C.Peter Timmer, one of the world’s pre-eminent agricultural economists and a leading expert on food policy, is a non-resident fellow at the Centre for Global Development. Now retired from teaching, he is the Thomas D.Cabot Professor of Development Studies, emeritus, at Harvard University.
Together with UK professor Michael Lipton, he has won the 2012 Leontief Award, a prize designed to recognise outstanding contributions to economic theory that address contemporary realities and support just and sustainable societies.
Food prices have been on a sharp rise in Viet Nam. What would you suggest the country should do to improve the situation?
The rise has been real in the sense that consumers had to pay the higher prices.
My impression is that prices of rice in Viet Nam are gradually being aligned with prices in the world market.
The recent Thai policies complicate our expectations about what should happen to rice prices globally, with Thailand pushing prices up by restricting exports, but the re-entry of India into the world market suggests that prices should drop.
There is no way Vietnamese prices for rice in domestic markets will be higher than prices in world markets, except for very short periods.
Is there a chance of a possible food crisis that the Vietnamese poor will have to face?
It’s very clear that if high prices trickle down to farmers and farmers are producing a surplus for the market, that should benefit them.
But the big question is what happens to poor urban consumers and rice-deficient rural households if rice prices stay high. Those people are hurt by the high rice prices. Most of the people we call “very poor” – bottom 10 or 15 per cent of earners – are very vulnerable to high prices.
If you’re just asking if Viet Nam will be better off or worse off…on average, Viet Nam is better off. But clearly there are important groups of people who are much worse off.
I do not see this as a “crisis” though, which suggests it is happening suddenly. Instead, this is a problem of chronic poverty and we need to find sustainable sources of higher incomes for these rural households.
Why does it seem that farmers have not benefited much from the rise in food prices?
When world prices go up, farmers actually do not see very much of the price increase, even though consumers see it very quickly.
Where is the money going? It is going into the marketing system which turns out to be inefficient and non-competitive.
That has to be an important area that governors think about – new policies to make food marketing systems more efficient so that when consumers are paying high prices, farmers will get high prices too.
We do not have an effective connection between farmers and consumers right now in Viet Nam. That’s a problem we need to fix.
This is a problem all over Asia. There are examples in China, Malaysia and Thailand that Viet Nam can examine and learn from, so that we don’t have to make all the mistakes ourselves.
Viet Nam has seen more and more shoppers bypass traditional markets to buy food at supermarkets as the result of inflation. Is the rise of modern supply chains a good sign for the country?
In many ways, the emergence of supermarkets in Viet Nam can be seen as a positive trend, as their supply chains tend to be more efficient, safer and quality controlled.
The problem I see is that small farmers have a difficult time meeting the quality and safety standards and so the transaction costs of buying from individual small farmers are quite high.
Some kind of collective institution may be needed to help small farmers remain viable suppliers to supermarkets.
What should the Government do to overcome the challenge of climate change, with regard to agriculture?
This is a very big and complicated topic and no short answer is possible.
I’m sure the country is already seeing the early stages of climate change – more typhoons, more draughts and greater variability.
There are several basic things you should do to adapt your agriculture to increase its ability to survive heavier rains, more floods, more droughts, colder winters and hotter summers.
One, you perform the basic agricultural genetic research to figure out ways to make rice plants more resilient. For instance, we’ve just seen how successful the new rice variety in Eastern India is in flood conditions. It survives under water for 10 days. Hopefully 10 or 15 years from now, the rice crops will be quite resilient to the variability in weather.
The second thing you should is to make sure you have the right kinds of infrastructure in place to improve farmers’ resilience. Seriously invest in water control – not just irrigation and drainage but also flood prevention and relief. Think about what the needs will be when there are more severe floods and droughts.
Thirdly, you should think about cropping patterns that are more diversified. For instance, livestock are more resilient to flooding and climate change than crops.
In terms of your domestic food security, I think the big question for rice production in Viet Nam is what are you going to do with the so-called “micro farms” (farm households that only have 0.3-0.5ha). They are growing rice for their own food subsistence, so they don’t have the time and the land to grow higher value crops, vegetables or livestock. We need these small farms to move away from rice and expand their production in order to increase incomes.
I would hope that part of the long-term strategy is figuring out the ways to have most of rice production done on farms of between 5 and 10ha. That will take 10 to 20 years but we need to think about how the whole land system is going to change over the next generation.
I am actually pretty optimistic that Viet Nam has the capacity to be quite resilient to the changes. We should not forget that Viet Nam has always faced problems similar to those that will be presented by climate change, so the challenges are probably manageable.
It is clear that the Government in general, and the Ministry of Agriculture and Rural Development in particular, are well aware of the problems facing Viet Nam. We have to keep pushing hard on the path that you have already started down.
Rice is far more common in developing countries than developed ones. Is that just a coincidence?
That’s a very interesting question. The “deep” answer is probably climate-related. It was easier to develop modern industrial societies in moderate climates, where rice does not grow well.
A decrease in rice consumption has been reported across the globe. How would you comment on that?
The whole world’s rice consumption started to decrease five or six years ago. However, it’s still increasing between 3 and 4 per cent per year in Africa, which will possibly become the world’s largest consumer of rice in 30 years. Rice consumption is also increasing a bit in Latin America.
But absolute rice consumption is already falling in Asia, where 80 per cent of rice in the world is now used up. Even Bangladesh is absolutely declining.
In Viet Nam, consumption has also started to fall in the past two years. When people’s incomes go up, they eat less rice. So rice consumption has started to go down. In that sense, it’s good news because you don’t have to worry about having to produce a lot of rice.
Do you eat rice yourself?
Yes, I eat a lot of rice, probably twice day.
In my house in California, I always have five different kinds of rice. We have organic jasmine rice, arborio rice, long-grain, medium-grain, short-grain and sushi style rice.
Rice has a high glycemic index and is pretty refined. The whole point of rice is that we use it to carry the vegetables, the salt and all flavours. — VNS