting to emerge in inland areas of China and other Asian
countries as temperatures begin to climb.

"There will be problems very soon unless we have new varieties of rice
in place," said Reiner Wassmann, climate change coordinator at the
International Rice Research Institute near Manila, a leader in
developing higher-yielding strains of rice for nearly half a century.

The recent reports of the Intergovernmental Panel on Climate Change
carried an important caveat that could make the news even worse: the
panel said that existing models for the effects of climate change on
agriculture did not yet include newer findings that global warming
could reduce rainfall and make it more variable.

Seeking Hardier Rice

Many agronomists contend that changes in the timing and amount of rain
are more important for crops than temperature changes. Rajendra K.
Pachauri, the chairman of the panel, said long-range climate forecasts
for precipitation would require another 5 to 20 years of research.

In addition to drought, climate change could also produce more extreme
weather, more pest and weed outbreaks, and changes in sea level as
polar ice melts. Most of the world's increase in rice production over
the last quarter-century has occurred close to sea level, in the
deltas of rivers like the Mekong in Vietnam, Chao Phraya in Thailand
and Ganges-Brahmaputra in Bangladesh.

Yet the effects of climate change are not uniformly bad for rice.
Rising concentrations of carbon dioxide, the main greenhouse gas, can
actually help rice and other crops -- although the effect dwindles or
disappears if the plants face excessive heat, inadequate water, severe
pollution or other stresses.

Still, the flexibility of farmers and ranchers here has persuaded some
climate experts that, particularly in developed countries, the effects
of climate change may be mitigated, if not completely avoided.

"I'm not as pessimistic as most people," said Will Steffen, the
director of the Fenner School of Environment and Society at Australian
National University. "Farmers are learning how to do things
differently."

Meanwhile, changes like the use of water to grow wine grapes instead
of rice carry their own costs, as the developing world is discovering.

"Rice is a staple food," said Graeme J. Haley, the general manager of
the town of Deniliquin. "Chardonnay is not."