RICE FACTS

Saving labor
by DAVID DAWE
Economist

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100 90 80 70 60 50 40 such as fertilizer and 30 pesticide, the potential savings are com20 mensurately great. 10 Among seven 0 of Asias major rice Red River Delta, West Java, Tamil Nadu, Mekong Delta, Central Luzon, Zhejiang, Central Plain, Vietnam Indonesia India Vietnam Philippines China Thailand bowls, Thailands Labor cost as a percentage of total rice production cost (excluding land Central Plain is the rent) for seven rice bowls in Asia. only one where labor Source of raw data: Moya PF, Dawe D, Pabale D, Tiongco M, Chien NV, Devarajan S, Djatiharti A, Lai NX, Niyomvit L, Ping HX, Redondo G, Wardana cost is less than half P. 2004. The economics of intensively irrigated rice in Asia. In: Dobermann of total non-land A, Witt C, Dawe D (editors). Increasing the productivity of intensive rice systems through site-specic nutrient management. Eneld, N.H., and production cost Los Baos, Philippines: Science Publishers, Inc., and International Rice (albeit still the most Research Institute. p 29-58. important item). Not coincidentally, the Central Plain has the lowest market prices brought about by reproduction cost not from high duced production cost. Furthermore, yields but from reductions in labor most of these laborers have diversiinput achieved during the past 20 ed sources of income off rice farms. years. Broadcast seeding has replaced Research is limited on how much transplanting, and harvesting and agricultural wages adjust to changes threshing have been mechanized with in rice prices, but the best-known combines. studies on this question (both done in In China, transplanting is disapBangladesh) suggest that lower rice pearing in many areas, and despite prices help more than lower wages small parcel sizes, combines are being hurt1 or that lower rice prices do not rapidly adopted, as they are in Punjab lead to lower wages,2 presumably beand Malaysia. While mechanization cause demand is substantial for labor is not cost-effective now in areas outside of the rice sector. with the lowest farm wages, reducing Growth in the industrial and labor input is a major challenge facing service sectors is nevertheless critical Asian countries that wish to become to ensuring that agricultural laborers more competitive in rice production. can nd new and perhaps better To be sure, saving labor in rice jobs to replace those lost in rice culcultivation has a price because many tivation. This is something that both poor laborers receive a substantial Thailand and China have successfully portion of their income from availachieved. able work in rice elds, and lower rice 1Ravallion M. 1990. Rural welfare effects of food price changprices may force wages down. In the es under induced wage responses: Theory and evidence for short run, laborers will have difculty Bangladesh. Oxford Econ. Papers 42:574-585. 2Rashid S. 2002. Dynamics of agricultural wage and rice nding new jobs. However, because price in Bangladesh: A re-examination. Markets and Structhese laborers are rice consumers, tural Studies Division Discussion Paper No. 44. Washington, D.C.: International Food Policy Research Institute. 40 p. they will also benet from the lower

Boosting labor productivity on rice farms raises living standards, even for landless workers

iving standards can rise only as workers become steadily more productive. For rice farming, improving productivity means adopting such labor-saving innovations as broadcast seeding and mechanization, especially in the absence of breakthroughs that lead to higher rice yields. Some would prefer to keep rice farming labor-intensive to preserve rural jobs, no matter how dead-end. The problem is that stagnant farmlabor productivity props up the retail price of rice and so undermines an essential foundation of livingstandard improvement: household food security, or the ability of families to afford enough food to support a healthy, active life for all. Most of the food-insecure in South and Southeast Asia are landless rural laborers, farmers who grow crops other than rice, and urban slum-dwellers in other words, poor people who buy their daily rice, not grow it on their own land. Thus, an important component of household food security is lower retail rice prices. These are sustainable only when the cost of production per ton drops. By far the main costs in rice farming are land and labor, so the key to lower production cost is using less land or labor or both. Higher yield with little additional input is one way to lower production cost because it reduces the land needed to grow a ton of grain. The other option is to reduce the labor input, which occupies by far the largest share of non-land production cost across Asia (see gure above). As labors share of production cost exceeds that of other inputs,

Rice Today October-December 2004

PETER FREDENBURG

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