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Tuesday, May 27, 2008

Rice Production In Kerala

In an attempt to ensure it can feed India's 600 million poor, the government banned rice exports on April 1, contributing to a shortage on world markets that drove the price of the grain to a record last month and sparked food riots from Haiti to Egypt. The curb caused local prices to lag behind the international increase, encouraging some Indian farmers to switch to more lucrative crops thus further reducing supply.

Kerala offers us one example of what has been happening in this context, since the area growing rice in Kerala has fallen to 276,000 hectares (682,000 acres) in 2006 from 801,700 hectares in 1980, according to the state's Planning Board. Production almost halved to 630,000 tons from 1.27 million during the same period.

The price of rough rice has almost tripled in the past two years, reaching a record $25.07 a 100 pounds on April 24 on the Chicago Board of Trade. It closed at $20.35 a 100 pounds on May 23. In India, rice sells for 18 rupees a kilogram (19 cents a pound) at local markets, and government-run stores distribute it to the poor for a sixth of that price.

Some farmers in Keral have switched to producing rubber since rubber prices rose to a record 123 rupees a kilo in Kerala after crude oil prices more than doubled in a year, according to the government's Rubber Board. The state accounts for more than 90 percent of the natural rubber produced in India, the world's fourth-biggest grower.

The tropical climate in Kerala is ideal for rubber, helping growers achieve an average yield of 1,879 kilograms a hectare, the highest in the world. The area producing rubber has almost doubled to 494,400 hectares during the past 25 years, according to the Planning Board. Still, government curbs on converting paddy land to cash crops do mean that farmers are holding back.

Since 2002, the local government has required paddy farmers to obtain permission to put their farmland to other uses, though construction of houses is permitted in small plots.

The order restricting land use seems not to have been very effective since it isn't widely enforced according to K. Jayakumar, Kerala's agriculture production commissioner. The state plans to introduce rules that will prevent the use of wetland for purposes other than rice.

Labour Shortage?

The prospect of spending six months of the year knee-deep in brown paddy water for scant reward is steadily encouraging rice farmers to abandon their land. About 2.5 million people, or a 10th of the state's population, now work in the Middle East, where they help build apartments, hotels and offices. The exodus has led to a tripling of wages for day laborers who stayed behind, and fueled a building boom on drained paddy fields as engineers, surveyors and construction workers send money back.

Maybe it is worth remembering here that fertility in Kerala has been below replacement level since the 1990s, and it is not clear how or why a state which isn't reproducing itself is able to export labour.

At least 60 percent of the land traditionally used for rice in the Palakkad district, about 110 kilometers northeast of Kochi, Kerala's largest city, has been lost to other crops and to the construction of homes, villas and shopping malls.

The share of agricultural land devoted to food crops, including rice, fell to 12.5 percent in the year ended March 31, 2006, from 37.5 percent in 1981.

A detailed account of how a very similar pathology is leading to very substantial problems in Vietnam can be found in this lengthy post here.


Anonymous said...

I think it is correct to say that Kerala has lost a substantial rice fields to other crops and construction business. Hailing from Palakkad, I have fond memories visiting my grand parents in their village and the bus journey through the lush green paddy fields on either side.Sadly, so much of it is lost now. Nonprofitability of rice, difficult labour laws, militant trade unionism, climate change with lesser rainfall, lack of the various governments forsightedness to have a sensible long term outlook etc have contributed to it. In addition, neorich from Gulf added to the construction boom. Newer generation probably wants to go into more white coller jobs as well, so even if you need workforce you will have to import them from TN or Bihar as Kerala is doing for its rice consumption now.

The writer asks how Kerala manages to export so many expatriates to work outside when the reproduction rate is not compensating. Kerala has one of the highest population density states in India (850/sq.km) whereas average Indian figure is 320/sq.km. Kerala can afford to send around 500people from each sq.km to reach national average population density.

Edward Hugh said...

Hello Anonymous,

And thanks for your comment which was interesting.

"Newer generation probably wants to go into more white coller jobs as well, so even if you need workforce you will have to import them from TN or Bihar as Kerala is doing for its rice consumption now:"

Yep, well this is, it seems to me, just fine. I am in Spain, and this is exactly what has happened here in recent years as the younger Spanish population moves up the education and value chains and workers have come from outside Spain for agriculture.

"The writer asks how Kerala manages to export so many expatriates to work outside when the reproduction rate is not compensating."

Yep. Look. The problem is not population density. It is the structure of the population pyramid, and the macroeconomic consequences of life cycle changes in behaviour. This is now becoming a very live issue here in some countries in Europe and in Japan, as populations age rapidly and the future of pensions becomes uncertain. The argument is too complex to go into here. I have a lot of material on the Demography Matters blog.

The tragedy is, as far as I can see that we are now having the debate about this in the economically developed countries where it is almost too late to do that much, while in the emerging economies people are unaware of the potential problem while there is still time to act.

You can plug some holes with migrants, but basically it would be very, very interesting to develop policies to start nudging fertility steadily back up towards replacement level. Only this way will you get long term stability in a region.