MARKET PROSPECTS FOR RICE Framework for Commodity Lending in 1973-74

October 12, 1972

Trade Policies and Export Projections Division Economics Department

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TABLE OF CONTENTS

Page N:>.

SUMMARY i

I. BACKGROUND - THE MARKET AND THE RECORD 1

Salient Features of the Market 1

The Fbstwar Record 2

Production 2

Trade and Prices 5

The Green Revolution 7

'!he Experience 7

Implications 8

II. FUTURE PROSPECTS 10

Consumption 10

Production 12

Trade and Prices 13

Sensitivity of Trade and Price Forecasts 14

III. THE ROLE OF THE BANK GROUP 15

General Framework 15

Past Bank Group Finaming for Expanding Rice Production 16

P.lanned Financing for Fiscal Years 1973 and 1974 17

Impact of Bank Group Projects on the World Rice Economy 18

STATISTICAL ANNEX

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Tables and Charts

Text Tables

I. Rice Production, Consumption and Trade, 1969-71 Average

II. Developments in Wor+d Area, Yield and Production of Rice (Padqy), 1949-1971

III. Area Planted to High-Yielding Varieties (HYV) of Rice in Asian Countries, 1965/66-1970/71

IV. Rice - Summary of Consumption, Production and Trade by Economic Regions, 1961-63 and 1969-71, and Projections to 1980

v. International Price for Rice, 1960-1972 and Projections to 1980

VI. Past (1965-72) IBRD/IDA Rice Projects Production by 1980, by Country and Purpose

VII. IBRD/IDA Planned (FY 1973 and 1974) Rice Projects Production by 1980, by Country and Purpose.

VIII. Contribution of Bank Rice Projects, Past and P.l.anned, to Meeting Additional Requirements by 1980

Charts

1. Rice (paddy): kea, Production an:i Yield per Hectare i.n Asian Developing Countries, 1949-1971

2. Relation between Rice (paddy) Yields per Hectare and Percent of Area Irrigated in Major Asian Countries in 1969/70

3. Rice - Volume of Exports by Economic Regions, 1963-1971

4. Rice: Export Earnings by Economic Regions and Export Unit Value for Developing Countries, 1963-1971

Annex Tables

1. Production of Paddy by Regions and Selected Countries, 1949-1971

2. Pattern of World Exports and Imports, 1959-1971

3. Exports by Economic Regions, Volume, Value and Unit Value, 1963-65 average and 1966 to 1971

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4. International Market Prices for long-Medium Grain Rice, 1957-1972

5. Production, Consumption and Trade, 1964-66 Average, 1970 and Projections for 1980

6. Focports by &onomic Regions and Major Countries, Actual 1964-66 and 1969-71, Projections for 1980

7. Imports by &onomic Regions and Major Countries, Actual 1964-66 and 1969-71, Projections for 1980

8. Per Capita Food ConsUDlPtion of Rice, Wheat and other Cereals in Developing Countries, 1964-66, 1970 and Projections for 1980

9. ~rld Bank Group Participation in Financing of Rice Production, 1965 to 1972

SUMMARY

1. This report has been designed to provide the market foundation for rice projects to be submitted to the Board in fiscal 1973 and 1974. It will replace the individual annexes which presently accompany each project report, and should give a better perspective to the Bank's lending program for rice production.

2. The analysis indicates that world consumption of rice in the decade 1970-1980 is expected to grow by nearly 60 million tons, averaging an arum.al growth rate of 2. 7 percent. The bulk of the expansion would be in developing countries, where an increase in total consumption of 40 million tons will result only in a marginal increase (less than 4 percent) in per capita intake. Since export availability in rice-surplus countries could not by any reasonable expectation be increased to anything like the amount needed, the only alternative is to expand rice production in rice-deficit countries. This is particularly desirable, since in addition to being their staple food, rice constitutes a major source of employment and income in many developing countries.

3. Moreover, some efficient LDCs exporting countries will need to ex-pand their production to meet growing domestic consumption and to enable them to achieve a satisfactory level of export earnings from rice.

4. Given the scarcity of suitable new rice land, efforts to raise productivity per hectare are a necessity. The "green revolution" has offered unique opportunities for attaining this goal. However, the momentum created by the initial successful adoption of the new high-yielding varieties of rice cannot be maintained without a program of investment, both private and public, in irrigation and water control, fertilizers, pesticides, transportation and marketing facilities - all of which are indispensable companions of the new technology.

5. Past and planned Bank Group projects for fiscal 1973 and 1974 should add some 3.5 million tons or 8.8 percent of the LDCs total additional require­ments by 1980. The residual requirement would still be about 37 million tons. Still more must be done. The paper proposes that (a) there is no alternative to investing in rice as a stimulus to overall growth in a number of countries; and (b) the price of not investing could be high indeed. Inadequate invest­ment could leave the new production potential of the green revolution unreal­ized and could precipitate renewed food crises. Such crises would result less from technological weaknesses in production than from neglected oppor­tunities, now presented for modernizing agriculture.

6. The Secretariat of the FAO Intergoverrunental Group on Rice has been consulted on the probable impact of Bank Group rice projects on world markets. They "broadly agree on the analysis" and "support the proposed Bank Group role in expanding rice production", as outlined in the paper.

I. BACKGROUND - THE I1ARKET AND THE RECORD

Salient Features of the Market

1. Rice is the staple food of about half of the world's population. It provides the main dietary source of energy for about 2 billion people in Asia alone and constitutes the 11preferred grain" in many areas of Africa, the Near East and Latin America. Every year roughly 200 million tons of rice are produced and consumed, the great majority of it in the developing countries and centrally planned economies (Table I). As it is principally a subsistence crop, only 3-4 percent of global output enters world trade; the rest (96-97 percent) is consumed in the producing countries - 50 per­cent right on the farm where it is grown • .Y'

Table I: RICE PRODUCTION, CONSUMPTION AND TRADE, 1969-71 AVERAGE

Developed countries Developing countries

Asia Centrally planned

(million tons, milled basis)

Production

15.9 113.7

(100.2) 199.1

Consumption

13.4 114.4

(100.5) 197.1

Exports

2.8 3.7

(2.6) 7.4

Imports

o.B 5.8

(4.1) 7.2

2. Although developed countries account for less than 10 percent of world rice production and consumption, they share disproportionately in world trade which, as noted, is not large to begin with. They export one­sixth of their output and supply 35-40 percent of world import requirements. However, a very large portion of this flow represents sales on concessional terms, mostly by the United States and Japan, to rice-deficit countries in Asia. Only a handful of LDCs (notably Burma, the Khmer Republic and Thai­land) derive a significant portion of their foreign exchange earnings from the export of rice.

3. This notwithstanding, rice plays an important role (second to that of no other crop) in a large number of developing countries, most of which fall in the 11 least-developed" category. Its role is multi-pronged; in addition to being the staple food, rice constitutes a major, and in some countries the largest, source of employment and income, especially among the lowest income bracket segment of the population. Rice, there­fore, should not be viewed simply as 11 an important food crop 11 , but as a

1( For detailed data on rice production and trade, see Annex Tables 1 and 2, respectively.

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crop whose production represents an activity not to be disassociated from the overall economic performance of the LDCs.

4. The importance of rice, so defined, is not likely to diminish in the foreseeable future. Mbre rice will be required and will have to be produced. Although changes in income seem to have little effect on con­sumption in the traditional exporting countries of Asia, in other areas (e.g., west Africa) where rice is almost a luxury, the income elasticity of demand approaches unity. Furthermore, many of the countries most de­pendent on rice for their basic food requirements, where rice has indeed no acceptable substitute, are among those with the highest rates of popu­lation growth. While government action in relation to rice has certainly not always worked for the good in a number of countries, neglect rather than action has traditionally been the greater sin.

5. Another important feature which characterizes the world rice economy - one which is more keenly appreciated by farmers than by econo­mists - is common fluctuations in production, trade and prices. The in­stability of production derives chiefly from the impact of unpredictable natural forces on a number of factors, particularly the water supply, which is still the key variable input in rice cultivations since a large part of the crop is dependent on uncertain rains. Pests and diseases, also, are common occurrences in some rice-producing countries. These, plus the price inelasticity of demand and inadequate marketing facilities, have a strong effect on local market conditions, price levels and foreign trade. Consequently, in this commodity, it would be as unsound to draw up long-term plans on the assumption of an indefinite prolongation of surplus or deficit market situations, as it would be to bank on the absence of ad­verse fluctuations.

The Postwar Record

6. Production - ~rld paddy production during the fifties rose at an annual rate of ].2 percent. As Table II indicates, there was a substan­tial increase in the productivity of rice land, with world average yields rising from about 1.7 tons per hectare in 1949-53 to 2 tons in 1959-63. Yield gains explained 56 percent of the production increase, with the re­maining 44 percent accounted for by extension of area planted. This de­velopment was a major achievement considering the fact that durj.ng the first half of the century over 90 percent of the gain in production had been obtained by area expansion; only minor improvements in productivity had been achieved, despite great efforts by many countries.

7. The growth rate of world production experienced in the fifties was not maintained in the first half of the sixties: between 1959-63 and 1964-66, the rate of growth amounted to only 1.6 percent, half of that reached in the fifties. The deceleration was particularly marked in Asia, where exceptionally adverse weather conditions in 1965 and again in 1966 (including unprecedented drought in India) reduced yields sharply in these two years. As a result production in the region declined, even though the area planted had expanded at almost the same rate as in the past (Chart 1).

Chart 1 - Rice (paddy): Area,Production and Yield per Hectare in Asian

Developing Countries,ll 1949-1971

Million tons or ha Kg/hectare

180

160

140

120

100

80

,,, ... - --· -Production

,,, ,,,. " (left scale) ,

\,, ,, ', ,.~ ,, ' ;' ,,, ,..., ·---- , .......... ....... tl'

,.~ ... ·~~ ... ..

;' .... ··. ..... . ( \ )

, .. ,,; ... .... .. . . , ······ .. .. Y1eld nght scale ,,, .... . ....... . .. ,, .. ""'"

.. .. ·" . .......... .

········ ------ II'"'

At ····· 60

(left scale)

1949-53 1954-58 average

1959-63 1964 1965 1966 1967 1968 1969 1970 1971 (Prov.) average average

!! Asian countries, excluding Japan and China (Mainland)

Yield Metric tons per ha

Chart 2: Relation Between Rice (Paddy) Yields per Hectare and Percent of Area Irrigated in Major Asian Countries in 1969/70 .!J

6,------,-------.------.-------,-------,------,-------.-------.------~------,

Japan. (406)

5r------+-------r------4-------+-------~----~-------+-------r------~------~

Korea Rep.. I ~

4r------r------~-----r------~-----r------~-----+-(-23_1_'--+=~~~--J~-----=~ I ~ ~ Chmal (Taiwan). V\ (309)

I ~ y ~ 6.6247 + .4035 X

~ (.065) 3r-------~--------+--------+--------+--------4----~~~--------+--------+---R2 ~.8o--------~

Malaysia (West) ~

7(37) ~ Ceylon

•• (60)

Viet-Nam Rep. _/ (61) -~· ....,....- ,.!ndonesia

~ - (18)+-------~------~------4-------~

• ~Philippines

Burma (20) • . (4) lnd1a

(9)

2

.J -. er Rep. ~ --(2) ------+-------t-------1r------t-------+------+------+---------J

OL-----~------L-____ _L ______ L_ ____ _L ______ L_ ____ _L ______ ~----~------~

2,200

2,000

1,800

1,600

1.400

1,200

0 10 20 30 40 50 60 70 80 90 100 Percent of Rice Area Irrigated

!f Kilograms of fertilizers used per hectare of arable land, in brackets. World Bank-7026

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Prices, both domestic and international, rose to their highest level in :many years, and the efforts of many "deficit countries" to reduce their dependence on imports suffered a severe setback.

Table II: DEVELOPMENTS IN WORLD AREA, YIELD AND PRODUCTION OF RICE (PADDY), 1949-1971

Area Yield Production

(million (tons per (million hectares) hectare) tons/paddy)

Averages

1949-53 104.5 1.68 175.1 1959-63 120.2 2.00 240.4

1964-66 125.7 2.04 256.6 1969-71 135.1 2.24 302.9

Growth Rates (----------percent per year----------)

1949-53 to 1959-63 1.4 1.8 3.2 1959-63 to 1969-71 1.3 1.3 2.6

1959-63 to 1964-66 1.2 0.4 1.6 1964-66 to 1969-71 1.5 1.9 3.4

Percent of Production

Increase Explained by Yield Gains

(percent)

56 50

25 56

8. In the second half of the sixties world rice production recovered dramatically. The growth rate accelerated to 3.4 percent per year - more than twice the rate of the preceding five years. Several factors contrib­uted to this development: favorable weather conditions, expansion of area planted, increased use of fertilizers and introduction of the new high­yielding rice varieties in a number of countries.

9. However, a closer look at the growth of rice production in the 1960's shows that the much publicized increase in Asian output in recent years, attributed by some sources chiefly to the "green revolution", mainly reflects a recovery to the normal pace of growth which was interrupted by exceptionally adverse weather conditions in 1965 and 1966. On a global basis, the growth rate for the period 1959-63 to 1969-71 which is not af­fected by the bad years in between was actually lower (2.6 percent per year) than in the previous decade (3.2 percent). Furthermore, the contribution of area expansion to production growth during the last decade as a whole was as important as that of the increase in yields.

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10. Trade and Prices - As noted earlier, international trade in rice, particularly that of the Asian region, though small in relation to the vol­ume of loX>rld output, is a good barometer of changes in the global demand/ supply configuration. Until the mid-sixties, the Asian continent included two distinct groups: one co.D¥>rising chronically deficit countries such as Ceylon, India, Indonesia, Japan, Bangladesh (former East Pakistan) and the Philippines; the other, a group of established exporters such as Burma, Thailand, Cambodia (now the Khmer Republic) and the two Chinas. The volume of rice imports by individual deficit countries varied from year to year in response to fluctuations in domestic supplies. However, lower requirements of one country in a particular year were usually compensated by higher re­quirements elsewhere. As a result, the volume of rice trade up to the mid-1960's remained fairly stable. The acute world shortage resulting from the Indian crop failures of 1965 and 1966 and the inability of the major rice exporting countries to meet the increased import demand, reduced somewhat the volume of world trade in 1966 and 1967. Prices in the international markets rose by about 50 percent to their highest levels since the Korean War (Annex Tables 3 and 4).

11. The recovery in output experienced since 1967 was accompanied by significant structural changes, although the aggregate volume of rice trade was not significantly affected. Japan, previously a large importer, became a large exporter on concessional terms. India and the Philippines (until 1971) which also had been large importers became virtually self-sufficient. At the same time, a number of traditional "deficit countries" such as Ceylon, Indonesia and Malaysia reduced their dependence on imports. On the other hand, exports by traditional exporters such as Burma and Thailand were greatly reduced; South Korea and South Vietnam, formerly exporters, became large importers on concessional terms. These and other developments brought about a marked shift in the source of supplies from the developing to the developed countries, as illustrated in Charts 3 and 4.

12. It is significant to note that the increase in developed countries' shipments (those of the United States, Japan and Italy) reflects almost en­tirely a rise in concessional and subsidized sales. Concessional. sales, which had accounted for no more than 10 percent of the volume in the early 1960's, amounted to about 30 percent of world trade in 1971. This acted to reduce demand on the commercial market and had a strong impact on prices. Consequently, the developing countries' export earnings from rice, suffer­ing from decreases in both volume and price, shrank from about $56o million in 1963-65 to $360 million in 1971; at the same time those of the developed countries jumped from about $250 million to $450 million (Annex Table 3).

13. In the first part of 1972, higher import demand by the Philippines and Bangladesh, and the decision of Japan to limit concessional exports, have added new elements to the market. Export prices of rice have advanced and might strengthen further by the end of the marketing season. :r-:breover, the recent increase in the prices of wheat and other grains resulted from the large purchases of wheat by the USSR and expectations of further sales to China (Mainland) will have an effect on the rice market in the short run. Fluctuations in rice production and changes in cereals trade policies in

Million tons 8

6

~--------.. 1' .... 4

2

Chart 3- Rice: Volume of Exports by Economic Regions 1963-1971

WORLD -~

........ ........ .......... --~ElOPING

__________ .._ ...... ............ t-C.£~~~---· ... .....

DEVELOPED ~<?~}~!~'-~~ .••••••• ···········

······ ................... ..

-

~-----... ......... -

. ..................

.................. ••·······•

--0

1963-65 average

-------- ....._~NTRALLY PLANNED -..-..... ........ .._....._.. --- -----~--- ,_, ,_, ,__,

1966 1967 1968 1969 1970

Chart 4- Rice: Export Earnings by Economic Regions and Export Unit Value for Developing Countries, 1963-1971

1971

Millionru_s_$'---r----,---...,---..----,----,----,----r---r----,----,----,----r---=U-=S.;:;;$/m. ton r---_._r -r---__.__l_r---__._l_-t-::.;__.,~-r----l'--t---1L__-+---.L__'--~ 170

~ ~ ""'-..._ leveloping Countriel Export / , ""'- / Unit Value (right scale)

r----t----/-t--711~~-~"<:~~~150

............... ~ EXPORT EARNINGS """'""

130

~------+-------~D~e-v-el~o-p-ed~---+-~(~le~ft~sca~le~)-~-----------+----~~~-----+--------------~ 110

]Countries .............. ~

~-~::~:l~'"T''"~i!Hiil--:t~il~~~~~~~-j---J!IIIilt---r-~~~~~~~~~--tD'~evfe:lo:p:i:ng:::---ll----~::~------l '""'I """'""' '""""' 7W'• 800

l_gttml_mm lJ!i!iil!ii!iit;lLI//U::!J.i::.l:i:i·~= __ .... ·='·_ ..... ·='_ ...... ·='_ ... ···:' .. ······:J····:···' .. ···:···' .. ···:'·· ... ····:'· ... ···:'· ... ····:'· ... ····:'.·······:'.···:···' .. ··:'···· ... ·:···' .. ···:···;

1

' ::::=:=:=:=:=:=: \\\~tr--600 ~---- ~.l.l_l.l_l.l_l.ll.ll.ll.ll_l ~=!=!=l=l=!=l=l.=!=l.=l=!_=r=!.=!=i.=!:._--+-4l_~.:l_l.l_l=l.l.:_~-=~l.l=l·l=l·l=:_:=~----+--l ·1--+---1 I/ · · · .. · .. :t---+-4 .. · ...... It J:!j~ 1*1il~~ l---+---l1.Wii~:?i·.:,.· ---+--;~~;.:.,:j1--+-~ 1·: ,. ·•·••••••••••••···~

'----l---1·_·_:·:-:·_::_·_~-·_:_,:·_··.:.~·-· __ :~.: __ ·_:·_-_: ___ :_:_:·,: __ .·.~::··_:,::·_.:.·:~.-.:.~.-_.,:,·_~-.. :·:·:~-~--~--__ -_·_;::_r_ .. ··-· __ -~--.. ·:~:-_:_·_,_-,·_· ... '·_.·.·:.· __ :~-~_:·.::::_:-._ .• : __ .~.',·_ .• -•. : __ ::·~_-.::_:,.-·:·;··_:··-:::,·.· ... -__ .-··_-. __ : --+--1 :~~~iWi · .. ~f\:;;y(? j;~iw};~f .r .-:.; .:: -. ~ ·r l---ll--4·.· .• ·•· •• '.:· ... ··.: .. ::_ .. '::······--,_ •. ~.:_':'_0 ••• ,~--~···.-·.·.·:7··{·.=._·:_ .. :.::··:''~:···:·_,· •.•.. :····.=.-.·.;····.·.·:·:·····.'.',· .. · .••. · .. ·;·.::..~ •... ;~--.· •. ····.·,:;:':· . •. ••.··~ :·... -.· ...... , ... . oL-~~~~~-~--~~~~--~---U~~~L-~--~~--~:1_~-~~-~~~--L-~-W~~~--~--~~~~~i~i~~~~~!L-~--~!~~~~~~~l~t~J~;r---__ ~

_! _I 19167 I I l I 1963-65 1966 1968 1969 1970 1971

90

average

World Bank-7083

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major countries are again showing, as in the past, their strong effect on international rice prices.

The Green Revolution

lh. What has been the role of the green revolution in shaping the recent growth in production and in bringing about the structural changes in trends summarized above? Looking at the global figures as we have done so far tends to obscure the record.

1.5. The Experience - The term "green revolution" refers to the scien-tific breakthrough which occurred in the breeding of high-yielding varieties (HYV) of wheat, rice, maize, sorghum and millet in the last decade. In the case of rice, the biological breakthrough resulted in the combination of the desirable characteristics of the "Japonica" variety with those of the "Indica" variety. "Japonica" is characterized by dwarfism, which is asso­ciated with high grain yield, less susceptibility to lodging and non-photo­sensitivity, which reduces the maturity period and permits double cropping. "Indica" has better grain quality due to seed dormancy and greater resis­tance to disease in tropical conditions. A so-called 11package of inputs 11 ,

which includes irrigation and water control, fertilizers and methods to control weeds, disease and pests, is needed to allow the new varieties to reach their full yield potential. The essential difference between the high-yielding varieties and traditional varieties is their ability to re­spond to these inputs. 1(

16. Diffusion of the new rice technology in Asia has been very rapid in the last five years. Initially, the area planted to the new varieties was concentrated in India and the Philippines, but more recently the new strains have also become popular in Pakistan, Indonesia and Malaysia. Among the rice exporting countries, Thailand and Burma have only very re­cently adopted new locally developed HYV of rice, in limited quantities. During the 1970/71 crop year, 13 percent of the rice area in South and South East Asia, or some 10.2 million hectares, was planted to high-yield­ing varieties. The rate varied widely among countries, ranging from as little as 2.1 percent in Thailand to a maximum of 50.3 percent in the Philippines (Table III).

17. Although the high-yielding varieties have without doubt contri-buted to the rapid increase of rice production in Asia since 1966, it is not possible to quantify their net effect with accuracy. However, some indication may be derived from the experiences of Malaysia, Pakistan (for­merly West) and the Philippines, where the use of HYV went furthest. The average yearly growth rates of output in these three countries in the sec­ond half of the sixties were 10 percent for Pakistan, 7 percent for }~laysia and .5 percent for the Philippines - all above the average of 3.8 percent for

!/ R. Barker, "The Evolutionary Nature of the New Rice Technology", IRRI Mimeograph.

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the Asian developing countries as a group. It is quite significant that Pakistan, where only 42 percent of the area under rice has been planted with high-yielding varieties, experienced a production growth rate fully twice as high as that of the Philippines, whose rice area under HYV was greater (50.3 percent). Though the far less impressive achievement of the Philippines can be explained to some extent by the damage inflicted on the 1971 crop by the "tungro" virus, the main reason has been that some of the new varieties have been planted on non-irrigated land. In comparison, in Pakistan and I1alaysia where progress has been striking, HYV have been used on fertile soils with extensive irrigation developments.

18. Adequately controlled water supply has emerged as the most im-portant and indispensable partner of the high-~elding varieties in maxi­mizing the potential of the new technology. 11 Paddy yields in Asia show a strong correlation with the relative size of the area irrigated (Chart 2).

19. L~lications - The biological breakthrough referred to as the "green revolution" has opened up vast opportunities for increasing rice yields and for greater cropping intensity through multiple cropping and improved crop rotation. As stated by the FAO Secretariat, "the new vari­eties are not merely a stage in an evolutionary process, but represent a shift of the production function to &~ altogether higher phase of produc­tivity". ,g/ They have, however, also brought with them the technical re­quirements of cultivation of the "Japonica" varieties; these include heavy dos~of fertilizers, superior water control and management, and such draw­backs as the susceptibility to pests and diseases, floods and droughts. MOreover, the acceptance of the first HYV (IR8) has been limited in the past by their palatability and milling quality. More recently, locally developed HYV which have been introduced in various countries have over­come some of the problems.

20. Admittedly, the new rice varieties have not brought about a dra-matic upturn in the global production trend and have not matched the suc­cess of the new v1heat varieties. However, combined with advances in the technology of wheat production, they have engende~ed optimism regarding

1/ Irrigation, in order to be effective, has to be combined with adequate water control. The present irrigation sys~ems in Asia frequently do not allow individual farmers to control the ti~ and quantity of water to enable them to take full advantage of the potential of the HYV and of the other inputs used. The advantages of full water control are two­fold: first, yields are increased; second, water is saved which c~D be used to expand irrigated area and increase double cropping. (See IBRD, !griculture Sector Working Paper, June 1972, p. ?.)

f/ FAO, Rice Report, 1970, p. 16.

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Table III: AREA PLANTED TO HIGH-YIELDING VARIETIES (HYV) OF RICE IN ASIAN COUNTRIES, TOTAL (1965/66-1970/71) AND

AS PERCENT OF TOTAL RICE AREA (1970/71)

(Thousand hectares)

(1) (2) (3) (4) 1965/66 1967/68 1969/70 1970/71

Bangladesh 67 264 460 Burma~ 3 144 201 Ceylo 2 26 30 India/1 7 1,784 4,342 S,Sol IndonesiaLl 750 932 laos 1 2 54 Malaysia (West) 64 96 132 Nepal so 68 Pakistan (West) 4 SOl 626 Philippines/1 701 1,354 l,S6S Thailand 162Li Vietnam Republic 201 502

Total 7 2,625 7, 731 10,233

L1, Includes improved local varieties.

(S) (6) 1970/71

Total area % HYV area under rice of total rice

area (4)/(S)

9,912 4.6 4,976 4.0

651& 4.6 37,431 14.7 8,237 11.3

769& 7.0 541 24.4

1,173& s.8 1,503 41.7 3,112 so.) 7,600 2.1 2,599 19.3

78,504 13.0

L£ Excludes improved local varieties (averaging about SOO,OOO hectares).

Ll Rough unofficial estimate.

Lk 1969/70 area.

Source: US Department of Agriculture, Foreign Economic Development Service, Imports and Plantings of High-Yielding Varieties of Wheat and Rice in the Less Developed Nations, FADR-14, February 1972.

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the possibilities of food production in Asia. !/ 1'-breover, they have served as a "catalyst" of major changes in other areas such as transportation and storage. Finally, the green revolution in rice, its record and promise, should be viewed in proper perspective. Where suitable rice land is scarce -and such land is scarce in many Asian countries - adopting the new varieties, with the requisite improvements in cultural practices and infrastructure, is not a luxury but a necessity. This is presently the most promising avenue for reducing the area needed for rice production and, at the same time, for prorooting diversification to other profitable crops. In view of the added opportunities it affords for mu1 tiple cropping, it is also an important means by which the bulk of th~ growing labor force in rural areas can be absorbed into productive work. £f

21. The foregoing leads to two tentative conclusions. The "green rev­olution" in rice, though of impressive proportion in certain areas, does not lend support to the intermittently heard predictions of vast surpluses. While it does carry a certain momentum, this momentum cannot be maintained, let alone be accelerated, without a program of private and public investment -particularly in water resources.

II. FUTURE PROSPECTS

22. Our assessment of the long-term prospects for rice consumption, production and trade is summarized in Table IV; details are given in Annex Tables 5-8. The figures shown are based on projections by the FAO Secre­tariat 11 plus, where appropriate, estimates by IBRD sector or country mis­sions. k/ The broad assumptions underlying the forecasts will be noted below.

23. Cons~~tion - World consumption of rice in the decade 1970-Bo is expected to grow by nearly 60 million tons, or about 30 percent; the annual average growth rate, 2.7 percent, would be only fractionally higher than

1/ International Rice Research Institute, Rice Research and Training in the 70's, Los Banos, 1969.

£1 FAO, Rice Report 1970, Rome, 1970; and IBRD !griculture Sector Working Paper, June 1972.

1( FAO, Agricultural Commodity Projections, 1970-1980, Rome, 1971.

k( The major adjustments made to the FAO estimates for 1980 include (a) re­ducing the export figures for the United States, Burma, Thailand and the two Chinas; (b) reducing the import figure for Indonesia; and (c) raising the import estimate for Bangladesh. The combination of the above changes resulted in a downward adjustment of the FAO-projected 11 surplusn from 2.6 million tons to O.h million, as will be shown later. However, both of these "surplus 11 estimates are very small in relation to world production and even a small deviation in output could alter the picture radically.

- 11 -

Table IV: RICE (MILLED) - SUMMARY OF CONSUMPTION,P.RDDUCTION AND TRADE BY ECONOMIC REGIONS, 1961-63 AND 1969-71 AND PROJECTIONS TO 1980

.Ao.tual Projected Growth rates 1961-63 1969-71/l 1980 1961-63 to 1969-71 to

1969-71 1980

(Million tons, milled basis ) (Percent per year)

ConsumEtion Developed countries 14.4 13.4 13.9 -0.9 0.4 Developing countries 88.6 114.4 154.6 3.2 3.1 Centrally planned 58.1 69.3 88.4 2.2 2.5

World 161.6 197.1 256.9 2.5 2.7

ProdUction Developed countries 15.0 15.9 15.1 0.7 -0.5 Developing countries 89.3 113.7 153-7 3.1 3.1 Centrally planned 58.2 69.5 88.5 2.2 2.5

World 162.5 199.1 257.4 2.6 2.6

Exports Developed countries 1.3 2.8 2.0 10.1 -3.3 Developing countries 4.3 3.7 4.4 -1.8 1.9 Centrally planned 0.6 0.9 0.6 5.6 -4.0

World 6.3 7-4 7.1 2.1 -0.5

Imports Developed countries 0.9 0.8 0.9 -1.5 0.2 Developing countries 4. 7 5.8 5.3 2.7 -0.8 Centrally planned 0.4 0.6 0.5 4.9 -2.0

World 6.0 7-2 6.6 2.3 -0.8

NOte: For country details see Annex Tables 5, 6 and 7. Total may not add up because of rounding.

/1 Trend value for 1970 for production and consumption; see Annex Table 5.

Source: Annex Tables 5, 6 and~ and FAO, Commodity Review (various issues).

- 12 -

during most of the sixties. The increase would be rather modest in de­veloped countries (0.4 percent per annum) and most pronounced in devel­oping countries (3.1 percent per annum), particularly in Asia where rice remains the principal staple in the diet. This forecast is based on the following assumptions: (a) increase in population and income as projected by FAD; (b) substitution in some countries of protein-rich foods for rice; (c) continued shift in several areas from conswrzption of other grains and starchy foods to rice; and (d) a decline in rice and wheat trade on con­cessional terms.

24. It should be noted that the above figures allow for only a !!!2£,­ginal increase (less than 4 percent) in LDCs' rice consumption pez: capita between 1970 and 1980. Wheat consumption is assumed to increase margin­ally on a per capita basis, and coarse grains not at all. Thus, total per capita food availability of all cereals is estimated to rise from 133 kilo­grams in 1970 to only 137 kilograms in 1980 (Annex Table 8). At the stage of economic development which is likely to prevail in most developing coun­tries in the 1970's, the staple foods, cereals in particular, will again play the major role in pz'Oviding the bulk of the nutritional requirements.

24. Production - World production, which in the base period slightly exceeded consumption, would have to rise by some 58 million tons in order to cover projected requirements. The implied growth rate of 2.6 percent would be well below the exceptionally high rate of 3.4 percent of the last five years but in line with the long-term trend. In view of the consump­tion pattern and the inability of developing countries to meet more than a minor fraction of their requirements by imports from other regions, most of the increase would have to be concentrated in the developing countries of Asia, where an increase of some 35 million tons would be needed. The tentative figure for Western Africa - growth from 1.4 million tons to 2.3 million tons - has been based on data for production plans in that area. The Japanese program of gradual reduction of rice output would lead to a decline of production in developed countries. 17 The rise shown for cen­trally planned countries reflects growth in I1ainland China 1 s production, as projected by FAO.

25. The prospective rise in production in the developing countries, the group of greatest interest here, is based on the assumptions of (a) "normal" weather fluctuations, but no widespread crop failures such

1( Japan has recently adopted a policy of production restraint and utili­zation of surplus stocks of rice for feed and other industrial uses. According to the Japanese Food Agency projections, the surplus rice stock which stood at 6.5 million tons on April 11, 1971, and which was reduced to 3.7 million tons by April 1, 1972, will be further reduced to 0.6 million tons by April 1, 1974. Only about 400,000 tons >-Jill be exported in Fiscal 1972 (April 1, 1972-March 31, 1973) compared to over 900,000 tons in 1971.

- 13 -

as in 1965 and 1966; (b) continuation of present national rice policies aiming at a greater degree of self-sufficiency in net importing countries; and (c) continued increase in the use of high-yielding varieties where irrigation and water control can be increased and ecological conditions are favorable.

26. Trade and Prices - Trade in rice, estimated as the difference between projected production and consumption in net exporting and import­ing countries, would be by 1980 slightly below its current levels, as import requirements by some Far Eastern countries are expected to decline. (See Annex Tables 6 and 7.) The proportion of rice entering world trade would by 1980 shrink to 2.8 percent of estimated world production as com­pared to 3.7 percent in 1969-71. The commercial market for rice, however, should increase in total volume.

27. Several changes in the pattern of trade are expected: exports from traditional exporters among the LDCs' (including Thailand, Burma and the UAR) would increase substantially, while those from developed countries would be lower, reflecting mainly the cessation of Japanese shipments and, to some extent, lower concessional and subsidized sales by the United States and Italy. The United States would, however, remain the world's largest exporter. Ship­ments from China (Mainland) should also decline, since the country's past policy of importing wheat and exporting rice should become less profitable at the already reduced prices of rice relative to those of wheat.

28. In the Far East, Indonesia and the Republics of Korea and Viet Nam are projected to remain substantial importers of rice, mainly on con­cessional terms, while Ceylon will probably continue to buy rice from China (I~nland) under the rice-rubber barter agreement. Traditional im­porters in the Near East, Hong Kong and Singapore should increase their purchases in line with recent trends. Imports by Latin America and a num­ber of African countries should show a moderate increase. Imports into West Africa, however, are expected to remain at present levels mainly be­cause of balance of payment constraints.

29. Under the above scenario of lower import requirements of Far Eastern countries and of continuing availability of rice and wheat on con­cessional and subsidized terms, international prices in current dollars are expected to be in 1980 only marginally above recent low levels. By 1980 the actual price of the better quality Thai rice 5 percent brokens is forecast to be around $135-145 per metric ton f.o.b. Bangkok- equivalent to $115-124 in 1972 dollar terms - while that of the low quality Burmese 42 percent brokens is forecast at $85-95 for metric ton f.o.b. Rangoon -equivalent to $73-81 in 1972 dollar terms (Table V). While these prices might seem on the low side, it should be recognized that the technological improvement brought about by the anticipated wider adoption of the high­yielding varieties will very likely lower production costs per unit of output and increase profitability.

- 14 -

Table V: INTERNATIONAL PRICES FOR RICE, 1960-1972 AND PROJECTIONS TO 1980

Actual 1960-62 1963-65 1966-68

1969 1970 1971 1972 (Jan.-June)

Projected 1900

Actual

(US$ per metric ton)

Thai 5% brokens

f.o.b. Bangkok

138.0 139.1 190.2 186.9 144.0 129.0 131.4

In 1972 dollars f1. 135-145 115-124

L1_ Provisional.

Burmese 42% brokens

f.oob• Rangoon

91.7 100.0 124.3 126.0 100.0

86.8 79.3 Ll

85-95 73-81

f1. Assumes a rate of inflation of 2 percent per year from 1972 to 198o.

30. Sensitivity of Trade and Price-Forecasts- Given the very small proportion of production which enters international trade, it is clear that deviations from the assumed production levels in some key countries could lead to substantial variations in the volume of trade and market prices.

31. The geographical area where uncertainty is greatest is, of course, Asia. In this region, where about 50 percent of the world trade is expected to take place, only one country (Republic of Korea) is projected to import more than 10 percent of its total rice requirement. For some of the pro­jected rice-deficit countries in Asia (Ceylon, Indonesia, Bangladesh and Viet Nam Republic) self-sufficiency in rice by 1980 is not beyond reach. On the assumption that Indonesia and Ceylon become self-sufficient by the end of the current decade, projected world rice trade would decrease by some 1 million tons, or 15 percent of the total. Should all four countries achieve self-sufficiency by 1980, world trade would contract by some 2 million tons (or 30 percent of the total) and market prices could go as much as 20 percent below those forecast in paragraph 29.

32. If, on the other hand, countries such as India and the Philippines, which are projected to maintain or achieve self-sufficiency, re-enter the market as importers, while the rice-deficit countries remain in the market, a steep increase in world prices could well materialize. MOreover, a

- 15 -

situation where exporting countries might not be able to supply the quan­tities required cannot be ruled out. Price fluctuations such as those experienced in the last five years, when prices rose by over 30 percent in one year and fell by the same amount two years later, could reappear in the 1970's under a combination of factors at variance with those upon which im­port requirements and export availabilities of the various Asian countries were projected. Furthermore, year-to-year fluctuations in production aris­ing from weather disturbances cannot be predicted; this factor alone can in the short term influence considerably the volume of rice entering world markets and have a magnified effect on prices.

33. However, any protracted imbalance in the export market would exert considerable pressure on domestic prices in those exporting countries where prices and returns to farmers are linked to the international market situa­tion and would promote changes in the national rice policies of many other countries; these induced adjustments would tend to bring the market close to an equilibrium situation.

34. The price forecasts presented in this paper are, therefore, con-ditional on a projected level of world trade in rice of about 6.5-7 million tons by 1980, an outcome that we consider most likely.

III. THE ROLE OF THE BANK GROUP

General Framework

35. Among the main objectives of the agricultural development programs of several rice-deficit countries, particularly those in Asia and Africa, self-sufficiency in rice and reduction of sharp crop variations have ranked highest. However in many countries, largely because of fast population growth, these goals are still a long way off. Reaching either goal requires expanded investment particularly, though not exclusively, in irrigation.

36. Policies of self-sufficiency should neither be sanctioned without regard to "economic cost11 nor be treated as blind, nationalistic objectives. Viewing the alternatives purely in these terms is tantamount to taking a narrow view indeed. Even if one makes generous assumptions about further yield gains in developed countries, it remains quite an unassailable fact that a large portion of the projected requirements of the LDCs in the 1980's will have to be met by expanding output in current rice-deficit countries.

37. Export availabilities in rice-surplus countries could not, by any reasonable expectation, be increased to anything like the 25 million tons needed by the deficit countries. The only al~ernative to expanding produc­tion in this last group of countries would be reduction of their per capita consumption; this in turn would not be feasible unless other foods were substituted.

- 16 -

38. Furthermore, as previously noted, the role of rice production in many developing countries is such that it would be grossly unrealistic to expect these countries to achieve the economic, as well as the social, progress they hunger for without big strides in their rice economies.

39. In view of the scarcity of suitable land for rice production, most of the additional production in the developing countries will have to be achieved through raising yields per hectare. This can be best ob­tained by increased use of the high-yielding varieties. However, these are going to require large capital investments in better irrigation facil­ities, farm implements and processing facilities as well as extension facilities to educate farmers. In the past, the public sectors of the rice producing countries have been able to provide most of the capital necessary to bring about increases in production, mainly through acreage expansion. In the future, however, since investment needs will be far in excess of those needed for expanding acreage, developing countries will need financial assistance on a much larger scale.

Past Bank Group Financing for E;Panding Rice Production

40. In the period 1965 to 1972, the Bank Group has financed a total of 27 projects related to the expansion of rice production in the LDCs (Annex Table 9). The majority of these projects are still in an early stage. By 1970 they had added only about 220,000 metric tons to produc­tion. By 1980 this figure should increase to about 2 million tons.

41. Financing has been concentrated in Asia, particularly in India (9 projects), Indonesia (4 projects) and Malaysia (2 projects); recently loans for rice projects have also been granted to several African countries. Thus so far Bank Group financing for rice has been almost exclusively confined to importing countries and those which are largely self-sufficient. !! About 97 percent of the incremental production will result from projects focusing on major and minor irrigations schemes (Table VI).

42. The heavy concentration on irrigation in this case has been dic-tated by the need to increase the productivity of rice lands and, at the same time, to raise farmers' incomes. As noted earlier, the effective use of the new high-yielding varieties depends on the availability of reliably irrigated land. In addition, irrigation permits double cropping on the same land.

43. Early IBRD rice projects, such as the MUda River in Malaysia, were primarily concentrated on the construction of dams and main distribu­tary canals, while the governments provided the complementary field ditches

1/ "Importing" or "exporting" refer to traditional rice deficit or surplus countries; "largely self-sufficient" group includes countries with mar­ginal export.

- 17 -

Table VI: PAST (1965-72) IBRD/IDA RICE PROJECTS PRODUCTION BY 1980, BY COUNTRY AND PURPOSE

(Thousand metric tons)

FUroose of Project Irrigatioil71 other

Importing countries 697 15 Largely self-sufficient

countries 1,188 52 Exporting countries 6

Total 1,891 67

Ll Projects in which expenditures for irrigation schemes accounted for most of the cost.

Total

712

1,240 6

1,958

and drains as well as land leveling. In recent years, however, irrigation projects have tended to be more comprehensive, covering all aspects of the development and use of water resources. They have been supplemented by additional provisions such as 11on-farm" investments and storage, marketing and processing facilities. Special attention has been given to small farms, particularly with regard to assisting them to realize the benefits of the new technologies being financed.

Planned Financing for Fiscal Years 1973 and 1974

44. During IT 1973 and 1974, the Bank Group plans tentatively to finance 30-35 projects, in some 28 countries, which involve the expansion of rice production. These projects have been provisionally estimated to produce a total of 1.8 million tons of rice by the year 1980 (Table VII). Tentatively, fifteen of them are planned in Asia, ten in Africa (eight in Western Africa)~ seven in latin America and three in the Near East.

45. Financing will again be concentrated in rice-importing or largely self-sufficient countries, though more projects than in the past are planned in exporting countries - notably Burma and Thailand. 'lhese two countries will need to expand production considerably if they are to satisfy growing domestic consumption and to maintain a satisfactory level of rice exports. As in the past, Bank projects will deal primarily with irrigation and related works. An increasing proportion, however, is likely to be within the wider framework of agricultural credit projects for on-farm land development.

- 18 -

Table VII: IBRD/IDA PLANNED (FY 1973 AND 1974) RICE PROJECTS PRODUCTION BY 1980, BY COUNTRY AND PURPOSE

(Thousand metric tans)

PurEQse of Project Irrigationll, other Total

Importing countries 692 108 800 Largely self-sufficient

countries 640 40 680 Exporting countries _l2Q ..19. 320

Total 1,622 178 1,800

Ll Projects in which expenditures for irrigation schemes will account for most of the cost.

Impact of Bank Group Projects on the World Rice Economy

46. The extent of the contribution of the Bank towards increasing rice production to meet the large additional requirements can be seen in Table VIII. The figures indicate that Bank rice projects under way since 1965 and planned for Fiscal Years 1973 and 1974 should provide about 3.5 million tons, or 8. 8 percent of LDCs total additional requirements up to 1980. The contribution would vary from a low of 3.6 percent for Latin America to a high of 14.2 percent for the Near East. For the total group of loan-recipient countries the percentage covered by Bank-generated output would amount to 9.6 percent. The residual requirement of developing countries as a whole would still be about 37 million tons •

47. The Bank's contribution is not negligible -yet it is necessary. We propose that (a) there is no alternative to investin~ in rice as a stim­ulus to overall growth in a number of countries; and (b) the price of not investing could be high indeed. As stated by the IRRI, inadequate invest­ment could keep the green revolution's new production potential unrealized and precipitate renewed food crises. Such crises would result '~ess from technological weaknesses in production than from neglected opportunities, now presented for the first time, for modernizing agriculture."J/

48. The Secretariat of the FAO Intergovernmental Group on Rice has been consulted on the probable impact of the Bank's rice projects on the world market. They ''broadly agree on the analysis" and "support the proposed Bank Group role in expanding rice production", as outlined in this paper.

1( International Rice Research Institute, Rice Research and Training in the 70's, Los Banos, 1969.

Developing countries of which:

Asia Near East Africa Latin .America

Recipients of IBRD loans of which:

Importing Largely Self-sufficient Focporting

- 19 -

Table VIII: CONTRIBUTION OF BANK RICE PROJECTS, PAST AND PLANNED, TO MEEI'ING ADDITIONAL REQUIREMENTS BY 198o

(Million tons)

(1) (2) (3) (4) (5) Additional Output from Z!RD Projects Residual

consumption b~ 1280 requirement requirements Past Pro)ects Planned Projects Total to meet

/1 (1965-72 (FY1973 and 1974) (2)+(3) COnBU"llption (1 )-(4)D.

40.2 1."( 1.8 3·5 36.7

34.8 1.6 1.5 3.0 31.8 1.2 0.1 0.1 1.1 1.7 0.1 0.2 0.3 1.4 2.5 0.1 0.1 2.4

.R:.Q 1.:1 1.8 3.5 33.5

11.7 0.7 0.8 1.5 10.2 20.7 1.0 0.7 1.7 19.0 4.6 0.3 0.3 4.3

Ll Increase in consumption between the base year 1970 and 1980.

(6) Percentage

of additional requirements met by IBRD

protecl4 (~)/ 1 ) __

(Percen-6 8.·8

8.6 14.2 13.6

3.6

9.6

12.7 8.4 7.1

/2 Incremental output between the base year 1970 and 19AO; excludes quantities which by 1970 were already being produced in Bank financed projects (see Annex Table 9).

D. Figures do not account for additional exports. Additional imports are negligible.

Lk Calculated from unrounded figures.

'

STATISTICAL ANNEX

Annex Table 1: RICE - PROJIJCTION OF PADDY BY REGIONS AND SELECTED PRODUCING COUNTRIES, 1949-1971

(Thousand metric tons,~ basis)

1949-53 1959-63 1964 1965 1966 1967 1968 1969 1970 1971

~t/1 101,271 141,517 155,565 141,818 143,970 158,728 166,874 172,899 177' 752 175,915

of which:

Burma 5,564 7,234 8,508 8,055 6,636 7,769 8,023 7,985 8,162 8,413 Cambodia 1,570 2,292 2,760 2,500 2,376 2,457 3,251 2,503 3, 814 2, 732 Ceylon 492 917 1,054 756 955 1,146 1,347 1,374 1,616 1,397 China (Taiwan) 1,824 2,489 2,943 3,076 3,117 3,162 '1,299 3,041 3,226 2,987 India 34,959 51,215 58,551 45,983 45,657 56,419 59,642 60,645 63,672 66,000 Indonesia 9,832 12,648 12,630 13,600 13,650 13,222 14,858 15,553 17,894 18,778 Japan 15,503 16,581 16,343 16,116 16,552 18,770 18,769 18,186 16,479 14,139 Korea Republic 2,514 4,441 5,344 4,731 5,448 5,oo8 4,442 5,688 5,476 5,553 Malaysia 662 948 924 1,090 1,234 1,194 1,433 1,597 1,678 l, 788 Pakistan 12,626 15,852 17' 780 17' 726 16,410 19 ,oo5 20,065 21,610 20,014 18,994 Philippines 2,905 3,833 3,992 4,073 4,094 4,561 4,445 5,233 5,343 5,149 Thailand 7,126 8,418 9,559 9,199 13,500 11,200 12,410 13,410 13,470 13,570 Vietnam, Republic 2,414 5,037 5,185 4,822 4,336 4,688 4,366 5,115 5, 715 5,800

China (Mainland) 60,800 79,940 85 ,ooo 89,000 88,000 92 ,ooo 91,000 95,000 102,000 104,000

Near East 1,893 3,003 3,572 3,416 3,502 4,305 4,555 4,564 4,448 4,486

of which:

U.A.R. 840 1,684 2,036 l, 789 1,678 2,278 2,591 2,561 2,605 2,628

~ 2,556 3,418 3,802 3, 705 4,224 4,486 4,409 4, 796 4, 775 5,009

of which:

Madagascar 883 1,187 1,313 1,240 1, 753 1,931 1,873 l, 858 1,865 1,901

North America 2,057 2, 710 3,319 3,460 3,856 4,054 4, 721 4,120 3, 799 3,824

United States 2,057 2, 710 3,319 3,46o 3,856 4,054 4, 721 4,120 3, 799 3,824

Latin America 4, 789 7,851 9,261 10,748 9,058 10,271 10,365 10,198 11,777 9,193

of which:

Brazil 3,025 5,117 6,345 7,580 5,802 6,792 6,652 6,394 7,553 5,130

Euro~ and U.S.S.R. 1,675 1,831 2,056 1,918 2,218 2,549 2,571 2,960 3,111 3,183

of which:

Italy 786 661 624 509 621 733 639 861 850 862 u.s.s.R. 205 260 471 583 712 895 1,063 1,107 1,280 1,400

~ 91 152 151 161 193 222 239 274 265 313

of which:

Australia 68 128 142 153 182 214 221 256 247 295

World Total: Paddy 175' 132 240,422 262,726 254,226 255,021 276,615 284,734 294,811 307' 927 305,923

MillecJL1 (113,835) (156,274) (170, 771) (165 ,247) (165, 764) (179,800) (185,077) (191,627) (200,153) (198,850)

a &eluding China (Mainland).

/2 Conversion factor paddy/milled: 65 percent.

Source: FAO, Study Group on Rice, Doc. CCP RI 70/6 and up-dating material.

Annex Table 2: RICE - PATTERN OF WORLD EXPORTS AND IMPORTS, 1959 TO 1971

(Thousand metric tans)

1959-63 Average 1965 1966 1967 1968 1969 1970 1971

Exports

World Total 6,364 7,562 7,153 6,892 6,248 6,515 7,271 7,525

Developed Countries 1,234 1,807 1,608 2,250 2,356 2,591 2,923 2,999

United States 957 1,549 1,352 1,848 1,898 1,918 1,740 1,475 Japan 328 618 911 EEC 172 113 85 185 255 174 377 393

Developing Countries 4,185 4,957 4,228 3,355 2,935 3,076 3,295 3,695

Far East 3,705 4,148 3,252 2,545 1,820 1,913 2,172 2, 730

Burma 1,685 1,348 1,128 540 352 541 640 812 Thailand 1,309 1,851 1,508 1,482 1,068 1,023 1,097 1,628 Vietnam, Rep. of 229 4

Near East 222 341 348 434 561 732 655 515

U.A.R. 220 330 347 430 558 730 655 515

Latin America 214 449 597 322 470 362 389 401

Africa 44 19 31 54 84 69 79 49

Central~ Planned Countries 945 798 1,317 1,287 957 848 1,053 831 China (Mainland) 872 740 1,215 1,149 886 726 936 730

Imports

World Total 6,149 7,627 6,996 6,798 6,429 6,356 7,134 7,316

Developed Countries 813 1,649 1,591 1,144 1,053 823 770 911

EEC 278 260 347 252 323 274 285 329 Japan 196 940 797 497 268 56 19 11

Developing Countries 4,699 5,342 4,768 4,984 4,832 4,947 5,797 5,848

Far East 3,472 3,687 3,306 3,683 3,408 3,462 4,120 4,017

India 451 783 787 453 446 487 206 240 Pakistan 257 60 139 149 36 30 216 330 Ceylon 477 642 488 376 338 264 545 340 Indonesia 1,006 193 306 347 708 604 956 509 Maley"sia 425 496 365 390 309 315 364 248 Philippines 90 569 108 290 437 Korea, Republic of 24 32 118 216 750 521 1,007 Vietnam, Rep. of 12 216 434 765 678 326 553 114/1

Near East 342 388 341 298 351 360 4$ 482

Latin AmElr'ica 338 496 350 363 397 406 354 412

Africa 502 710 693 579 604 651 781 846

Western Africa 285/2 386 423 342 385 388 487 534

Centra~ Planned Countries 637 636 637 670 544 586 567 557

USSR and Eastern Europe 605 502 586 645 511 581 542 554

/1 Unofficial estimate. 72 Average 1960-62.

Source: FAO - Study Group on Rice, Doc. CCP:RI 70/6 and Rice Trade Intelligence, June 16, 1972.

Annex Table 3 : RICE - EXPORTS BY ECONOMIC REGIONS, VOLUME, VALUE AND UNIT VALUE, 1963-65 AVERAGE AND 1966 TO 1971

Volume (1 1000 m. tons)

Developing Countries Developed Countries Centrally P.lanned

Countries

World Total

Value (Million US$)

Developing Countries Developed Countries Centrally Planned

Countries

World Total

Unit Value (US$/m.t.)

Developing Countries Developed Countries Centrally Planned

Countries

World Total

1963-65 Average

4,800 1,650

750

7,200

558 245

96

899

116.3 148.5

128.0

124.9

1966 1967 1968

4,228 3,355 2,935 1,608 2,250 2,356

1,317 1,287 957

7,153 6,892 6,21~8

542 539 496 264 383 428

150 149 138

956 1,071 1,062

128.2 160.7 169.0 164.2 170.2 181.7

113.9 115.8 14L.2

133·7 155.4 169.9

Source: FAO Connnodity Review and Outlook (various issues).

1969 1970

3,076 3,295 2,591 2,923

848 1,053

6,515 7,271

445 361 450 460

105 88

1,000 909

144.7 109.6 173.7 157.4

123.8 83.6

153.5 125.0

1971

3,695 2,999

831

7,525

361 449

63

873

97.7 149.7

75.8

116.0

.ann:ex 'fable 4: HIGE - INTERNATIONAL MARKET PRICES FOR IDNG-MEDIUM GRAIN, 1957-1972

(u.s. dollars per metric ton, f.o.b.)

1957

1958

1959

1960

1961

1962

1963

1964

1965

1966

1967

1968

1969

1970

1971

1972 ( Jan. -June )

100% whole, grade 2

n.a.

n.a.

n.a.

n.a.

143.8

156.0

150.9

146.1

142.3

168.1

216.0

211.5

193.9

151.7

137.8

137.2

Ll Contract with Ceylon. 72 Contract with India. a Provisional.

Private Trade Thailand

5% brokens 10% brokens

137.2 n.a.

142.3 n.a.

132.2 n.a.

124.7 119.9

136.5 132.5

152.8 150.4

143.3 139.6

137.7 134.0

136.3 132.7

163.2 159.6

205.8 199.5

201.6 193.6

186.9 170.9

144.0 134.3

129.0 101.6

131.4 91.2

Sources: FAO - Study Group on Rice, Doc. CCP: RI 70/6

Govt. -to-Govt. Contracts

Burmazi Thailand Ngasein 42% 25-35%

brokens brokens

91.0 103.5

98.3 ll8.3

92.8 92.8

89.9 89.5

92.6 91.8

92.6 92.4

95.3 98.7

100.9 102.3

103.6 10!~.3

103.6 123.6

120.4 128.0

lh8.8 11.a .2

126.0/2 128.3

100.0 102.6

86.8 82.7

79.3Ll 8o.oa

U.S. Department of Agriculture - Foreign Agricultural Service.

Annex Table 2: RICE - PROOOCTION, CONSUMPriON AND TRADE, l964-66 AVERAGE, l970 AND PRGJECTIOI£ FOR 1980

196~-66 Averase ma:2 1980 Pro~ections Coreum~ion CoiBumption

Balance Conaum~tion

ProdUction Net trade Tot.alZi r Caput Production Net trade Tot.alZl Per Caput Production TotalZi er Caput

£1. Food £1. Food £1. Food -~~-----

( •• 1,000 m. tons, milled basis •• ) ( •• Kg ••• ) ( •• 1,000 m. tons, milled basis •• ) ( •• Kg ••• ) ( •• 1,000 m. tons , milled basis .• ) ( •• Kg ••• )

~ 173,462 63 173,124 46.7 199,096 -88 197,166 48.2 257,370 -420 256,950 51.2

Developed CoWltries 14,723 -172 14,358 18.6 15,855 -2,146 13,412 16.6 15,113 -1,180 13,933 15.3

North AmErica 2,393 -1,354 1,033 3.3 2, 772 1,656 1,109 3-4 2,820 -1,540 1,280 3.6 u.s.A. 2,393 -1,397 990 3-4 2, 772 -1,706 1,059 3.5 2,820 -1,605 1,215 3. 7

Western Europe 900 402 1,298 3.2 1,137 140 1,375 3·3 1,231 340 1,571 3-5 EEC 441 208 636 2. 7 647 -75 657 2.8 680 70 750 2.9 Spain 264 -68 211 6.5 276 -48 228 6. 7 280 -20 260 6.9 United Kingdom 110 110 1.4 117 117 1.4 125 125 1.4

Others 11,430 780 12,027 81.9 11,946 -630 13,928 69.9 11,062 20 11,082 59.9 Australia 102 -69 40 3.2 160 -115 44 3·3 175 -123 52 3.J Japan 11,322 764 11,898 111.4 11,781 -648 10,776 96.2 10,880 10,880 84.8

DeveloEine; Countries 96,855 581 97,227 56.2 113,749 2,279 114,407 58.0 153,737 895 154,632 60.2

Africa 2,609 693 3,290 12.3 3,249 636 3,693 12.7 4, 715 '/30 5,445 13.6 Western Africa 1,236 450 1,676 15.5 1,426 469 1,904 15.4 2,335 460 2, 795 17.2

Ivory Coast 150 76 226 48.6 219 95 314 58.6 380 100 515 70.5 Liberia 109 44 153 122.6 96 so 146 111.3 130 so 180 112.8 Nigeria 252 l 253 4.0 263 242 3.6 530 530 5.5 Senegal 75 175 250 68.8 80 180 260 65.6 180 155 335 67 .l Sierra Leone 248 35 283 105.6 267 15 282 107.3 405 405 120.4

Madagascar 9]7 12 950 144.2 1,224 -40 1,166 154.0 1,540 -40 1,500 154.0

Latin America 6,489 136 6,592 23.7 7,146 127 7,159 22.4 9,595 l40 9, 735 23.2 Argentina 141 -39 101 4.0 238 -68 116 4.0 190 -60 130 4.1 Brazil 4,472 -159 4,313 46.4 4,522 -so 4,472 41.7 6,050 -50 6,000 42.4 Cuba 53 272 325 40.4 195 170 365 40.3 300 145 445 41.1 Guyana 174 -88 73 80.9 145 -60 78 82.6 220 -110 110 78.8 Mexico 199 10 202 4.1 290 246 4.2 365 3C5 4.6 Surinam 65 -17 47 97.6 82 -25 57 97 0 7 110 -40 70 99.6

Near East 2,544 -40 2,4i5 15.4 3,123 -182 2,828 l5 0 7 4,195 -175 4,020 16.9 U.A.R. 1,380 -401 891 27.7 l, 754 -635 1,007 27.2 2,180 -800 1,380 28.6 Asia arrl Far East 85,200 -273 84,852 83.5 100,218 1,633 100,526 87.4 135,215 115 135' 330 90.9 Bangladesh 10,19J& 196M 10,387 148.7 11,498i2_ 439/5/7 11,937 152.4 16, ':SO 550 16,550 153.0 Burma 5,256 -1,290 3,968 149.7 5,685 -680-- 4,842 103.2 7,100 .. 1,000 6,100 164.0 Ceylon 639 664 1,310 106.2 1,030 510 1,540 110.9 1,505 430 1,935 no. 7 China (Taiwan) 2,101 -175 1,926 132.0 2,277 -55 2,222 135.8 2,265 2,265 no. 7 India 35,580 734 36,306 62.8 42,021 177 42,197 64.5 58,000 58,000 69.9 In::ionesia 9,194 491 9, 786 87.9 11,454 725 12 '179 97.6 16,700 sao 17,200 105.0 Khmer Republic 1,654 -377 1,277 164.6 • 2,080 -170 1,586 174.8 2,435 -370 2,065 174.9 Korea, Republic of 3,637 -16 3,628 121.3 3, 780 540 4,320 126.5 4,485 575 5,060 114.9 Malaysia 676 384 1,060 108.5 1,004 244 1,247 109.9 1,620 so 1,670 110.4 Pakistan (West) 1,345& -294/4/6 1,051 19.1 2,206/5 -436£2i£ l, 770 28.9 2, 700 -200 2,500 30.0 Philippines 2, 707 324-- 3,031 86.0 3,621- 3,621 86.8 5,200 5,200 88.7 Thailand 7,313 -1,737 5,494 161.5 8,164 -1,060 6,476 164.3 10,150 -1,500 8,650 164.0 Vietnam, Republic of 2,964 185 3,149 163.1 3,171 650 3,636 168.5 4,260 390 4,650 171.9

Central!! Planned Countries 61,884 -346 61,539 51.0 69,492 -221 69,267 52.6 88,518 -135 88,383 56.5 China (Mainl<lnd) 56,950 -854 56,096 68.9 63,650 -800 62,846 69.6 80,400 -600 79,800 72.6 u.s.s.R. 383 288 671 2. 7 715 325 1,040 4.0 1,300 195 1,495 s.o

Note: Stock changes have been taken into account where possible for the 1964-66 and 1970 periods.

a Projecti ors base representing 11normal 11 or 11adjusted 11 trend values, i.e. modified for abnormal conditions which would make the base year Wlrepresentative.

£1. Exports (-) •

!1. Food and non-food uses.

& 1964/65-1966/67 average.

LZ. 1968/69-1970/71 average.

i£ Includes shiprrent to former East Pakistan.

fl. Includes shipment from Pakistan (West).

Source: 1964-66 and 1970, FAD -Agricultural Commodity Projections 1970-1980, Rome 1971. 1980 - FAO, IBRD Economic Reports, Agricultural Sector Surveys ani Economics Department estimates.

Annex Table 6: RICE - EXPOR!'S BY ECONOMIC REGIONS AND MAJOR COUNTRIES ACTUAL 1964-66 AND 1969-71 PROJECTIONS FOR 1980

(Thousand metric tons, milled equivalent)

Actual 1964-66 1969-71 Average Average

World 7,275 7,402

ll9velo:eed Countries 1,676 2,838 United States 1,397 1,711 Japan 619 EEC 136 315 Spain 70 54 Australia 70 127

Develo~ing Countries 4, 705 3,653 Far East 3,924 2,570 Burma 1,290 664 China (Taiwan) 175 30 Khmer Republic 377 119 Pakistan (West)/1 294 436 Thailand 1,737 1,249

Near East 405 634 U.A.R. 401 633

latin America 370 384 Brazil 159 98

Africa 6 66 Madagascar 51

Centrallt Planned Countries China Mainland)

894 911

N. EO rea, N. Vietnam 894 911

Projected 1980

7,060

2,035 1,605

285 20

125

b.,425 3,165 1,000

50 370 200

1,500

805 800

381 50

74 40

600

600

tJ.. Includes shipment to Bangladesh (former East Pakistan) for the 1964-66 and 1969-71 periods.

Source: Annex Tables 2 and 5. FAO, Commodities and Trade Division.

Annex Table 7: RICE - IMFQRTS BY ECONOMIC REGIONS AND MAJOR COUNTRIES, ACTUAL 1964-66 AND 1969-71, PROJECTIONS FOR 198o

(Thousand metric tons, milled equivalent)

Actual 1964-66 1969-71 Average Average

World 7,142

DeveloEed Countries 1,504 EEC 344 United Kingdom 110 Japan 764

DeveloEiEg Countries 5,090 Far East 3,455 Banglades~ 196 Ceylon 664 Hong Kong 344 India 734 Indonesia 491 Korea Republic Malaysia 384 Philippines 325 Singapore 166 Vietnam Republic 185

Near East 365

Iatin America 506 Cuba 272

Africa 699 Western Africa 450

Ivory Coast 76 Li'beria 44 Nigeria - 1 Senegal 175 Sierra Leone 35

Oceania 65

Centrally Planned Countries 548 USSR and Eastern EUrope 544

/1 Includes shipment from Pakistan (West).

Sourc-e: Annex Tables 2 and 5.

7,182

835 296 130

29

5,778 4,113

439 383 336 311 690 759 309 146 218 331

h31

391 186

759 470

87 98 4

151 h2

84

570 559

FAO, Commodities and Trade Division.

Pro.iected 1980

6,640

853 355 125

5,319 3,280

550 430 420

500 575 50

195 390

630

521 145

8o3 460 100

50

155

85

465 460

Annex Table 8: PER CAPITA FOOD CONSUMPI'ION OF RICE, WHEAT AND OTHER CEREALS IN DEVEIDPING COUNTRIES, 1964-66,

1970 AND PROJECTIONS FOR 1980

Rice Wheat Other

Cerealsl/ Total

Cereals

(------- Kilograms per capita ---------)

DeveloEing Countries

1964-1966 52.6 30.3 42.4 128.9 1970 58.0 33.4 41.8 133.2 1980 60.2 35-3 41.7 137.2

of which: Asia

1964-1966 83.5 22.9 29.1 135.5 1970 87.4 27.1 28.6 143.1 1980 90.9 29.9 27.8 148.6

/1 Maize, barley, oats, sorghum and millet.

Source: Annex 'lhble 5 and FAO- Agricultural Commodity Projections, 1970-1980, Rome 1971.

Annex Table ~: WORLD BANK GROUP PARTICIPATION IN FINANCING OF RICE PRODUCTION, 1965 TO 1972

Total Cost Total amount

loan/creditL!. Project Rice Out12ut Country/Project Name Date IBRD IDA Total 1970 1975 1980 At full

development

----------(Million US$)------------ ------(1,000 metric tons)-------

Cameroon Semry Rice (PA-107a) Dec. 29, 1971 7.4 3.7 3.7 5 10 11

~ Mahaveli-Ganga I (PA-29a) Dec. 30, 1969 50.0 14.5 14.5 29.0 58 80 80

Colombia Caqueta Land Col. (PA-60a) Jan. 29, 1971 21.6 8.1 8.1 19 14 14

India Kadana Irr. (PA-27a) Jan. 21, 1970 66.7 35.0 35.0 65 198 198 Guyarat Agr. Cr. (PA-34a) Apr. 22, 1970 67.0 35.0 35.0 10 10 10 Punjab Agr. Cr. (PA-48a) May 27, 1970 40.0 27.5 27.5 9 9 9 Andhra Pr. Agr. Cr. (PA-59a) Dec. 1, 1970 45.0 24.4 24.4 148 148 148 Haryana Agr. Cr. (PA-80a) May 13, 1971 44.5 25.0 25.0 29 29 29 Tami 1 Nadu Agr. Cr. (PA-8la) May 14, 1971 62.3 35.0 35.0 109 109 109 Pochampad Irr. (PA-90a) June 16, 1971 126.0 39.0 39.0 34 91 91 Mysore Agr. Cr. (PA-105a) Nov. 30, 1971 70.4 40.0 40.0 41 41 41 Maharashtra Agr. Cr. (PA-116a) Feb. 14, 1972 51.9 30.0 30.0 15 18 18

Indonesia Irrigation Reh. I (T0-658a) Aug. 14, 1968 8.8 5.0 5.0 30 39 39 39 Irrigation Reh. II (P A-37a) May 26, 1970 37.0 18.5 18.5 128 171 171 Irrigation Reh. III (PA-57a) Oct. 20, 1970 29.1 14.5 14.5 70 123 123 Irrigation Reh. IV (PA-113a) Feb. 8, 1972 23.4 12.5 12.5 23 142 146

Korea, ReJ2ublic of Pyongtaek Irr. (PA-6a) March 3, 1969 89.9 45.0 45.0 60 81 81 Yong San Gang Irr. (PA-109a) Dec. 21, 1971 85.2 33.0 15.0 48.0 30 37

Malagasy, Re12ublic Lake Alaotra Irr. (PA-40a) July 10, 1970 8.2 5.0 5.0 10 17 17

Malaysia Muda River Irr. (T0-482a) Oct. 14, 1965 83.1 45.0 45.0 190 208 220 323 Kemubu Irr. (T0-578a) March 31, 1967 18.5 10.0 10.0 30 51 60

Malawi Karonga Rural Dev. (PA-106a) Jan. 6, 1972 7.8 6.6 6.6 5 6 6

Mali Mopti Rice (PA-107a) Nov. 9, 1971 9.4 6.9 6.9 8 22 24

PhiliJ2J2ines Upper Pampanga Irr. (PA-2a) July 30, 1969 67.5 34.0 34.0 114 285 285

Senegal Casamance Rice (PA-77a) April 19, 1971 4.9 3.7 3.7 6 15 16

TOTAL ABOVE 1,125.6 189.6 396.8 586.4 220 1,240 1,960 2,090

Ll Total amount includffiexpenditure for production of other crops apart from rice. The portion relating to rice could not be identified in most cases.