Good rice harvest to head off Madagascar unrest

ANTANANARIVO – Madagascar's rice output has increased despite flood damage to fields this year, and falling prices are reducing the risk of more unrest over living costs, the agriculture minister said on Wednesday.

The huge Indian Ocean island off southeast Africa suffered soaring inflation for basic commodities in 2004, with the price of rice, the main staple, nearly quadrupling and triggering protests in the capital Antananarivo.

Analysts blamed the price increases on a combination of cyclone damage to crops, an increase in petrol prices that pushed up transport costs and a halving in the value of the currency against the dollar during the course of last year.

'There is no risk of a shortage of rice production this year,' Agriculture Minister Harison Randriarimanana told Reuters.

'We expect production to increase by at least 13 percent...from last year's 3.0 million tons to 3.4 million tons. That's in spite of the flooding earlier in the year.'

In March flooding in the productive eastern Alaotra region ruined thousands of hectares of rice, sparking fears of a shortage on the island of about 17 million people, where most households depend on growing or selling rice to survive.

Randriarimanana said an increase in the rice area and government programmes to improve farming techniques had helped plug the gap, yielding two good harvests this year.
He said rice stocks would still need to be monitored into the next cyclone season, which starts in November, in case of storm damage to the next crop.

He said he expected prices to fall steadily as the rice hit the market this year.

'The price will fall but not too much because there is also (general) inflation. I think it will stabilise at 700-800 ariary (37-42 U.S. cents per kilo).'

In 2004 rice prices shot up to 1,500 ariary from 400. They have since fallen to 1,000 ariary.

PROTESTS

Madagascar consumes almost 2.5 million tons of rice a year, making it one of the world's biggest per capita consumers. Rice prices are an indicator of political risk on the island.

In June hungry mothers from the capital's slums, army reservists and students took to the streets in a series of protests that rocked Madagascar.

In response, the government appealed to rice growing countries for hundreds of thousands of tons of aid in an effort to contain prices.

The U.N. World Food Programme said its own assessment agreed with the government but it warned of regional shortages and price volatility because of speculators.

'There will be enough rice for the country but not in all regions,' said WFP communication's officer Stefania Trassari. 'According to our early warning system, 105,000 people will be food insecure this year in the south and southeast.'

Trassari said people in the semi-arid southern regions would need 2,300 tons of food aid but questions of distribution or where the food would come from had not yet been determined.

She said even if more rice were produced, speculation by distributors might create artificial shortages.

'The problem is not just the amount of rice, it is the circulation of rice.

By Tim CocksREUTERS 9:30 a.m. May 11, 2005

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