Some comments and strange ideas about rice are circulating the Nation blog space, so I'm doing some research. There's a lot of interesting things that can be said about the history of rice and it's connection with Thailand. I'm posting a list of links here as food for thought.
According to UNCTAD, Thailand produces only 4.4% of world's production of rice, but last year we exported a third of world rice exports. It was a bonus year because of the global food crisis earlier in the year, and Thailand didn't have production problems like other countries. The high prices is quite likely to come down in the near future once production picks up normally in that bigger 96% of world production.
The structure for exporting Thai rice was built over several decades with a strong government hand. We were lucky that it turned out well. There were once dark times of stock piling, corruption and price distortions and very little of the benefit from exports going to the farmers. With some remarkable people, determined to be fair and inclusive, it got worked out. I remember a very impressionable visit to Kamnan Song's central market for rice at Nakornsawan in the late 80s. Truck loads of rice arriving during the wee hours of the morning before sunrise, and farmers who drove those trucks in themselves auctioning their rice for the best price. The Nation could do service in writing a story about how that market has evolved if I may say so.
Thailand does have a reserve of rice, controlled by the Ministry of Commerce. It is used for stablilizing the domestic price of rice when prices go too high, also used for foreign aid to poor countries. I think it would be a grave mistake to morph the value of rice (a food crop) into something else, especially, something so closely linked to just monetary value, as proposed by Khun Tanong in his blog "When the UK prints money" . Look at what happened to the price of corn when the US decided to use it for biofuel. People down in Mexico were suffering because their staple food was corn (imported from US). (Thais can count their blessing that we never took the route of Mexico and completely believed WTO's and US free trade agenda and destroyed their agriculture sector to build a "industrial sector" for export in order to import food!)
Thailand also has an Agricultural Futures Exchange of Thailand where rice futures can be traded. This and technology have helped new players enter the market recently, all hopefully playing a role in increasing market efficiency and maybe production quality.
However, the idea of a rice bond, which "wch" posted as comment on an earlier post of mine had me intrigued. After some research on the net, I discovered that it is quite plausible. The Bank of Canada and some other academic institutions have funded researches about commodity-backed bonds as a way to help developing countries ease their debt problems. My protest against that would be that a rice bond is first of all a financial instrument and doesn't really help the farmer, it would only be useful as a hedge for government debt, which in my view the government should really be going easy on creating more public debt for future generations.
"Le Monde Diplomatique" in its March 2009, English editions printed "Fragrant Thai Rice" by Xavier Monthéard. He opens his article with a bit of drama, but I like how the article was started with a quote, ‘We need to find a balance between profit and holding the country back’.
Another noteworthy site is the Thai Rice Foundation (thairice.org), its list of webpages related to rice.