Social Sciences, asked by honeyrana059, 8 months ago

Reason of Price Rice. Explain in
detail​

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Answered by GOODBOYFF
2

Answer:

A rapid increase in food grain prices in the

first half of 2008 has diverted global attention to

the food crisis. Rice, the staple food of millions

of Asia’s poor, is not only an economic good

but also a political commodity. The price of

rice escalated in May due to a number of short-

and long-term factors, with the export price

exceeding USD 1000 per ton.

Keeping the price of rice low, thus making

the commodity affordable to the poor, is critically

important in reducing poverty. Poor households

spend a substantial portion of their incomes on

rice; an increase in rice price is equivalent to a

reduction in their real incomes.

This paper analyzes the factors that have

contributed to the rapid rise in rice price and

assesses the impact of price upsurge on poverty.

A scenario analysis on rice prices was conducted

through projection of long-term demand and

supply of rice. The final section of the paper

includes short- and long-term solutions to the

price crisis.

EVOLUTION OF RICE PRICE

It is now well recognized that rapid

production growth in the wake of the Green

Revolution led to a long-term decline in rice

prices. In 1970-1990, rice production in Asia

grew at the rate of 2.71 percent per annum (pa),

with growth in yield being the major source of

this production growth. Except for the price

spike in 1972-1974 caused by production

shortfall in several countries and the oil crisis,

rice prices sustained a decrease over time until

2001 (Figure 1). During this period, the world

rice market went through a major structural

change that helped maintain a low and stable

rice price during the 1990s (Dawe 2002). This

was conducive to the expansion of the rice trade

as importing countries could obtain the required

quantities of rice cheaply from the world market.

The low and stable rice price also contributed

to poverty reduction—directly by raising the

income of rice farmers, and indirectly by raising

the real income of poor consumers.

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