Tyler Cowen writes:
At first glance, this seems understandable, because a country may not wish to send valuable foodstuffs abroad in a time of need. Nonetheless, the longer-run incentives are counterproductive.
Export restrictions send a message to farmers that their crops are least profitable precisely when they are most needed. There is little incentive to plant, harvest or store enough rice — or any other crop, for that matter — as a hedge against bad times. [Freer Trade Could Fill the World’s Rice Bowl. Tyler Cowen. New York Times. April 27 2008]
Also from Indonesia:
We know that:
a. The world rice prices hit the $1,000-a-tonne level for the first time
b. Indonesia’s rice production is estimated to be about 2m tonnes higher than consumption this year thanks to improving yields and an increase in the harvested area.What can you infer?
Yes, sell the surplus and reap the windfall profit. I heard you said you always want to help rice farmers. [High Price Rice Quiz. café salemba. April 23 2008]
Despite having a surplus, Indonesia is restricting rice export with hope to slow down the march of local rice prices to achieve parity with prices in the international market.[1]
And, ehem, hey you protectionist Malaysians, how do you feel to be on the other end of protectionist policy now?
[1] — Indonesia has imposed controls over rice exports as Asian states battle food supply concerns which have been caused by soaring global prices. [Indonesia curbs its rice exports. BBC News. April 15 2008]
