Sign of the times

Seems like it was just last year that Southeast Asian nations were slapping export controls on rice in order to preserve more of the rapidly appreciating commodity for their own citizenry.  Now Thailand's begging its neighbors for help dealing with the plummeting price:

Agricultural leaders in Thailand, the world's biggest rice exporter, are asking Vietnamese counterparts to help them stabilize the tumbling price of rice -- the latest indication of how dramatically circumstances have changed since food riots gripped the developing world a few months ago.

Industry experts aren't expecting any major price-fixing accords between the two countries, which together control roughly 45% of global rice exports. A Thai participant in the meetings, held with industry representatives in Vietnam this week, stressed the two countries are only speaking in general terms about how to keep prices from falling further from their current levels.

But he said the two sides hoped to announce some form of increased coordination at an upcoming summit of heads of state from the Association of Southeast Asian Nations later this month in Thailand. One idea already on the table is the creation of a regional rice reserve that could be used to prevent food shortages and absorb excess stocks during periods of oversupply, analysts say.

"We have to stabilize the world price," said the participant, Chookiat Ophaswongse, president of the Thai Rice Exporters Association. If not, "it's going to hurt the overall market."

Good luck.  Attempts to fix the prices of agricultural commodities at artificially high levels were one of FDR's ideas that probably prolonged the Great Depression.  In deflationary times, the last thing you want to do is keep the staple food commodity of your nation's poor at artificially high levels, even if that does help the farmers.

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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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