The rice industry

NEWS in the rice industry remains good, with the Latin American market, in particular Cuba and Mexico, demonstrating strong, growing demand.

A casual look at the rice industry globally, shows that China and India dominate, as is expected, given that their huge populations probably prompted intensive local production to feed their many masses. Rice, after all, is a staple for both the rich and the poor.
What a further look at the international market shows, however, is that India and China are by no means the only large-scale producers of the grain; which tells us that what they produce is not enough to thoroughly dominate the international market.
As a result,Guyanese need not fear such behemoths where rice is concerned, as it seems there will consistently be enough market share for at least some of our rice. We will certainly consume some of it domestically, but there will also be a need to export some of our rice.

But let’s pause for a moment to ask: Where have we heard that an industry will always have some market share, so we need not emphasise growth or reform? Where have we, even further, heard that just because we aren’t the lowest-cost producer doesn’t mean we won’t eventually come under threat? Obviously, we haven’t learnt anything from the struggles of the sugar industry. We need to do better this time around.

Additionally, it’s important to broaden our understanding of the true dynamics facing industries such as rice and sugar. The critical point is that agricultural industries typically produce commodity goods, which are largely just the same as those produced in other countries. As a result, price is the only real way to differentiate between goods; and the one with the lowest price will typically win market share.

Any agricultural industry that produces above that bottom-market price is really only able to survive so long as competitors aren’t able to produce enough to supply the entire market. This leaves a gap that higher-priced local produce can fill. But when this changes, and international productive capacity increases, as was the case with beet sugar coming out of Europe, this squeezes the higher-priced goods into a smaller and smaller market share, until it eventually leaves the market.

How then to ensure this doesn’t eventually happen to rice? While it is, of course, important to liaise with other rice-producing nations to learn from their own research, we can learn a great deal from our own past. A focus on crops, where we can reasonably be expected to lower prices near the market leaders through research and development, is critical rather than a broad brush which does not facilitate such competitiveness.

We don’t have to win every competition in the free market; we just need to win the ones that are most important to us. And that’s why a focus on rice makes a great deal of sense as a driver of continuous economic growth locally. We can pour resources into rice in a way difficult to match in conditions less friendly to the crop’s growth, both because of our vast natural agricultural advantages and expected oil revenues.

We may not now be anywhere near to the world’s top 10 producers, but unlike many countries, we can gradually get there.

Rice continues to do well, and we look forward to the prosperity of our hard-working rice farmers. Importantly, however, there is so much more that can be accomplished in the process safeguarding the long-term future of the industry.

And so we should look at the strategic advantages of rice, bearing in mind that there may be other analogous opportunities we need to seize. If developed well, the rice industry can serve as a fine example of a Guyana reaching its fullest potential.


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