Peak Everything: Learn about Peak Rice

This post is part of a series in which we look at why those basic things that we take for granted--such as water, food, and fuel--are getting expensive and scarce, all at once.

They are rationing rice in Costco and Wal-Mart; People have started panic buying and hoarding. In Manila, they post armed guards around it. The price of rice has trebled, and the World Bank says 33 countries are facing civil unrest. What is going on?

Blame rats. First of all, most of the rice in America is sold to Asians for whom it is a staple; it really doesn't take much of a panic to run out of Basmati rice over here. Most rice is eaten in the country where it is grown, and only 6 percent of the rice crop is traded around the world. In some countries, as much as 17 percent of the crop is eaten by rats; so good secure rice storage might be the first place to start.

Blame ethanol. Its diversion of grain from food to cars has caused a dramatic spike in the price of grains, and back in Asia and Africa, people are switching back to rice. When the governments of India and Vietnam saw the prices of grain skyrocket, they put in export restrictions to protect the local rice supply, which made the international market go crazy and led to panic buying and hoarding.

Blame Palm Oil. We blame palm oil for everything, but here again, the increase in demand for biofuels has encouraged the development of plantations instead of rice paddies.

Blame Meat. As people's incomes rise, they eat more meat, which takes a lot more land to grow a given amount of calories than it does for grain or rice.

Blame Urbanization. In China, rice paddies are paved over for cities and factories. It is like a set of dominoes. Peak Oil led to Peak Corn, which appears to be causing Peak Rice. Fortunately, much of the spot shortages appear to be caused by political action, such as export controls, and through waste; usually high prices encourage people to be more careful. Keep it away from the rats and there is enough for everyone.

Sources: Business Week, Times Online

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